When reflecting on the experience of flying in the past decade, travelers around the globe will provide their perspective on change witnessed by them.
FREMONT, CA: The transformation in the airline sector has been enormous. An industry-wide revolution was kicked off with the early success of the first low-cost carriers, as the traditional carriers raced to expose base fares and compete for budget-minded flyers. Even now, airline commoditization continues to prevail. Commoditization also creates opportunities. For instance, travelers like cheap fares, but in a market where big and small competitors are intent in shoehorning, the budget-minded travelers in a tighter cabin also allowed to set the bar on the airline experience to be on the lower side. Travelers want to have that ‘extra’ experience, and they are projecting a willingness to pay for them. Travelers want to experience the opportunities to add value to flying; hence, carriers should continue to explore cabin segmentation and broad product strategies to derive additional revenue.
To create a new product and sell them are two different things, getting the right product at the right time, place, is essential. While dynamic pricing is not unique to the airlines, the carriers have more data-driven techniques and variables at their disposal to continue on the path of sophisticated online retailers.
The upcoming dynamic pricing engines boost the sale of every individual seat and upgrade catering to the real-time backdrop of changing demand and market situation by pairing it with AI, granular customer profiling, and dynamic building.
Technology and their techniques are evolving at a high rate; hence, travel suppliers are already leveraging new pricing engines to up-to-date fares rapidly. Despite its potential, dynamic pricing is not an easy solution, as for numerous carriers reaching this level of sophistication demands structural change in data management process and integration along with legacy operating functions like sales, operations, and marketing.
Cognitive technologies, advanced analytics, and optimization and retailing techniques are a few critical tools carriers that can be leveraged in the upcoming years. With opportunities being limited to offset rising fuel costs due to cost reductions in various areas, it is obligatory that airlines prioritize identifying, implementing, and developing new revenue-generating capabilities.