The aviation industry continues to strive despite the pressing issues that challenged the world over. Revenue management is among the main concerns that airline companies deal with constantly. With a plethora of ever-changing factors, it is no wonder that even the most skilled analysts and personnel still have headaches in solving each problem. The ongoing pandemic has made everything more taxing and tedious, putting more pressure on airlines to help recover from the recession. Has the aviation industry benefited from this shift?
As a revenue manager, you have to note significant factors before seeking the right solutions. Each decision made directly impacts the airline’s profitability. Airline inventory is a perishable commodity, and it remains to be a trifling matter for most managers. Once an aircraft door closes, every empty seat on that airplane contributes to the loss of revenue. If properly utilized, airlines could have pocketed that loss as a potential income.
The second underlying principle refers to the different types of travellers. Not everyone has the same purchasing capacity. The most preferred kinds are leisure and business travelers. Customers planning for getaways and leisure trips often book in advance. Airlines can expect an increase in travel during peak seasons and holidays. Business travelers, on the other hand, purchase bookings close to the date of their departure. They are also willing to pay a higher fee. Knowing these principles helps you create better plans for optimal revenue management. However, it should not stop there. Be wary of the factors that could cause harm to revenue management. There are three things that you should stop doing in revenue management.
Giving Low Priority to Revenue Leakage
Revenue Leakage is a concern that you should not overlook. First and foremost, revenue leakage sabotages your revenue management strategy. All the science to maximise revenue goes to naught if agents behaviour and other airline policies result in massive revenue leakage. In addition, what many revenue managers do is underestimate the scale of actual revenue leakage. This problem pertains to profit loss because of reasons and discrepancies such as lack of personnel and improper handling and auditing of ticket sales. Failure to detect revenue leakage results in a massive loss of potential income on top of sabotaging your revenue management strategy. You can take advantage of artificial intelligence integrated into a smart auditing system that can easily mend this problem.
Important but Non-urgent Issues from Leakage Perspective
Determining revenue leakage is a must for managers. But a more pressing matter is knowing which problem to deal with first. There are certain situations where you have difficulty prioritizing tasks. There is a difference between important and urgent concerns and important but non-urgent ones. It’s about time that managers acquire the ability to classify the urgency and importance of each matter.
Non-holistic Approach in Sales Audit and BIDT
Having a deeper understanding of BIDT and Sales Audit saves the airline company from unnecessary charges that are preventable. Due to Sales Audit Abuses, Booking Cost Leakages, Refunds & Exchange & Revalidation Abuses, and Inventory Abuse, BIDT Audits highlight unproductive bookings and protect airlines from potential losses. An effective manager sees the big picture and should develop creative and holistic solutions that resolve these issues efficiently.
The aviation industry continues to strive despite the pressing issues that challenged the world over. Revenue management is among the main concerns that airline companies deal with constantly. With a plethora of ever-changing factors, it is no wonder that even the most skilled analysts and personnel still have headaches in solving each problem. The ongoing pandemic has made everything more taxing and tedious, putting more pressure on airlines to help recover from the recession. Has the aviation industry benefited from this shift?