The World Aviation Festival brought together aviation industry leaders, innovators, and experts from around the globe. Our company, Faretrack, had the privilege of participating and connecting with numerous interesting people, prospects, customers, and even competitors. Among the wealth of information and discussions, three key trends emerged that are set to transform the air travel industry.
Trend 1: Measuring Customer Willingness to Pay for Ancillary Products
In the dynamic world of airline revenue management, understanding customer preferences and willingness to pay for various products has become a pivotal focus. Ancillary revenues, which encompass services like extra baggage, seat selection, meals, and more, are no longer just supplementary to base flight fares. These ancillary attributes have distinct value associated with them.
To optimize revenue, airlines are now digging deeper into customer segmentation. The key here is to unbundle the prices from ancillary attributes, thereby comprehending the genuine value of each product offered. By doing so, airlines can accurately measure customer willingness to pay for not only the base flight but also the additional services they offer. This allows them to assign appropriate pricing that reflects the perceived value of these services to individual customers.
Benchmarking these ancillary attributes equally becomes crucial. It means comparing the value of, say, extra legroom seats to in-flight Wi-Fi, ensuring that pricing strategies are fair and competitive across the entire range of ancillary offerings. This data-driven approach is a fundamental shift in how airlines approach revenue management.
It is worth mentioning FareTrack offers a unique solution that aligns perfectly with this trend. Our proprietary method, powered by advanced machine learning and deep scraping technology, provides airlines with the ability to unbundle ancillary revenue and assign a specific value to each component, treating them as distinct products.
By leveraging our advanced tools and techniques, airlines gain valuable insights into customer preferences and willingness to pay for ancillary services. This allowsthem to create pricing strategies that accurately reflect the perceived value of each product, ensuring fair and competitive pricing across their entire ancillary offerings. FareTrack’s data-driven approach revolutionizes 3rd party data for the airline revenue management.
Trend 2: Personalized Pricing for Enhanced Customer Experience
Building on the ability to unbundle ancillary products from base flight fares, airlines are now equipped to measure customer willingness to pay at a granular, personal level. This new capability means airlines canoffer customers the best possible prices for the specific products they need, precisely when they need them.
Imagine a scenario where a passenger values an aisle seat, extra baggage, and Wi-Fi differently from another passenger who prioritizes a window seat, a meal, and priority boarding. Airlines can now cater to these individual preferences and price their offerings accordingly. This level of personalization not only enhances the customer experience but also improves revenue optimization by tailoring prices to each passenger’s unique requirements.
By leveraging the data gathered from trend 1, airlines can create more targeted and attractive offers, thereby increasing customer satisfaction and loyalty.
In the era of personalized pricing and customer-centric strategies, FareTrack remains at the forefront of innovation. Our powerful data scraping capabilities, coupled with our NDC distribution landscape insights, provide airlines with a comprehensive view of the market. We offer unrivaled access to unbundled product pricing information from a diverse array of sources.
This means that airlines can rely on FareTrack to equip them with the tools they need to offer the best quality of continuous prices to customers based on their specific preferences and needs.
Trend 3: Evolution of Airline Distribution through NDC
The modernization of airline distribution, through New Distribution Capability (NDC) and Application Programming Interfaces (API), has opened up new cost savings and revenue opportunities for airlines. Historically, airlines heavily relied on Global Distribution Systems (GDSs) for content distribution, but NDC/API has revolutionized this landscape.
Airlines like American Airlines have evolved their commercial models by shifting a significant portion of their content away from GDSs to web channels. This strategic move not only reduces distribution costs but also opens up exciting new possibilities for selling. It represents the convergence of classic revenue management with e-commerce management.
Now, airlines have more control over their product distribution, pricing, and promotions. They can dynamically adjust prices not only to maximize flight load factors but also to optimize website clicks and conversion rates. By harnessing the power of NDC/API and taking control of their distribution channels, airlines can offer a more seamless and personalized booking experience to customers. This shift represents a fundamental transformation in how airlines engage with passengers and drive revenue growth in an evolving market.
As the airline distribution landscape evolves with NDC/API, FareTrack is navigating this transformation. We combine fare intelligence with web positioning and presence analysis to provide airlines with a holistic understanding of the relationship between fare levels and click-through rates.
With FareTrack, airlines can optimize their distribution channels and pricing strategies by making data-driven decisions. Through the insights we offer, airlines can efficiently manage their online presence and position themselves strategically in the digital marketplace. This results in increased website clicks, improved conversion rates, and enhanced revenue growth.
These trends collectively illustrate the airline industry’s ongoing journey toward greater personalization, efficiency, and revenue optimization. By understanding and leveraging customer willingness to pay, unbundling ancillary products, and embracing modern distribution strategies, airlines are positioning themselves to thrive in an increasingly competitive and customer-centric market.
FareTrack’s solutions are tailor-made to address the challenges presented by these industry trends. We provide airlines with the tools and insights they need to unbundle ancillary products, personalize pricing, and navigate the evolving distribution landscape. As airlines strive to deliver a more customer-centric experience and optimize their revenue strategies, FareTrack is your trusted partner in achieving these goals.