From incremental to exponential – future-proofing airline pricing strategies
Irregular demand patterns weren’t just a flash in the pan during COVID – they are here to stay., It’s clear that the combination of demand signals, geo-political crises, and ever-changing customer profiles cannot continue to be manually computed and analysed by Revenue Management.
For too long, airlines have been restricted in their abilities to strategically price their flights and remain consistently competitive. Existing legacy systems and the limitations of human cognitive capacity have both unnecessarily constrained airlines; until now. Incremental changes that are manually made by revenue management teams will never amount to the capability afforded by AI-driven airline pricing which can supercharge revenue management strategies by moving from incremental improvements to exponential uplifts.
AI-powered pricing targets untapped revenue opportunities
Full pricing control is currently out of reach for airlines today, resulting in a lot of untapped revenue. Flexibility is not a nice to have, its essential. Instead of owning and controlling prices, every airline that files fares with a GDS outsources their pricing strategy to legacy systems that were built over 60+ years ago. Millions of price points are trapped between fare classes, resulting in missed opportunities, missed segments, and missed revenue.
Revenue management teams are a key function for most airlines, these people are entrusted with key pricing decisions across the network. It has become clear that demand signals, historical data, geo-political crises, and various other factors that impact the optimal pricing decision is beyond human cognitive abilities. This real-time decision making is out of reach for airlines today and those airlines not using AI to guide their pricing strategy will always encounter a trade-off between accuracy and speed which results in sub-optimal outcomes.
Move from wanting to winning
At the end of 2021, Datalex surveyed several airlines and found that 92% plan to start an AI powered Pricing initiative in 2022, but just 9% have started, indicating that the market need is there, but many airlines are not moving at the pace they desire. Datalex Pricing AI addresses this market need and facilitates a move from wanting to winning. With Datalex Pricing AI, Datalex has listened to the market and customers, to solve a problem for airlines that is top of their agenda in 2022.
Introducing Datalex Pricing AI
Datalex Pricing AI has been built exclusively for forward-focused airlines who are determined to release themselves from these restrictions that are holding back their competitive edge. Datalex Pricing AI is an intelligent pricing plug-in that learns to think like an airline. By automating complexity and reducing distractions, Datalex Pricing AI thinks exactly like your airline revenue management team except in real-time and at scale, freeing up resources so airlines can remain laser focused on high yield markets.
The market has changed dramatically in the last couple of years and the opportunities that AI-powered pricing presents to airlines is just the tip of the iceberg in terms of revenue opportunities. AI-powered pricing has several characteristics that distinguish it from traditional revenue management processes, including the ability to continuously adjust price at scale across a network and in real time.
From thinking ‘for’ you, to thinking ‘like’ you
With Datalex Pricing AI, we don’t claim to think for airlines, instead the product learns to think like an airline. By automating complexity and reducing distractions, Datalex Pricing AI reduces the reliance on humans to oversee everything, keeping powerful human judgement for high value markets. This means airlines can generate extra additional revenue across markets and free up time by focusing on the highest yielding markets. As Datalex’s VP of Technology & Academy Ryan Estes outlines: “Place your best people on your best performing markets and Pricing AI will take care of the rest.”
Datalex Pricing AI enables multilocation as airline intelligence can be scaled across an airlines’ route network. This facilitates a high cadence of price updates and high reliance on signals to optimise the predictions the data uses. With Datalex Pricing AI, we take care of the heavy-lifting of data ingestion and expensive AI technologies for an airline and provide them with a pricing plug-in that is easy to use, unique to that airline and immediately revenue-generating. Leveraging the latest in machine learning technology and using a market leading reasoning approach and neural networks that thinks like your airline, Datalex Pricing AI supercharges pricing strategies.
AI-powered pricing is the single biggest opportunity for airlines
Kenny Jacobs, founder of H&H Consulting and former CMO of Ryanair recently commented on the long-term benefit that AI-powered pricing will have on the industry at a recent live Q&A with Datalex. “Every airline will have a bumper summer this year. From October onwards is when you can use it and prove that AI pricing works.” AI-powered pricing shows its worth by optimising pricing at every moment, all year round rather than just during typical market peak times. He highlighted how AI pricing is the way forward for airlines who want to optimise total revenue all year round using smart, intelligent and real-time tools.
Datalex is leading the charge for a future of RBD-less pricing with Datalex Pricing AI, our AI-powered pricing plug-in that learns to think like an airline and will supercharge revenue management strategies, moving from incremental improvements to exponential uplifts. Datalex are leaders in transforming airline retail, and Datalex Pricing AI is already transforming how airlines will price for years to come.