Fortunately, the crisis is busily subsiding with travel bans being lifted, and airlines resuming at least some of their normal schedules. Now, more than ever before, it’s crucial to be aware of where your market lies in comparison with pre-COVID levels and how you can immediately start benefiting from the low-hanging fruit.
We’d like to give you five solid tips that you can apply right away to ensure you don’t miss out on any opportunity to increase revenues on every flight.
1. Check your calendar
The airline passenger market is eager to start travelling again and will make full use of weekends, public holidays or any special events taking place. Remember, airlines are recovering from a long and exceptional low demand period with very mild demand forecasts in place. These low demand forecasts will undoubtedly lead to heaps of seats being allocated to low booking classes. Airline Revenue Managers must stay informed when these special events take place and must ensure that forecasts and inventory levels are correctly set to maximise revenues during these periods. Fortunately, Aviator has all the tools available to assist airline Revenue Management analysts to manage these effectively; from mapping future higher demand periods to specific historical dates (with similar demand) to manually adjusting automated forecasts either upwards or downwards. Opportunities to increase revenues don’t come frequently these days, so let Aviator help you to fully capitalise on them when they do.
2. Do frequent competitor analysis
Your competitors’ pricing actions are generally a good indicator of whether they are experiencing a recovery in passenger demand or not. It’s therefore very important for airline Revenue Management analysts to keep track of competitor’s pricing evolutions by frequently monitoring their websites and OTA’s. This is indeed a very demanding task, but luckily there’s an easy solution; Aviator can automatically import competitor fares via your 3rd party supplier and then optimise future flights based on these competitor fares. You set the business rules and parameters and Aviator will do the rest to ensure you remain competitive.
3. Monitor traffic to your website
Do you know that the number of visits your website receives is an excellent indicator of demand? As passengers nowadays are presented with so many different options and are extremely reliant on the internet, they will be sure to check out your website before making a reservation. Airlines can use their Google Analytics Account to track their website traffic. Use this information to benchmark your different markets year-on-year to monitor changes in travel and demand patterns. You can also use the location feature to see where the searches are from and then adjust your pricing and inventory strategy accordingly. Markets and travel patterns have changed and the airline’s Revenue Management analysts must adjust strategies to accommodate these changes. Aviator’s optimisation engine allows the Revenue Management analysts to manipulate any departure’s market price sensitivity to ensure automatic recommendations are a true reflection of the reality.
4. Perform fresh market segmentations
Especially now, it’s good practice for airlines to go through a fresh market segmentation exercise on all their routes and departures. The below diagram will greatly assist airlines to re-evaluate their inventory and pricing strategies.
- High Seat Factor and High Yield Factor: These flights are your cash-cows and your strategy should be around protecting the inventory, i.e. the higher booking classes. Set your business rules within Aviator’s optimiser to help you achieve just that.
- High Seat Factor and Low Yield Factor: Airlines should follow a targeted pricing strategy to try and upsell to higher classes by focussing on adding value to tickets, for example, by offering additional frequent flyer miles on selected higher booking classes.
- High Yield Factor and Low Seat Factor: Airlines should follow a targeted pricing strategy to attract lower yield passengers without damaging their current higher yield market. To achieve this, the airline’s Revenue Management analyst must use Aviator’s advanced tools to understand when the higher yield market starts to book and then apply the applicable optimiser business rules to stimulate demand outside of these higher yield booking periods.
- Low Yield Factor and Low Seat Factor: These flights should be placed in intensive care and the airline should seriously consider cancelling them if there’s no hope in recovery.
5. Share the knowledge
One of the main advantages of using an Airline Revenue Management system like Aviator is the wealth of information at your fingertips. However, the common mistake many airline Revenue Management analysts make, is that this information is not shared across all departments. The different departments within an airline focus on different aspects of the business and we at Maxamation understands that all too well. That’s why Aviator allows the Revenue Management analyst to create unique reports with custom fields to suit each department’s unique requirements. And the kicker; the Revenue Management analyst can schedule these reports to be delivered automatically to any e-mail address at any time. Now everyone will be kept informed automatically whilst the Revenue Management analyst can focus on the job at hand – more revenues from every flight.