Dark art or necessity?

Making sense of the complex ways airlines try to maximise their income

A better understanding of what airlines call “revenue management” may be helpful to travellers who regularly buy their own tickets. Airline profitability is fragile, so at the very least a well-managed airline will ensure that capacity is not wasted. It does this by filling flights as full as possible (passenger load factor), and by maximising revenues for each seat sold. So airlines employ teams of revenue management analysts who pore over data and trends supported by more and more automation and sophisticated forecasting tools. Even in the industry it is not fully understood, and some see it as a dark art. But why is it so complex? SUPPLY AND DEMAND How many passengers end up travelling on a flight, and at what price will vary according to numerous factors. Some of these…

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Business Traveller Asia-Pacific Edition (Digital) - 1 Issue, November 2018

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