AVIATION
AVIATION
maximize seat revenue by class based
on Passenger demand is leaving its
space to dynamic pricing, traditional
RM (Revenue Management) systems
that evolved based on point-to-point
routes to maximize seat revenue,
now need to accommodate other
channels of revenue such as ancillary
services. The need to have O&D
philosophy is gaining traction along
with tradition route philosophy. The
very thought of Airlines need to think
like Retailers is doing rounds in the
industry.
If we look at the commonality in all
these changes, lies an underlining
objective of ‘maximizing revenue’.
By optimizing all available
revenue streams, including those
from partnerships, codeshares,
and alliances, ancillary sales,
merchandising, fees and taxes, new
possibilities will become available
that will lead to subsequent financial
gains for airlines. But, the real
challenge Airlines facing is, traditional
business units and their supporting
technology, which generate volumes
of disparate and complex data,
have been “siloed,” hindering the
accessibility of comprehensive
information airlines need to
proactively sense and respond to
rapidly changing market conditions.
This resulted in lower revenues, lost
market share and uncompetitive
product offerings. Entry of smart
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December 2018
phones, and social media made the
situation even worse as huge chunks
of customer data generated added to
the already siloed enterprise data.
The need of the hour is, how to
streamline the data across the
ecosystem and have systems talk
to each other and finally to have
single source of truth across the
organization. This will act as bedrock
of Airlines IT system on top of
which all the initiatives can work
successfully. Otherwise, it will be
like ‘Garbage in and garbage out’
situation. Now, the critical question
is, who can do this? Are the airlines
not capable of sorting this? Of course,
they are. But, it is a question of
commitment rather than capability.
In most of the airlines, internal teams
are so siloed in their objectives as
they are in job functions. They need
help from the specialized technology
firms who can dig deeper into the
problem Airline facing and provide
the solution that help them maximize
revenue. It requires great deal of
domain expertise as well as technical
knowhow to solve the challenges.
Time cannot be better than now to
jump the bandwagon and fly high for
these technology firms.