5 Takeaways from Airline Revenue Management Experts on AI

June 6, 2019 Aditi Mehta

Webinar Recap | AI: No Longer Just a Buzzword for Airline Growth

 
Webinar participants: Justin Jander, Head of Revenue Management and Justin Silver, Sr. Scientist at PROS participated in a Phocuswire webinar with Lucio Bustillo, Manager of Revenue Management Science & Innovation at Air Canada.
 
In a Phocuswire webinar, Justin Jander, Justin Silver and Lucio Bustillo dispelled the myth that AI is just a marketing buzzword. Instead, airlines around the world are implementing real-life AI applications to drive value in their business. 
 
We’ve boiled down our top 5 takeaways from the discussion and highlighted some of the questions we received after the webinar. 
  1. While there is a lot of buzz around AI recently, AI has been around for a long time. What’s changed recently is the amount of data airlines are collecting and the scalability of computing that data. Regardless of the application of the technology, the key component of AI is a learning loop to drive value.
  2. The Travel industry is using AI to personalize offers and create a better customer experience. Airlines have the opportunity to use AI to learn about the behavior of passengers, see how it changes over time, and then create offers that make the most sense. But, airline applications for AI go far beyond customer experience. Airlines can also leverage AI in operations and revenue management
  3. For airline revenue management, the goal is to accurately predict who will show up to buy a ticket and what the passenger is willing to pay if they do show up. With AI, airlines can more accurately forecast this while automating processes around data crunching and adjustments. This enables analysts at airlines to focus on other, value driving tasks.
  4. Revenue management really couldn’t be done without science or AI! Airline seats are perishable goods, there is fixed capacity in the short term, volatile demand, and very seasonal demand. Science allows airlines to manage those factors to stay in business and offer its products to so many passengers. 
  5. To successfully apply AI, airlines have to build a proper roadmap. In the short term, airlines are looking for quick wins that could be enhanced by technology. In the long term, it’s about reengineering or retooling the core processes of a company. This requires a lot of change.
Eager to learn some more? Watch the full webinar or read the transcript.
Pro tip: If you can’t watch webinar, don’t let that deter you. Give it a listen – the conversation flows very much like a podcast.
 
Bonus Q&A
During the webinar we had some great questions come in that the team could not get to. We’ve highlighted the answers below:
 
What challenges/opportunities do you see with scaling airlines revenue management focusing on the user profile across the distribution channels (e.g. GDS, aggregators)?  With regards to business travel, how does corporate policy play into personalization?
 
Answer: 
Q1: The distribution channel question can present some challenges given the restrictions that some channels have.  However, the channels also offer potentially more information.  The real opportunity comes from being able to leverage the information well and being able to create the right price for the passenger.
 
Q2: This would need to become an attribute of the passenger, understanding their channel.  Meaning if it is a corporate travel agency, can we understand the buying behavior differently?
 
What are your thoughts on Conversational AI for airlines and the evolution roadmap in context of today's webinar topic? 
 
There are a lot of options in this area as well. If passengers interact with ChatBots more and more, then there is greater opportunity for an airline to provide valuable interactions to enhance the buying experience and personalize end to end experience from inspiration, shopping, booking, and post-booking. 
 
Are you using simple linear models or complex models more often?
 
The models used vary based on the application. It is all about what makes the most sense for the business application and the data available.
 
Do we think that AI can play a role in bridging the gap between Revenue Optimization and Airline Distribution Strategies to create a win-win situation for both airline and end customer?
 
Yes, this is exactly one of the ways we see this. Taking the answer from RM and using the distribution more effectively will only make the answer provided by RM better.
 
When collecting the data, seems like a large part of the data is more passive data we are collecting in the background (implicit data around history or behavior but also explicit based perhaps on search, filter inputs, etc.). Do you explore and use any data where there is more of an obvious dialogue with the user (e.g., in the form of asking questions, chat, setting up a profile)? If so, can you give us an example? How useful is it?
 
Customers generally do not appreciate active interruptions to their visit around websites. However, a rigorous randomized A/B testing can provide useful data on user reaction to different website flows, layouts/color schemes and types of content based on fluctuation on the conversion rate, session interrupt and navigation patterns. Similar testing can be performed on email & sales campaigns. 
 
Any direct user feedback can be requested during or after the experience should the user agree. Fruitful applications of this can include testing website design/layout preferences and measuring the “intuitiveness” of navigations across specific screens. In terms of personal experience, I have seen websites being able to ask “is there something I can do to help?” when a sell page is not being clicked on.

About the Author

Aditi Mehta

Aditi Mehta serves as Solution Strategy Director for PROS Airline industry and solutions. As an experienced product and digital marketer for the Travel industry, Aditi is passionate about the technology and ideas transforming the industry today.

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