Revenue Maximizer!
Jun 8, 2010, 12:42 pm
#1
Original Poster
Join Date: Oct 2005
Posts: 656
Revenue Maximizer!
We all know Yield Management is a big priority for airlines but is also a strange and convoluted business.
Instead of fare buckets, take the Optimum revenue mix and assign corresponding days out from the flight. i.e. 6 months, 90 days, 30 days, 14 days, 7 days, 3 days, 1day. Make available the same mix of seats as they would in the fare buckets and then auction those seats online via your web site with the auction end date being those days out. There would be no need for a YM department and eventually you could also eliminate most reservation agents and/or just convert them to customer service staff. I am sure a auction would maximize revs better then any current process now does. So more revenue with less cost, talk about a win-win.
What is wrong with this idea?
Instead of fare buckets, take the Optimum revenue mix and assign corresponding days out from the flight. i.e. 6 months, 90 days, 30 days, 14 days, 7 days, 3 days, 1day. Make available the same mix of seats as they would in the fare buckets and then auction those seats online via your web site with the auction end date being those days out. There would be no need for a YM department and eventually you could also eliminate most reservation agents and/or just convert them to customer service staff. I am sure a auction would maximize revs better then any current process now does. So more revenue with less cost, talk about a win-win.
What is wrong with this idea?
Jun 12, 2010, 6:44 am
#4
Join Date: Jul 2001
Location: DTW
Programs: Dirt Status w/ All
Posts: 5,040
Every market is fluid and you would still need a department to manage and adjust the auctions, set minimum prices, etc. I don't think it would be less cost. You now have to deal with fake bidders, credit cards that don't go through after the auction, and other hassles.
Also, a $5 price difference is known to make people book away, even if it means a 10 hour connection. That type of customer is not going to go for the auction method where they might end up paying more than another auction, or a fixed price site.
Also, a $5 price difference is known to make people book away, even if it means a 10 hour connection. That type of customer is not going to go for the auction method where they might end up paying more than another auction, or a fixed price site.
Jun 12, 2010, 6:58 am
#5
FlyerTalk Evangelist
Join Date: May 2002
Location: Pittsburgh
Programs: MR/SPG LT Titanium, AA LT PLT, UA SLV, Avis PreferredPlus
Posts: 31,010
I can't see the public wanting to have to wait until certain deadlines to get tickets, only to find they didn't 'win' and need to wait until the next deadline to pay more and see if maybe they get tickets the next go=round. I suspect most people want to buy a ticket and be done.
"I'd love to be a bridesmaid at your wedding. I'll let you know next Friday whether I can get tickets at a price I'm willing to pay. If not, I might have another shot 14 days later. I'll let you know then so you can finish your planning..."
"I'd love to be a bridesmaid at your wedding. I'll let you know next Friday whether I can get tickets at a price I'm willing to pay. If not, I might have another shot 14 days later. I'll let you know then so you can finish your planning..."
