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23 Jun 2020

The big reset: why a mindset shift is needed in airline revenue management

Revenue management, offer optimization, network planning, and scheduling are top of mind for airlines today, and fundamental to their commercial recovery. Over the past few months, Amadeus has been working closely with our airline customers across these areas to help them navigate through this challenging environment.

COVID-19 reset the foundations of traditional revenue management science and accelerated the need to evolve. While the far-reaching impact of the pandemic was difficult to foresee, changes in consumer behavior, the marketplace, and technology were already unfolding. Spurred by these changes, our data scientists are challenging revenue management’s principles, practices, and assumptions.

We have evolved our models and algorithms to adapt to dynamic market conditions and continue to research ways of integrating new data sources. We are bringing revenue management, network planning, and scheduling science together to address changes to networks and schedules. Only by creating synergies between these areas and bringing the broader vision together will airline analysts be able to fully optimize offers, price, and revenue across their networks.

I spoke to Thomas Fiig, Director and Chief Scientist at Amadeus, Airlines R&D, and Suraj Mohamed, Director of Business Consulting at Amadeus, Asia-Pacific, about how COVID-19 is different from the previous crises the industry has overcome and what that means for airlines; our recommendations to airlines today to help navigate these difficult times; and the innovation that lies ahead for revenue management science.

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