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Unlocking the value from origin and destination revenue management

Author

Listed:
  • Sumala Tirumalachetty

    (Sabre Airline Solutions)

  • Vamsidhar Kodam

    (R&D Emirates Group)

  • Goda Doreswamy

    (Sabre Airline Solutions)

  • Mukund Shankar

    (R&D Emirates Group)

Abstract

“O&D RM provides incremental revenue benefits compared to Leg RM” – the statement has been proven through many simulation studies and many airlines have implemented and reported the benefits from O&D RM. The key value driver of this benefit is the network optimization model that uses O&D forecasts and market representative fares to do effective trade-offs. There are a multitude of factors that are at play in ensuring the proposed benefits from O&D RM are materialized. Some of the key challenges that airlines face today are the complexity of forecast management, maintaining accurate fares for optimization, and using advanced availability processors to achieve this goal. The other major challenge is the big organizational change from Leg mode to O&D mode among the managers and RM analysts. Additionally, distribution aspects such as seamless availability, married segments, and journey controls also play an important role in effectively reaping the benefits of O&D RM. In this study, we leverage APOS (Airline Planning and Operations Simulator) of Sabre and analyze how each of these factors impacts the O&D RM value across different load factors and flow traffic levels.

Suggested Citation

  • Sumala Tirumalachetty & Vamsidhar Kodam & Goda Doreswamy & Mukund Shankar, 2017. "Unlocking the value from origin and destination revenue management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(6), pages 607-620, December.
    • Handle: RePEc:pal:jorapm:v:16:y:2017:i:6:d:10.1057_s41272-017-0101-5
    DOI: 10.1057/s41272-017-0101-5
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    Cited by:

    1. Landie Qiu, 2021. "Zero displacement cost model: a simplified RM model for post-COVID-19 O&D management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(1), pages 21-32, February.

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