is CO yield management individualized?
Dec 13, 2007 | 11:58 pm
#1
Original Poster
Join Date: Jun 2007
Programs: CO-plat, SPG-plat
Posts: 1,658
is CO yield management individualized?
In the late hours of the evening, I obviously have too much spare time if I'm musing about CO's yield management software. xyzzy's comment in another thread touched on CO's excellent yield management, and I've long wondered whether the software is individualized.
For example, if 5 passenger on a given EWR-SEA flight are connecting from BWI, does CO look only at historical data and conclude that 80% of BWI-EWR-SEA passengers show up? Alternatively, does CO look at profiles of passengers A - E and conclude that passenger A shows up 20% of the time whereas passengers B-E show up 100% of the time? Depending on the numbers, the results could be rather different.
For example, if 5 passenger on a given EWR-SEA flight are connecting from BWI, does CO look only at historical data and conclude that 80% of BWI-EWR-SEA passengers show up? Alternatively, does CO look at profiles of passengers A - E and conclude that passenger A shows up 20% of the time whereas passengers B-E show up 100% of the time? Depending on the numbers, the results could be rather different.
Dec 14, 2007 | 12:16 am
#2
Join Date: Feb 2007
Location: SFO/SJC/OAK
Programs: CO Plat (thanks to FT), UA 1P, AA
Posts: 338
In the late hours of the evening, I obviously have too much spare time if I'm musing about CO's yield management software. xyzzy's comment in another thread touched on CO's excellent yield management, and I've long wondered whether the software is individualized.
For example, if 5 passenger on a given EWR-SEA flight are connecting from BWI, does CO look only at historical data and conclude that 80% of BWI-EWR-SEA passengers show up? Alternatively, does CO look at profiles of passengers A - E and conclude that passenger A shows up 20% of the time whereas passengers B-E show up 100% of the time? Depending on the numbers, the results could be rather different.
For example, if 5 passenger on a given EWR-SEA flight are connecting from BWI, does CO look only at historical data and conclude that 80% of BWI-EWR-SEA passengers show up? Alternatively, does CO look at profiles of passengers A - E and conclude that passenger A shows up 20% of the time whereas passengers B-E show up 100% of the time? Depending on the numbers, the results could be rather different.
1. The confidence levels would be too low. Most individual do not fly enough on a single airline to have significant statistics. And individual flying patterns can change very suddenly: change of jobs, locations, life circumstances...
2. It would be extremely expensive, and maybe provide only a marginal improvement over global statistics.
3. I just cannot imagine CO's IT being able to handle this!
Just my $0.02
Dec 14, 2007 | 12:27 am
#3
Join Date: Dec 2007
Location: Austin, TX
Programs: UA S; Marriott LG; IHG P; Hertz PC; AA, WN, Pan Am!
Posts: 820
As interesting as the idea is, I do not think that this (individualized yield management) is the case. And there are several reasons for this:
1. The confidence levels would be too low. Most individual do not fly enough on a single airline to have significant statistics. And individual flying patterns can change very suddenly: change of jobs, locations, life circumstances...
2. It would be extremely expensive, and maybe provide only a marginal improvement over global statistics.
3. I just cannot imagine CO's IT being able to handle this!
Just my $0.02
1. The confidence levels would be too low. Most individual do not fly enough on a single airline to have significant statistics. And individual flying patterns can change very suddenly: change of jobs, locations, life circumstances...
2. It would be extremely expensive, and maybe provide only a marginal improvement over global statistics.
3. I just cannot imagine CO's IT being able to handle this!
Just my $0.02
But as an improvement over global stats, you're probably right (and definitely right RE cost, unless they could convince the other carriers to license it and try to recover some of the costs).
Dec 14, 2007 | 1:25 am
#4
Join Date: Jan 2007
Location: The high ground in Swamp 205 miles east of the Dungeon (IAH B-84)
Programs: CO Plat / Hilton Gold / RCL Diamond Plus
Posts: 144
As interesting as the idea is, I do not think that this (individualized yield management) is the case. And there are several reasons for this:
1. The confidence levels would be too low. Most individual do not fly enough on a single airline to have significant statistics. And individual flying patterns can change very suddenly: change of jobs, locations, life circumstances...
2. It would be extremely expensive, and maybe provide only a marginal improvement over global statistics.
3. I just cannot imagine CO's IT being able to handle this!
Just my $0.02
1. The confidence levels would be too low. Most individual do not fly enough on a single airline to have significant statistics. And individual flying patterns can change very suddenly: change of jobs, locations, life circumstances...
2. It would be extremely expensive, and maybe provide only a marginal improvement over global statistics.
3. I just cannot imagine CO's IT being able to handle this!
Just my $0.02
Dec 14, 2007 | 6:10 am
#5
Join Date: May 2002
Location: Moreland Hills (CLE)
Programs: Over-entitled UA 1.3MM Gold, AA Gold, Hilton Diamond, Marriott L-T Plat, Hertz PC
Posts: 5,526
Dec 14, 2007 | 7:13 am
#6
FlyerTalk Evangelist
Join Date: Aug 2002
Location: Bay Area, CA
Programs: UA Plat 2MM; AS MVP Gold 75K
Posts: 35,092
I don't know about this, but they most certainly take connections (and where they're coming from ) into account.
For example, the late afternoon/evening flights out of IAH have a lot of Caribbean or Latin American connections; and the evening flights out of EWR have a lot of Europe connections.
They certainly take the int'l segment no-show factor into account for the domestic flights when overbooking.
For example, the late afternoon/evening flights out of IAH have a lot of Caribbean or Latin American connections; and the evening flights out of EWR have a lot of Europe connections.
They certainly take the int'l segment no-show factor into account for the domestic flights when overbooking.