from http://www.eyefortravel.com/index.asp?news=48856 Interview with Christophe Ritter, Sabre Airline Solutions What major trends have you witnessed this year as far as revenue management is concerned? - (11/28/2005) There are several. Firstly we have seen a huge swing towards dynamic pricing and customer choice, as airlines and intermediaries rush to offer customers ever greater control over their travel planning and itineraries. Secondly, interest in the concept of value-based pricing has become very keen as traditional carriers start to compete more effectively with the no-frill carriers on key routes across Europe. This concept gives the passenger even more control over what he or she is prepared to pay for. Airlines like the idea of offering a very low fare for seat only, and then charging for everything else on top of that. You want a meal on your flight? Fine ? pay for it. You want an aisle seat? Fine ? pay for it. The third major trend has been significant simplification of fares, particularly over structure and rules. It?s been an exciting time for us as we have been using Sabre Holdings? strong ownership interest in every channel of travel distribution to help our airline customers better research and understand how these trends are affecting the fares environment in specific target markets. Of course we have also been applying existing Sabre Airline Solutions products, or developing new ones, to help airlines deal with, and take advantage of, these three major trends. What kind of changes have you witnessed from revenue management perspective? How have these changes thrown new challenges? How have you coped up with them? If you define revenue management as a mix of pricing and inventory management, then the weight of the pricing function is greater than that of inventory management. Just five years ago the situation was reversed. The major challenge this presents is that the speed of decision-making is greater than ever before because in the pricing function you?re dealing with a very dynamic component, and one which is exceeding exposed to consumer variables. As people start to book with airlines direct, the actual fare becomes much more visible, and more of a deciding factor in the traveller?s ultimate purchase. This means the fares environment has become much more fluid and highly competitive. A good revenue management product will allow the airline space to breathe, and plan, in this difficult environment. Our challenge, therefore, is to keep adapting our products to help our airline customers keep good sight of the market and to ensure they remain ahead of the game. Finally, we have added value in this environment through our Consulting organisation. Through this unique aspect of Sabre Airline Solutions? business we have been able to help airlines understand, and implement, current industry best practice in the field of revenue management. How can you quantify the overall value and benefits of revenue management in an organisation? One of the best Key Performance Indicators involves simulating an airline?s evolution in terms of yield. If you increase capacity, your average fare generally goes down. Good revenue management will help you minimise the impact of change in capacity on yield. Sabre Airline Solutions? revenue management tools will help an airline achieve this. And our Consulting organisation will help an airline put the theory into practice. How has your dealing with clients changed this year or in the recent past? How has the approach of clients changed? It?s true to say that the airline industry is now a much more competitive environment in the past. This means that airlines are keen to explore operational or decision-support products that will give them an edge. And it?s not a marginal edge, either. We have saved Air One 40 percent of its IT communication charges, and boosted the bottom line of a large Middle Eastern carrier by more than $20 million this year alone. That said, our customers are now extremely focused on value pricing. The more we can bring to their businesses, the more they?re prepared to pay us. With some clients we are working on a pure risk/reward basis, and this is one reason why our Consulting organisation gives us such an edge. How does price effect conversion rates and how can this data be used to assess the performance of revenue management? Price and conversion rates relate to fare imbalances between countries for the same origin-destination. Airlines want to increase their revenue and are looking for any tool that will enable presentation of all possible inventory to eliminate lost sales. But, at the same time, they need to enhance their revenue management and inventory control capabilities. To fill every seat on every plane with the highest possible yield, airlines should use point of sales information. SabreSonic Inventory is our industry-leading solution that allows airlines to increase yield premiums through the use of advanced revenue management techniques and sophisticated inventory controls. How is revenue management evolving with modern distribution? Firstly, channel pricing is becoming much more prevalent. An airline?s fare structure will vary according to the channels it is using to distribute and sell those fares; for example, through the travel agency channel, or via its own website. There is also specific inventory management for each fare structure. In short, while fare structure and rules are becoming simpler, revenue management is becoming much more complicated, technical and dynamic. --------------------------------- Yahoo! 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