Airline BI Solutions - Revenue Management

Revenue Accounting

Revenue Accounting includes all the activities that occur across the revenue cycle, from sales to revenue, revenue assurance, blling and yield analysis.

The revenue accounting area seeks to quickly and accurately record the revenues that an airline generates.

Revenue Management

Revenue Management is becoming more important as the competitive airline industry is focusing on managing customer loyalty and profitability to generate incremental revenues from existing operations and customer base.

The purpose of revenue management is to maximize revenue given a set of resources. An airline seat is a perishable good, and an unfilled seat has no value once a plane takes off.

Airline industry studies have shown that improving revenue management processes by just 0.1 percent can add millions of dollars on your bottom line. Simple capabilities such as inventory management - visibility of show rates provide insight as to when to open or close inventory on existing flights to avoid overbooking issues.

Being better equipped to make critical decisions adds value to existing revenue management applications and processes. A typical airline analytics tool helps to:

• Enhance existing revenue management processes - by providing access to more detail data about how your customers fly on your airline
• Better manage overbooking and passenger no-shows - by leveraging Integrated Passenger Name Record (iPNR) data warehouse
• Identify the impact of demand and show-rate trends - through insights into customer behavior captured through the details founds in PNR record and flown data details
• Provide faster reporting - which means faster decisions, by utilizing pre-defined metrics and report structures

Advanced Analytics

Airlines require advanced business analytics software to analyze market behavior and cash in on revenue opportunities. Revenue Accounting and Management modules and point solutions include:

Revenue Accounting

• Data Collection - Reservation data and offline data
• Forecasting - including Sales Forecasting
• Optimization - including Customer Analysis and Over Booking
• Performance of Agent
• Market Research Analysis - including Route Analysis
• MIS tools - slice & dice of data
• Reporting
• Management Reporting
• Business Decision Support Systems

Revenue Management

• Advanced Analytics
• Customer Segmentation

Services

Web Interface

Revenue accounting system maintenance

Cargo management reporting

Fare Design

Airlines recognise the importance of offering flights to the desired places, at the most convenient times and at competitive prices.

Using real-time data to optimize airfares, any change in price can be tracked for impact on bookings.

By being able to immediately see how a fare is selling, allows adjustements as to how many seats should be sold at a given price.

Last minute, customized discounts can be offered to the most profitable customers, to bring in new revenue, as well as increase customer satisfaction. Without this visibility, airlines are unable to effectively balance of filling seats and optimize fares.

Typical outcomes of Fare Design through BI analytics includes:

Fare design has a huge impact on revenue. Continental Airlines gained a $40 million per year advantage through pricing analysis and yield management:

• Fare Design activities - an additional estimated $10 million annually
• Tracking and forecasting demand - resulted in $5 million in incremental revenue.
• Full reservation analysis - realized $20 million in savings through alliances, overbooking systems, and demand-based scheduling.

Next: Yield Management

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