Revenue Management Essentials Product Guide

Market Situation

For the past five years, more than ever, airlines have been facing unrelenting complexity. Government restrictions, extreme fluctuations in demand, and highly competitive markets make it difficult for revenue management leaders to be confident in their business decisions to drive revenue and operational efficiency.

For low-cost, leg, or segment-based carriers or smaller airlines navigating hyper-competitive markets, the situation has been even more pressing. In order to solve this complexity, these airlines are looking for proven, dependable technology that allows revenue management teams to react quickly to disruptive market events like pandemics, market closers, competition, and changes in demand.

Current industry dynamics have forced airlines to do more with fewer resources than before, leading airlines to eliminate redundancies and dependencies on inflexible systems while driving collaboration between functional areas like distribution, sales, digital, and marketing. Additionally, with many complicated inputs such as capacity, scheduling, and competitor movements, airlines need a robust revenue management system to keep up, even if historical data isn’t always available. With the right technology, backed by repeated time to value, science, and best-in-class user experience, revenue management leaders can reduce costs while driving revenue across the business, increasing operations efficiency and productivity.

Business Challenges

The Solution

PROS Revenue Management is the most comprehensive, industry-leading revenue management solution for airlines.

PROS Revenue Management editions were built with scalability in mind. Revenue Management Essentials (RM Essentials), an edition within PROS Revenue Management, is a leg forecasting and optimization system for airlines with little connecting traffic or those that want to account for connections without added management of origin and destination level forecasts. RM Essentials is a single system for all data, influences, and decision support that RM managers need to compete successfully in their markets.

RM Essentials is built on a robust set of capabilities including streamlined workflows and user experience developed on industry best practices. The workflows help to drive efficiencies and allow analysts to quickly drill down on their markets, identify solutions, and then focus on other revenue-driving initiatives. Additionally, when historical data is an issue, airlines can rest assured by a comprehensive set of business rules and adjustments that adapt to specific business strategies.

RM Essentials is a repeatedly proven solution, driving increased productivity and revenue for airlines around the world, regardless of their business model and size. As a SaaS-based solution, RM Essentials is scalable and allows airlines to transition smoothly from one PROS edition to the next as the business grows.

Benefits of PROS RM Essentials

How RM Essentials Works: Key Capabilities for Maximized Revenue and Productivity

Advanced Forecast Methodology

RM Essentials employs a Bayesian Forecast methodology, which models demand throughout the booking cycle during ranges of days prior. Information is shared across those periods so that the impact of what happens early in the booking cycle can be shared with the periods later before the flight has departed.

The methodology is an intuitive process that learns over time and can learn quickly, which helps the airline maintain accurate forecasts in a rapidly changing environment. Separate forecasts for bookings and cancellations are created to pick up on trends that may develop in booking or cancellation rates, which may be hidden in a net rate. The forecast process for holidays and special events not only models the behavior of past events but also incorporates recent trends.

When Historical Data Isn’t There

Whether an airline is a start-up or concerned about noisy historical data, RM Essentials provides a comprehensive set of tools to provide actionable insights and forecasting based on business rules. With Demand Sponsorship: RM Essentials provides a flexible selection of target and source market dimensions. This allows airlines to quickly begin to reap the value of a revenue management solution while remaining flexible to adopt business strategies into system rules as the marketplace continues to shift. And as historical data for the airline builds, RM Essentials is available to grow into a fully science-based solution driving additional incremental revenue.

Network Add-On

RM Essentials includes an option for a Network Add-On. The Network Add-On uses future pricing and historical revenue accounting data to perform a network optimization. This helps the airline incorporate network value into the revenue management process, even if O&D controls are not used. Through the network optimization process, it determines displacement costs for each leg and calculates ‘pseudo fares’ for input into the leg optimization process that accounts for network value.

Forecast Alerts

RM Essentials includes customizable alerts with up to 27 selective and different measures and conditions. This allows demand analysts to quickly identify potential over and under forecasting when bookings are not performing in line with expectations. In the case of extreme demand fluctuations, analysts can take quick actions based on alerts to improve the forecast accuracy.

Flight Calendar

With a flexible, colorful calendar view, analysts can quickly and clearly view both the aggregation and disaggregation of inventory controls. Analysts can view their markets including, historical, current, and future inventory capacities, bookings, and load factors to understand conditions and create better inventory strategies.

Customizable Optimization Alerts

With up to 66 different and selective measures and conditions, customizable inventory notifications can alert flight analysts to unexpected inventory situations to avoid revenue dilution and improve the market-flight revenue.
Examples of alerts include excessive no-shows, high overbooking flights, excess demand flights, and questionable open and closed classes.

Intuitive Workflows

RM Essentials is built upon deep user research with analysts across the industry, resulting in modern, intuitive workflows designed for flexibility and efficient decision-making. Analysts can quickly drill down to their markets, analyze data through different screens, and edit influences with a click of a few buttons.

Power Your Revenue Management with Real-Time Dynamic Pricing

PROS Revenue Management drives even greater value for an airline when combined with PROS Real-Time Dynamic Pricing. PROS Real-Time Dynamic Pricing (RTDP) allows airlines to control and deliver accurate, flexible real-time offers across all the channels they distribute. Airlines can better manage increasing search volumes and rising look-to-book ratios. Additionally, with PROS RTDP, revenue management teams can better control revenue leaks, eliminate dependencies on real-time inventory data feeds, and reduce sell discrepancies or inventory spoilage, resulting in greater revenue and efficiency for the airline.

Designed to dynamically manage availability, airlines can also increase bookability with accurate availability from and to partners, including JV or interline relationships. PROS RTDP includes many commercial strategies to customize availability based on aspects of passenger, itinerary, and flight conditions. Using RTDP, the Customer’s rules and strategies are kept confidential within RTDP and no longer need to be shared with distribution partners.
RTDP enables the Customer to have more control of the distribution both from business and technological aspects.

STRATEGIC AVAILABILITY

COMPETITIVE STRATEGIES

• Match rival carriers in competitive markets by applying revenue management principles alongside informed decisions through the workflow

REVENUE PROTECTION

• Protect revenue using third-party tools as well as enabling the use of data to prevent certain abuse scenarios

SCALABILITY AND ANALYTICS

REAL-TIME PARTNER AVAILABILITY

• Real-time evaluation of the availability and/or sell request by the operating airline on a free-flow codeshare marketing flight.

What Makes PROS Revenue Management Different

AI-based forecasting using Bayesian hierarchal forecasting techniques that learn quickly and adapt to a rapidly changing environment.

Level of forecasting detail based on true inventory-based leg segment forecast, bookings, and cancellations forecast and a blended forecast to capture trends that would be missed in a net forecast.

Comprehensive user-influence features at the leg/ segment O&D, flight path, class, departure date, and DCP level warning of conflicting influences.

Fare Valuation using pricing and revenue accounting data to produce forward-looking passenger value estimates by O&D, booking class, point-of-sale, departure and selling date ranges.

A RM system with a user-centric design and intuitive navigation. To drive maximized adoption and utilization among RM users, the UI/UX is continuously improved with the help of surveys, usability testing and customer conversations.

Business Outcomes You Can Expect

What makes PROS Revenue Management Unique:

Revenue Management Editions

PROS Revenue Management maximizes revenue across every market, backed by proven, industry-leading science and delivering a rich set of capabilities and automated workflows. Whether you are a low-cost carrier looking to automate processes an airline wanting to make business decisions based on AI and machine learning, PROS Airline Revenue Management is available in a variety of editions based on your specific needs.

Depending on your current and future needs, the solution is available for purchase in the three editions below:

AVAILABLE INTEGRATIONS

PROS CLOUD