The airline industry is under constant pressure to increase revenue. Today, if airlines truly want to achieve total revenue optimization (TRO) and get a truly comprehensive, 360-degree view of all revenue streams, they must look beyond revenue management alone.
Pricing is one area of focus that offers vast potential to airlines looking to grow revenue and stand out in today’s crowded marketplace. Ultimately, if airlines engage in their pricing strategies to help them tell their story, they can increase customer satisfaction, discover unique points of differentiation and achieve total revenue optimization.
Consider the pricing problem airlines face today: If an airline wants to serve a new destination, cater to a special event, or grow an existing market, where does it start? How does it determine fares for the various trip options across different markets, travel dates, products and points of sale? Equally important, how will it constantly monitor existing fares and determine how they are performing?
To address these questions, many airlines control their prices by monitoring the competition and conducting ad hoc analyses. They also use manual processes, which are prone to human error and don’t always provide the necessary data to make effective pricing decisions. Moreover, manual processes don’t always take customer segmentation and their willingness to pay into consideration.
The only way to improve an airline’s gross margins is to make pricing management a strategic priority. Airlines need end-to-end pricing decision support capabilities to stay ahead of their top competitors. An innovative, unique set of high-end pricing capabilities that will prove to be an industry game changer is on the horizon.
Click here to learn more about how airlines should approach pricing optimization.