Revenue Management in the passenger airline industry is widely recognized as a critical component of business strategy in order to enhance revenue. It is estimated that the revenue potential to be gained using Revenue Management can vary from 4 to 11%. Revenue management principles need to constantly evolve in order to keep up with the dynamic nature of the airline industry. Some of the challenges facing the industry today from a revenue management perspective are:
Simplified Fares with no restrictions
The traditional revenue management models used for decades are no longer applicable and in fact can adversely impact revenue in markets with simplified fares with no restrictions. Airlines need the flexibility to manage both price sensitive restriction free markets as well as traditional markets with restrictions.
Another challenge facing an airline is the highly competitive nature of the industry. Passengers have access to a number of choices in the marketplace and passenger behavior is influenced by competitor actions. An automated RM system that considers competitive landscape in decision making is no longer a luxury and is something that is integral to maximizing airline gains through informed decisions.
In these times of shrinking margins on base fares, airlines are looking at every single opportunity to supplement revenues through sale of ancillary services. Revenue management systems need to make recommendations by considering the total value of a passenger including ancillary revenues and costs.
The need for customizable automated revenue management systems that maximize revenue while honoring the business constraints at an airline has never been stronger.
While major carriers have recognized the revenue generating potential of an automated revenue management system, smaller airlines have relied on manual processes owing to the cost associated with an automated RM system. However it is imperative that these airlines adopt RM systems in order to enhance revenue, maximize profitability and remain competitive
At Revenue Technology Services (RTS), we understand airline revenue management intimately and are confident of providing a cost-effective customizable decision support system that can help improve revenue, productivity and service.. With expertise, experience, and deep theoretical and practical knowledge in revenue management, we have developed a broad solution portfolio that not only includes Revenue Management software but also provides key business insights through powerful business intelligence (BI) solution. RTS’s solutions will enable an airline to boost revenues significantly while satisfying key planning and operational requirements.
RTS solutions cover a wide range of business functions such as revenue management for both traditional and restriction free price sensitive markets, consideration of competitor information, support for ancillary services and powerful management reporting. RTS offers the following solutions and services:
- Revenue Management software – RTS® ProfitOpt
- Business Intelligence Solution
- End to end consulting services
- Commercial strategy – Products, revenue management, inventory control and pricing
- IT strategy – automation, business intelligence, and migration plan
- Education and Training – revenue management, pricing, and marketing
- Business process assessment (Consulting)- business process mapping, gap analysis, change management, and best practices
- Operations research - statistical and operations research modeling and support
- IT Services – integration services and customized solution development