The revenue management framework and the approach to pricing will have to unlearn and re-learn to adapt and deliver in the new realities.
Restricted movements across the world due to the COVID-19 pandemic have severely affected the airline industry, making 2020 one of the worst years in its history since 9/11 attacks and 2008 global financial crisis combined. With an 85% decrease in global air travel, a report released by IATA recorded a loss of $84 billion in 2020 with an additional predicted loss of $15 billion in 2021, leaving the industry in a period of extended recovery at least until the year 2024.
The complete disruption of travel in the last eight months has resulted in airline companies to realize that there would be an additional dependency on accessing, processing, and analyzing real-time market data to perform and succeed in the new normal. This also means that the revenue management framework and the approach to pricing will also have to unlearn and re-learn to adapt and deliver in the new realities which have no bearing to past learnings and approach. All of this has given rise to a new breed of post COVID airline revenue and pricing managers that face a unique set of challenges they have never encountered before, namely: performing in uncertain market conditions, delivering on customer expectations, identifying new source of revenue streams and improving yield.
With airlines in an acute need of capital as they resume services in the new reality, the revenue and pricing managers need to work from the ground up to reorient the airline revenue management framework while dealing with volatile demand patterns, frequently changing government regulations, limited capacity and resurgence of infection waves to name a few. This means that the pricing and revenue management framework will need a change in their approach and working model in the new normal.
Why is the problem bigger than before?
Pricing played a smaller yet critical role earlier before OTAs and third-party partners came into play which put the focus on selling the “cheapest seat”. With the emergence of OTAs, the emergence of voice search options and mobile apps travelers now had the power of comparing prices in a few clicks thus making it more important for airlines to remain up to date always and be aware of competitor pricing strategy at all times. The rise of ancillary based offerings for the traveler makes matters more complicated for pricing managers to decide the right offer.
However, the challeges of the post COVID airline revenue and pricing managers are very different from the above.They need to make pricing decisions much quicker keeping into consideration changing market conditions along with ensuring that they get information from the right channels, optimize routes based on demand, plug revenue losses on third party demand websites and optimize pricing strategy based on traveller sentiments, travel triggers and paying capacity. As a result, they cannot rely on old methods and pricing structures.
RateGain understands the complexity involved in generating revenue in the post-COVID world and why airline revenue & pricing managers to change their approach to price tracking. To ensure the same we upgraded our competitor pricing intelligence solution, AirGain to enable revenue & pricing managers leverage a monitoring platform that tracks daily changes by leveraging forward-looking data in real-time and takes appropriate decisions that reflect market trends in the new normal.
Real-time rate intelligence from appropriate sources
The post COVID revenue managers need unlimited access to end user-facing intelligence that allows them to track market changes in real-time. AirGain delivers real-time, end-user data from 200+ airlines across 700 demand sources allows them to draw insights available from the market data and use them for improved analysis and recommendations. Powered by RateGain’s proprietary algorithms, features such as competitive alerts and availability assist appropriate decision making at the right time and would prepare airlines for delivery of their services in the post-pandemic era.
Action-based insights delivered by a scalable UI
The post-COVID revenue management will also safeguard best performing OnD pairs as flights resume operations with an apple-to-apple comparison of competitor flights. AirGain delivers insights with a scalable UI that allows airlines to check for other competitors by providing pricing comparisons with a click of a button. The solution enables the ability to track up to 12 competitive flights for the airline’s best-performing O&Ds ensures course correction based on historical trends, ensuring that the airline is never outpriced again. With real-time insights and unlimited intelligence to draw from, AirGain facilitates faster decision making powered by visualizations that are quick to load and scale and performs a detailed flight search against your competitors for the best performing O&D pairs.
User-defined filters Analyzing with multiple visualization formats
Airlines need to possess the ability to deep dive into analysis in context to their business objects faster than ever before. AirGain provides airline companies the right insight into the market with easy to use, predefined filters, and visualization formats that allow toggling between flight duration, price, and the number of stops. This not only allows airlines to compare pricing offered by others with a single click but also removes the hassle of looking through endless streams of data to detect actionable insights.
Save Time with Advance Reporting
AirGain helps airlines save time and effort by providing the capability of scheduling reports up to 365 days in advance and tracking the latest fare trends. The ability to process huge volumes of airline data at a quicker pace and deliver unlimited, on-demand reports at the click of a button allows airlines to get rid of the clutter and receive a clear picture of the most competitive routes, allowing companies to make appropriate decisions that impact the pricing strategy.
The way forward for airline companies
Due to the changing nature of the airline industry and the varying customer behavior, real-time rate monitoring is no longer optional for airline companies. There is a need for improved decision making, which can be implemented by accessing and analyzing real-time market intelligence data to draw actionable insights that can help revenue managers develop pricing strategies for the future. The seamless integration of solutions and improved forecasting delivers an improved experience, resulting in improved pricing decisions, in-line with the current market position and trends.
To know more about how you can benefit and leverage the power of accurate data to transform your airline pricing and revenue management, visit https://rategain.com/travel-software/airfare-intelligence-solutions/
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