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Airline Fares Distribution ABTECH Conference 2003

Airline Fares Distribution ABTECH Conference 2003. Jerry Foran Revenue Management. Agenda. waking up to the ‘no frills’ revolution pricing response adapting revenue management the cost of complexity possible future developments questions. Waking up to the ‘no frills’ revolution.

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Airline Fares Distribution ABTECH Conference 2003

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  1. Airline Fares Distribution ABTECH Conference 2003 Jerry Foran Revenue Management

  2. Agenda • waking up to the ‘no frills’ revolution • pricing response • adapting revenue management • the cost of complexity • possible future developments • questions

  3. Waking up to the ‘no frills’ revolution • 9/11 gave us the incentive to respond IMAGE

  4. London airports 5 year Shorthaul passenger growth 1996 v 2001

  5. Pricing response UK Europe • removal / standardisation of min stays • removal of advance purchase • standardisation of other rules • 3 fare types

  6. Pricing Response

  7. BA.COM

  8. BA.COM

  9. BA.COM

  10. Which is the low cost airline?Daily Telegraph 14/01/2003 • The fares quoted were all checked on December 31 for flights departing on May 24 and returning May 31. I selected the cheapest departure on the day with the exception of one EasyJet service to Athens which was an overnight flight. • London airports: BA flights were from Heathrow or Gatwick, EasyJet's from Luton, Stansted or Gatwick, while fares for Ryanair and Buzz are from Stansted. Graphs and Charts

  11. before after Flight Flight Price Price Days to flight Days to flight Adapting Revenue Management

  12. Adapting Revenue Management Categorise Flights Adjust for Events Sense Check by Day/time Set Standard Templates Monitor & Adjust

  13. Adapting Revenue Management

  14. Adapting Revenue Management • move to a simple base price with digestible trade up steps • simplify and standardise fare rules • merge pricing and inventory management processes so prices can effectively be set flight by flight • market and deliver a consistent customer proposition, i.e. it is better to book earlier • BA.COM

  15. Cost of Complexity • 5,009,056 fare and rule changes • 80% of longhaul revenue from1% of fare types • 97% of longhaul revenue from 10% of fare types • numerous ticket types • 2/3 of all calls to Contact BA are for servicing • complexity doesn’t work on the web • customer doesn’t understand it

  16. Possible Future Developments • reduction in number of fares filed • all prices filed! • only filed once, i.e. not directly through to GDS • simplification of rules across BA network • rules applied at time of booking, e.g. instant purchase • 100% use of GDS fare guarantee

  17. Possible Future Developments • all prices held on one database • removal of ‘green screen’ access • price offered with availability request • 100% e ticket • No Ticket

  18. Questions

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