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Revenue analysis
Revenue Management

Analysts Leverage Technology to Go Beyond Revenue Management

Revenue management (RM) analysts, especially for airlines, are at a premium in today’s market. Given the continued volatility of air travel demand around the world, complex drivers of passenger willingness to pay, and frequent schedule optimizations, the role of an RM analyst is more important and complex than ever before.

While RM analysts have to manage the numerous drivers of passenger behavior and market-wide network changes, they must also ensure they are capturing each dollar of potential revenue based on the demand environment and commercial strategy of the airline. However, the tools currently available to these analysts don’t drive engagement, but instead, require in-depth market analysis and painstaking workflows.

“What RM analysts need is a platform that takes all contextual airline and flight data, recognizes the best possible outcomes, and enables faster, more accurate pricing decisions.”

The Revenue Operating System® from FLYR Labs is designed to take the rich, relevant, real-time data an RM analyst uses and provide the context behind it, automating much of their day-to-day decision making and unlocking opportunities to uncover revenue optimization across the business. With The Revenue Operating System at work, analysts can spend more time performing strategic tasks, leveraging the software to influence broader commercial decisions such as proactive marketing or network strategies.

Much of an RM analyst’s daily workload is comprised of using historical data to determine load factor forecasts and optimal price points to offer for future flights. This manual analysis is both time-consuming and difficult to predict, especially in today’s volatile environment where historical data is not a reliable predictor of future performance. Instead of trying to forecast the future based on recent history alone, which is dependent on year-over-year consistency, FLYR is hyper-focused on each flight’s context. The advanced technology behind The Revenue Operating System analyzes each piece of commercial data, ranging from bookings, schedules, competitor information, ancillary transactions, and third-party demand signals. Understanding correlations between each input results in ultra-accurate forecasts and powerful pricing strategies.

How FLYR delivers

FLYR’s Product Success team assists managers and analysts at the airline, working with them to transfer their existing workflows into The Revenue Operating System to ensure appropriate mapping of their processes all in one place. As an RM analyst is typically responsible for maximizing revenue for roughly 20 to 40 markets or origins and destinations (ODs) at a given time, the easy-to-navigate user interface offers daily views into markets at each departure month to flag important areas.

Screenshot of Dashboard in Cirrus

RM Analysts often agree with 90% or more of The Revenue Operating System’s autonomously generated pricing decisions. Even so, the system efficiently surfaces the remaining 10% of flights that may need attention. Thus, the analyst doesn’t have to hunt for opportunities or actions; they’re right there on the dashboard, ready for a decision to be made and implemented within a matter of a few minutes.

Supporting new revenue managers and reduced workforces

The Revenue Operating System helps automate many of the easier, more routine pricing decisions to allow analysts to spend their time on more complex decisions. One such area is the part of the booking curve where most of the revenue is booked (i.e. the “meat” of the booking curve). This differs by market. For example, for long-haul flights, the sweet spot is farther away from the departure time, as people plan big trips in advance compared to booking shorter trips closer to the departure date.

In those areas where analysts often don’t have time to look – often between 200 and 120 days before departure – many airlines use blanket rules, which can end up staying in place for months without being reviewed to determine their optimality. The Revenue Operating System’s ability to make granular, flight-level ‘analyst-grade’ pricing optimizations farther from departure accommodates the analysts’ need for decision making where revenue builds are typically higher.

FLYR can also help in an airline’s analyst onboarding processes. Newly hired analysts can take up to six months to fully learn a carrier’s revenue management system, including learning the intricacies of their market set. However, The Revenue Operating System is so straightforward and easy to use that it shortens onboarding time significantly compared to typical systems. As analysts are getting up to speed, The Revenue Operating System is continually learning the competitive environment of the analyst’s markets and helping to make decisions along the way, providing invaluable data for the analyst.

Influencing and trusting the pricing outcome

In typical RM systems, analysts make adjustments by increasing or decreasing the remaining demand outlook of total flight demand. The RM analyst doesn’t know what the impact of their adjustment is, because the pricing calculation is done downstream of their interaction. The analyst doesn’t control the price, they just control the input to the algorithm.

Screenshot of Influence Controls in Cirrus

The Revenue Operating System, however, provides the ability to change the price directly. A key differentiator in The Revenue Operating System is that the RM analyst has the ability to directly adjust the pricing the system has provided. The analyst can say, “On this set of flights, increase the price by $10 because of certain flight booking trend attributes, such as, ‘It’s ahead of its expected booking curve,’ or, ‘It’s driving more revenue than expected.’”

Alignment across all commercial groups

The extra deliberation time FLYR provides for more complicated decisions can also be used to influence other areas of the business. Even now, for example, there is rarely a strong link between revenue management, marketing, and network planning departments. But as The Revenue Operating System eases the workload for analysts, they have more time to focus on other areas of the business, including how to structure marketing campaigns, which customers to target, when to target them, determining the focus markets, and the frequency set with other commercial airline teams.

RM analysts can also bring more insight into ancillary management. Some airlines house their ancillary management efforts in the marketing department, while others have it reporting to revenue management. Either way, it tends to be managed with a static set of rules. The understanding of how fare, fare families, and ancillary transactions contextually relate to each other enables airlines to dramatically grow their ancillary contribution as a component of total revenue performance. Recognizing how an increase or decrease of fares, for each individual itinerary, impacts ancillary attach values and revenues in either direction is critical to total revenue optimization.

Learn more about how your airline RM analysts can unlock revenue potential with The Revenue Operating System from FLYR at https://flyrlabs.com/product/.

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