Fundamentals of Airline Revenue Management

While unit revenues have become constantly under pressure throughout the entire travel industry in the last decades, revenue management has become an integral and decisive part of a commercial airline organization. Technical and organizational strengths and weaknesses in this field usually directly translate into competitive advantages and disadvantages associated with an immediate rise or decline in the profitability of an airline. In extreme cases, a continuous underinvestment into revenue management systems, approaches, and organizations may even bring an entire company into severe difficulties. Some of the recent airline insolvencies have a least been accelerated to some extent by misaligned processes in revenue management in combination with high manual workloads as a result of little or small investments into modern revenue management solutions. Hence, more than ever before revenue management is a decisive lever for the commercial performance of an airline. Technological innovations and a constant change of airline business models toward selling ancillary services and retailing will further increase the relevance but also the challenges for revenue management professionals.