Dynamic Fare Adjustments and Dynamic Fare Generation. Presented by Tom Gregorson

Transcription

1 Dynamic Fare Adjustments and Dynamic Fare Generation Presented by Tom Gregorson

2 Method 4: Dynamic Fare Adjustments or Fare Generation $ Price Value D QTY 2

3 Method 4: Dynamic Fare Adjustments or Fare Generation $ Fare Adjustments: Automated evaluation of requested flights based on system algorithms and adjusting the actual fare level offered to the passenger Price D Adjusted Fares QTY 3

4 Method 4: Dynamic Fare Adjustments or Fare Generation $ Fare Adjustments: Automated evaluation of requested flights based on system algorithms and adjusting the actual fare level offered to the passenger Price Value D Adjusted Fares QTY 4

5 Method 4: Dynamic Fare Adjustments or Fare Generation $ Price Dynamic Fare Generation: No airline filed fares Price Dynamically determined D QTY 5

6 Method 4: Dynamic Fare Adjustments or Fare Generation $ Dynamic Fare Generation: No airline filed fares Price Price Dynamically determined Value D QTY 6

7 Survey Results 7

8 Three Ways It Could Work Dynamic Adjustments 1. Dynamic adjustment of the fare (Fare By Rule) 2. Dynamic adjustment of availability (DynA) Dynamic Fare Generation 3. System determines the price based on Willingness To Pay (WTP) A. Reactive: name your price B. Proactive: proposed deal just for you 8

9 1. Dynamic Adjustment of the Fare Airline publishes six fares with an assigned booking code Price Points (Fares) Y Booking Codes B M Q V 9 9

10 1. Dynamic Adjustment of the Fare Airlines publishes discount business rules that adjust the published price based on criteria determined Select passengers (Frequent Flyer, Accounts, Promotion codes, Point of Sale, etc.) get 10% off the fare Price Points (Fares) Y B M Q V Booking Codes 10 10

11 1. Dynamic Adjustment of the Fare Price Points (Fares) Y B M Q V Booking Codes Shopping Request Offer Management/ Pricing System Airline Inventory Services & Brands Personalization

12 1. Dynamic Adjustment of the Fare Price Points (Fares) Y Booking Codes Am I a select passenger? B M Q V Shopping Request Offer Management/ Pricing System Airline Inventory Services & Brands Personalization 12

13 Fare By Rule Airline specifies where it applies and to whom it applies (Record 8) Airline specifies which fares can be altered (Table 989) Airline specifies the market, passenger, and number of flights that qualify for an adjustment calculation (Cat 25) Airline specifies the resulting rules and booking requirements for the adjusted fare 13 13

14 14 14

15 15 15

16 Fare By Rule Gaps Calculation methods Improved safeguards Public FBR FBR on FBR 16

17 2. Dynamic Adjustment of Availability Airline publishes six fares with an assigned booking code Price Points (Fares) Y B M Q V Booking Codes 17

18 2. Dynamic Adjustment of Availability Airline establishes availability adjustment business rule $ Price Select passengers (Frequent Flyer, Accounts, Promotion codes, Point of Sale, etc.) get one lower class more availability. D Price Points (Fares) Y B M Q V Booking Codes QTY 18 18

19 2. Dynamic Adjustment of Availability Price Points (Fares) Y B M Q V Booking Codes Shopping Request Airline Inventory Open Classes Y B Offer Management/ Pricing System M Q V 19

20 2. Dynamic Adjustment of Availability Price Points (Fares) Y Booking Codes Am I a select passenger? B M Q V Shopping Request Airline Inventory Open Classes Y B Offer Management/ Pricing System M Q V 20

21 Dynamic Fare Adjustment Model? 21

22 Dynamic Fare Generation Airline Fare Levels & Business Rules Shopping Request Offer Management /Pricing System Airline Inventory Services & Brands Personalization 22

23 Dynamic Fare Generation Type A I will pay you for this flight Airline Inventory Your offer was /was not accepted Offer Management /Pricing System 23

24 Dynamic Fare Generation Type B How much to fly to Fargo? Airline Inventory I will offer you this flight for Offer Management /Pricing System 24

25 Challenges today Practical considerations Consumer expectations of price boundaries Price differences between products Demand stimulation Competitive offers Technical challenges Distribution RBDs Segmentation/Pricing Rules Interline Tax Regulatory Concerns moving to a pure dynamic model Creates more discounts, dilutes airline revenues Large investment made in pricing and RM systems how to change 25

26 Technical Challenges: Possible Solutions Technical challenges Distribution RBDs Segmentation/Pricing Rules Interline Tax Regulatory Possible solutions Message Hub Response with price and booking class Fares for each segment by range? Set prices for interline (Base Amounts) Applied after dynamic calculation? Publication of formula, ranges, or max price? 26