Airline Revenue Management Flashcards

Flashcards about Airline Revenue Management

Airline Revenue Management (RM)

A strategic approach used by airlines to maximize revenue from their available inventory of seats and flights.

Maximizing Revenue in Airline RM

Selling the right product to the right customer at the right price and time.

Optimizing Capacity Utilization

Ensuring that available seats are effectively utilized to generate maximum revenue and minimizing revenue losses from unsold seats.

Enhancing Customer Segmentation

Identifying and targeting different customer segments with personalized pricing and services.

Improving Forecasting Accuracy

Utilizing advanced forecasting techniques to predict demand patterns and make informed revenue management decisions.

Maintaining Competitiveness

Staying agile and responsive to market dynamics to remain competitive in the industry.

Static Pricing

Fares are generally the same for a particular route, regardless of the time of day, day of the week, or season.

Dynamic Pricing

Fares change frequently along pre-defined price points based on the time of day, day of the week, seasonality, and other factors.

Continuous Pricing

Fares change in real-time without pre-filed fares and rules based on constant changes in demand and other factors, such as weather, shopping context or competitor pricing.

RASK

Revenue per Available Seat Kilometre

Yield

Revenue per Revenue Passenger Kilometre

CASK

Cost per Available Seat Kilometre

Overbooking

Selling more seats than available on the aircraft to maximize revenue.

Overbooking Calculation

Factors influencing overbooking level : Historical no-show rates, Booking patterns, Statistical models and algorithms

Upselling

Offer to upgrade to a higher fare class or purchase additional services/amenities.

Cross-Selling

Offer non-airfare products or services such as hotel accommodations, car rentals, or travel insurance during the booking process

Promotional Pricing

Temporary price reductions to stimulate demand

Seasonal Pricing

Varying prices based on peak and off-peak travel periods

Event-Based Pricing

Price adjustment for flights with increased demand due to major events or holidays

Market-Based Pricing

Price adjustment based on market characteristics such as purchasing power or willingness to pay