A mechanism to decide the price of air tickets from "Who wants tickets" is under development

bySuhyeon Choi

Instead of deciding the price of an air ticket only by "search conditions", a method of considering "who is searching" and displaying it is being developed. "It is theoretically possible to display it at a high price to those who are supposed to purchase even if the ticket is raised." How this system is operated,Travel WeeklyIt is communicating.

Airlines inching closer to dynamic pricing: Travel Weekly
http://www.travelweekly.com/Travel-News/Airline-News/Airlines-inching-closer-to-dynamic-pricing

We have customers with major airlines such as Lufthansa and Emirates, and develop and sell revenue management software "PROSAccording to some airlines to price ticketsDynamic pricingIt is said that it incorporates the technique called.

The way of determining the price of an air ticket by dynamic pricing is simply a concept, "The airline identifies the person searching for an airline ticket, and investigates aviation history and decides the price". Technically speaking, Amazon can track the behavior of users after logging out by using cookies for logging, and some technology companies provide tools that can identify users across multiple terminals without login information It is also possible for airlines to recognize users, even from being. Also,OTAOr if you are logged in to an airline account, it will be easier to identify who is seeking tickets. Then, after grasping the user's ticket purchase history with such information, the airline side presents a price different from other users of the same demand according to the user's history.

byAshim D'Silva

However, experts point out that the state that the price of air tickets changes due to fluctuations in demand is not transparent. Many of the technology is said to be used for discount, but in theory it is "to present tickets at cheap prices to new customers" "to those who are likely to purchase tickets even if they raise prices at a high price It is possible to think of how to use "to display". According to Peter Belobaba, head of aviation industry program at Massachusetts Institute of Technology, from the search "One night from New York to Chicago in the middle of the week," the platform is judged to be "user in business" and business It seems to be possible to present a ticket for the trip that matched the traveler.

The introduction of dynamic pricing can show more travelers that "If you pay extra fee, you will be more comfortable", the navigation company can hope for higher conversion rate and higher revenue.

On the other hand, it is said that it is very difficult for the airline company to introduce dynamic pricing on a system basis. From the time when the Law on Elimination of Airways Regulations was abolished in 1978, sales of airline tickets carry out fare data distribution and application for approval of freight for relationship-oriented governmentATPCONow it is done. In this selling system, it is designed to be able to set only a maximum of 26 stages of classes and prices, and generally, airline companies allocate prices tailored to each class to tickets,Cross-selling networkWe will register these data to ATPCO to pass to ATPCO. Airlines can update the price of each class for domestic flights up to four times a day, and can be updated hourly for international flights. However, in fact, many airlines change the price by "changing the class" at any time as it is for a few weeks if the price is set once.

bySTIL

To shift from such price determination method to dynamic pricing, we need to change the sales system or require a hybrid solution.

The hybrid system referred to here means to present the price tailored to the user by the profit management program while filing to ATPCO. For that purpose it is said that it will be necessary to have an interface to communicate GDS and OTA search engines with the airline's own price engine. And, according to Tom Gregorson, Vice President of ATPCO, it is said that pilot project of such interface development has already started, but it has not been realized yet.

On the other hand, there is also a way to not do filing to ATPCO at all. The price of the ticket at this time is generated in real time from zero based on the information "who the purchaser is" based on the nature of the search, the demand of the ticket, and whether the ticket is available. According to PROS, 11 companies already have a way to present tickets for dynamic pricing on their website in real time. At this time, there seems to be a way to adjust the public price in addition to what is generated from the price zero. And dynamic pricing was carried out very carefully, and it was concentrated on only 'group travel' and 'scenes competing with cheap airline'. As a result, John McBride, president of product management at PROS, said conversion rate increased to 50% and increased revenue.