One of the most common questions we hear from airline CEOs through to Airline Revenue Management departments is ‘have we maximised revenue?’
Whether your airline uses Airline Software or not, it is possible to gauge how well your Airline Revenue Management team is performing.
Airline Revenue Management teams are fundamentally managing availability of prices and the overbooking of saleable capacity with the overall objective to maximise passenger revenue.
Both tasks have associated risks and the 2 ways the airline revenue management staff get it wrong are by being too aggressive or too cautious.
The common terms to describe when passenger revenue is not maximised is called Spillage and Spoilage.
Initially, management and staff need to know how often spillage and spoilage is occurring but ultimately, they want to prevent it from happening again. With the benefit of hindsight, it is possible to calculate how much revenue was lost.
Aviator software records all the critical information required throughout the life of a flight to measure performance (subject to data available in reservation inventory files).
The criteria and assumptions used to measure spillage and spoilage are customized by each airline and are customizable down to market level.
Having criteria based on your own assumptions and your own fares provides a mechanism to know how much value your revenue management team is adding and how much revenue they are potentially missing out on. Would you like to see where your airline revenue management department lies between the best case and worst case scenarios?
Having the ability to summarise by network, region, route, staff member, aircraft, DOW, flight number, leg or segment, departure times etc. allows trends to be identified and allows for corrective action for future RM.
Aviator software allows these processes to be totally manual or fully automated. You decide. The important thing is knowing what data to capture, how to set criteria to measure performance, having time to analyse the data, presenting the results at the right level and updating future flights to ensure passenger revenue is maximised.
