Airline BI Solutions - Revenue Management
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 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
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
- 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
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:
- 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
- Management Reporting
- Business Decision Support Systems
- Advanced Analytics
- Customer Segmentation
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
- Tracking and forecasting demand - resulted in $5 million in
- Full reservation analysis - realized $20 million in savings
through alliances, overbooking systems, and demand-based scheduling.
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More Detail on Airline Industry BI Strategy, Program & Technology
Airline Index | Decision
Analytics | CRM | Passenger
Services | Revenue Management | Yield
Management | Pricing & Profitability
| PNR Records | Fraud
Detection | Loyalty | Flight
Operations | Crew Scheduling | Cargo
Management | MRO | SCM
| Expert Systems | Industry