Creating Dynamic Airline Offers with Pricing Science

4 Key Opportunities Of Offer Management

The rise of digital and mobile, accelerated by the global pandemic, has permanently changed consumer behavior. Travelers now expect personal offers and consistency across channels and touchpoints. This is an opportunity for airlines to adopt IATA’s NDC (new distribution capability) quicker, take control and ownership over offer creation, and embrace airline-led, omnichannel retailing powered by true dynamic pricing.

1. Retailing with Offers and Orders: Legacy pricing and distribution are a barrier to retail innovation. By moving to shop-order-pay retail processes across all retail channels, airlines are removing the separation between inventory and price. This helps transform inefficient business processes into simplified, automated, and real-time digital retailing.

2. Product and Brand Differentiation: Leveraging the NDC standard, airlines are bringing in-house the process of offer creation. As the single source of offer creation, airlines can achieve better control over their products and pricing. This enables greater product differentiation, enhanced offer relevance, and brand recognition, which combined improve the customer experience.

3. Revenue Drivers: By steering their direct distribution strategy through NDC, airlines unlock exciting revenue opportunities. Ancillary sales are an attractive revenue driver that airlines can benefit from by adapting ancillary products, bundles, and their pricing across various channels and markets.

4. Optimized Distribution Cost: The traditional GDS distribution model triggers increased costs of sales for airlines. Digital direct (web/mobile) and direct connect (NDC) channels offer better product differentiation at lower cost and are preferred and incentivized over legacy distribution channels.

Top Retail Insights

1. 4 key drivers are expected to drive airline retail strategies for recovery:

2. $40 Billion or $7 per passenger is the value the airline industry might realize from retailing.

3. NDC is key to extending AI-enabled offer flexibility across distribution channels.

AI IS ESSENTIAL IN THE NEW DIGITAL NORMAL
While airlines have historically been great at reaping the benefits of the first forms of dynamic pricing through traditional class-based revenue management, today that’s insufficient to dynamically determine products and pricing. The reality is that without a connected set of best-in-class, AI-enabled offer management across fares, seat, and ancillaries for distribution across all channels, it’s impossible to deliver a personalized shopping experience on a consistent basis. Only AI delivers the degree of accuracy and consistency, across huge volumes of data, fast enough to meet customer demands. The ideal solution pairs science-based insight with human judgement and customer understanding to deliver an exceptional, personalized buying experience.

Gain Flexibility and Control Across Every Airline Sales Channel

The right solution for airlines is to manage the total airline offer – fare, seat, and ancillaries. It enables airlines with comprehensive capabilities to determine various aspects of how products are created, priced, and distributed across the airline distribution network.

The result is a high-performance solution that delivers speed at scale outside legacy systems and can handle the complexity of the airline business, while delivering personalization and consistency and optimizing cost.

Driving Shopping & Pricing for Both Direct and NDC

PROS provides a connected, AI-powered solution to airlines for total offer management, enabling them to create and distribute differentiated offers by determining products and pricing dynamically in real time. Our solution provides best-in-class shopping, pricing, merchandising, and distribution capabilities bundled with PROS science to seamlessly integrate with your existing retail systems and power dynamic offer creation across any digital direct or direct connect (NDC) channel.

BUILD OPTIMAL PRODUCTS AND BUNDLES

Leverage offer management to create contextual offers and meet customer needs. Make it simple for travelers to pick the right product for them by generating offers given the customer's request.

Bundle products and services and offer more choices and relevance to your shoppers. Personalize product bundles based on customer segments to increase the likelihood of purchase.

Simplify the offer creation process for your retail team. Leverage your ATPCO catalogue by extending it with additional product and price flexibility. Or design and customize real-time offers completely outside of industry filing.

GENERATE PRICES DYNAMICALLY

Generate dynamic prices given the customer context to meet customer willingness-to-pay.

Maximize revenues with relevant offer pricing that reflects the search context and customer segmentation while leveraging RM data and factors.

Experiment with rule-based price modifications and scale with
science-powered dynamic pricing. Transitions from the static industry pricing practices to the level of dynamicity that matches your airline’s retail readiness.

SCALE AND OPTIMIZE DISTRIBUTION

Take control of the offers that reach customers across various channels. Ensure consistency by being the source of offer creation in real time.

Scale distribution across direct-connect channels, such as NDC partners, metasearch engines, or travel agencies. Remove look-to-book concerns with no sacrifice over the speed and performance of your offer engine.

Optimize your distribution cost to reflect channel performance and ROI.

Maximize revenues across your distribution network by leveraging dynamic offers powered by dynamic pricing science.

Streamline Airline Distribution with PROS Platform for Travel

Deliver Winning Distribution Strategies to RM, Sales, and Retail Teams

After 35 years of working with over 80 airlines of all sizes and business models, PROS continues to pioneer data science strategies to partner with and support the industry’s success.

LEADERSHIP
Translate business strategy into airline-led product and pricing using PROS science.

ECOMMERCE
Empower digital teams with an AI-based solution that enables comprehensive offer creation through easy and flexible workflows.

PRICING
Give pricing teams the ability to manage complexity and set dynamic, data-driven strategies.

DISTRIBUTION
Optimize cost of distribution based on channel ROI, without compromising performance and consistency.

IT
Integrate smoothly with retail systems already in place to minimize disruption and get more value from the tools already in use.

The PROS Platform for Travel isn’t a black box; it’s a transparent and evolving platform that you can set up to support your specific vision and future needs. PROS not only gives you full control but also simplicity and instant responsiveness to drive both short- and long-term strategy across pricing, distribution, and eCommerce teams. PROS partners with leading airlines like you to ensure you are proactive, rather than reactive, to the market while empowering your retail and distribution teams to make intelligent business decisions.

The PROS Platform for Travel supports all teams looking to drive revenue and improve the shopping and booking experience.

Meet the Airlines Accelerating Dynamic Offers with PROS

MIDDLE EASTERN AIRLINE

Middle Eastern flag carrier on the path to becoming a digitally savvy retailer

WORLD’S LEADING AVIATION GROUP

Leading group of carriers looking to manage and optimize its direct
distribution network

The Cost of the Status Quo

According to Forrester Research, “the ‘new normal’ will create additional customer interactions and touchpoints — potentially creating more effort for and discomfort to passengers."

Airlines have a unique opportunity to hit reset and reevaluate the end- to-end customer journey to create a flexible shopping and buying experience, with built-in transparency and communicate safety across the board.
To dramatically change the customer experience, it will require the right data and flexible technology to power revenue management, sales, distribution, and digital retail strategies and deliver optimized offers through an optimized customer experience.