AIRLINE GOES MISSING AND NO ONE KNEW ABOUT IT
Rassure Success Stories Moment – episode 8
We are all aware that, to maximise revenue, airlines publish hundreds of thousands, or even millions of fares with its associated rules. Making fares and rules work as one is critical for airlines to maximise revenue. A very large supermarket, by comparison, may have only about 500,000 stock keeping units. This extreme volume of fares and rules not only has made airline revenue audit a challenging task, it also presents a daunting challenge to Airline Pricing.
So, can mistakes happen when managing millions of fares? What are the consequences of such errors?
When an airline mistakenly underprices, the consequences are visible very quickly – there is a run of bookings for that cheap business class fare to Singapore(1). It cost the airline almost US$1.5M before the error could be corrected. But what happens when a fare is uncompetitive or more subtly, unable to be sold? What is the damage?
Recently, during the revenue audit for one of our airline clients, our RAX AI powered platform reported a curious scenario: A number of economy class tickets were violating the rules for advance booking/ticketing.
The normal response during audit is to reprice the ticket at the next higher fare level which meets the advance booking/ticketing condition. What was unusual this time around was, RAX, Rassure’s smart Sales Audit platform, reported that no higher economy class fare level could be found! The implications of such a finding are very significant as revenue from flexi-fares could deliver ~20% of an airline’s revenue. This meant that our client did not have a single valid fare for sale with a longer time to ticket. The Airline was effectively missing! In this instance it would not have affected passengers who book and ticket within 72 hours. However, the airline would have been ceding market share for any enquiries with a longer ticketing time limit.
Only by increasing the frequency of sales audits can this type of revenue leakage be identified. Only RAX with its automation and data integration is able to do so.
Rassure is currently working with some of our clients in delivering revenue audit results on a weekly basis. In 2022, our aim is to deliver results on a daily basis so they can get instant feedback on some of the most critical financial results.
How are you ensuring you are not missing in action?
All airlines are looking for every possible way to recover fast. Let Rassure be one of the partners in this recovering journey!
Not Detected, Not Seen, Lost Profit.
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