Evolving RM & Pricing Today for the Offers & Orders Era

I’m joined by a great panel today where we’re going to have a lot of really good discussion. First, I’m Justin Jander. I lead our product management team for our offer optimization solutions at PROS. I’ll go ahead and let the other panelists introduce themselves. 

Esteban, why don’t you start off with your introduction? 

Thank you, Justin. I’m Esteban Ruio. I’m part of Avianca RM teams. I work as an innovation manager. I’ve been in the industry for eight years now. I’m very happy to share with you all our learnings in this amazing process. Thank you. 

Thank you, Esteban. Santiago, do you want to go next? 

Of course. Good morning to everyone. Thank you, Justin. Hi, Suzanne. Hi, Esteban. Well, I am Santiago Duque. Thanks for having me. I’m part of the innovation revenue management team as well at Avianca, where we work with our systems on pricing optimization. I’m very excited to be here and to share with you some of our recent experience. Thank you. 

Thank you, Santiago. And Suzanne? 

Yes, hello everyone. I’m assuming that we have airlines from all over the world, and it’s really great to be here with you all. My name is Suzanne Grimes. I lead our strategic consulting team at PROS, and I’ve had the privilege of working at PROS as well as in the airline industry now for about twenty-two years. So great to be here with you all. 

Thank you, Suzanne, and thank you all of you for joining, and thanks to the audience for joining. We’re really excited to have you and excited to cover some really great topics today. 

What you’ll find today is that we’re going to cover both from the technology perspective and from the people and business perspective. We’re going to have both the perspective from Suzanne and me from the PROS side, and then, of course, get the airline experience from Santiago and Esteban. So we really want to make this well-rounded. 

There is a Q&A opportunity as well at the end. If you have your questions, there is a place to put those inside of the GoToWebinar prompt. Feel free to submit your questions there. If we don’t get to all of the questions, we can follow up with those after the presentation. 

So again, thank you for joining. Where we’re going to start today is really thinking about what revenue management is today and how we move into what that needs to be in the future. 

One of the things you’ll hear throughout the presentation today and the discussion is the word “dynamic.” That’s really what we’re thinking about. The world today requires us to be a lot more dynamic. With everything going on, the reaction time of the systems has to be faster, and the way that we’re approaching revenue management needs to be more dynamic in how we execute. 

Also today, there’s a bit of a disconnect. You have a really isolated revenue management process that moves into a pricing process that then determines what the offer is for the passenger. When we think about modern airline retailing, we want to bring that all together into a more unified approach when we think about revenue management of the future and into offer optimization. 

So let’s dive right in. 

When we think about it, we’re going to first start from the technology perspective. Today, you often still hear that revenue management departments are called inventory management teams or inventory systems. We want to move away from that because inventory has this connotation of deciding how many seats to open or close in certain classes. 

It’s really centered on the idea of how many seats in each class do I want to have open. And as you can hear, that’s centered around the class concept. The mentality is around the number of seats at each class. Of course, there’s a price associated with that class, but we’re focused on seat counts. 

To modernize, we have to break out of that concept of class codes and the limitations they provide. This doesn’t mean we completely remove filed fares in execution, but from the revenue management side, we need analysts to think about things as an economics problem rather than a class-based problem. 

So I’ll hand it over to Avianca. How are you approaching the RM innovation problem, and how does elasticity-based forecasting change your approach? 

That’s a good question, Justin. 

If we look at traditional revenue management or what the airline industry has been doing for the last forty or fifty years, it has been incredibly successful. However, it’s fundamentally built around fare classes, which creates a structural limitation. It assumes that demand behaves in steps and that passengers only have a limited set of price points they are willing to pay. 

But the reality is that willingness to pay is continuous and dynamic. 

So systems and teams need to move toward that. It’s not a one-click solution; it’s a journey. At Avianca, we’ve started evolving beyond static logic. We are moving toward an elasticity-based approach powered by willingness to pay from PROS. 

Instead of asking which class should be open or closed, we are now asking what is the right price for this type of customer in this context at this moment. That fundamentally changes how we think about revenue management. We move from managing inventory to managing willingness to pay. 

Of course, I agree. This has been a big shift for us. We are seeing very good results after implementing willingness to pay. Previously, we forecasted demand volume by class. Now we forecast price elasticity to ensure we offer the correct price that the customer is willing to pay. 

This is the direction the industry is heading. From our experience, decision-making must be scalable and data-driven, based on willingness to pay. 

Thank you both for sharing your insights. 

Justin did a great job setting the stage for how RM is evolving—from controlling inventory to understanding demand value with elasticity. But I’d like to shift to the people perspective. 

Moving beyond class-based RM isn’t just about technology—it’s also about people. It changes how teams operate, how decisions are made, and how much confidence teams have in the system. 

Esteban and Santiago, when Avianca began moving away from traditional class-based controls, how did you balance innovation with operational stability? 

Thank you, Suzanne. You’re right, the transformation goes far beyond technology. We see it as people first, then processes, and finally technology. 

Traditionally, teams focused on tactical execution—monitoring bookings, opening and closing classes, and reacting to market changes. With modern RM, the system becomes more active, and the analyst’s role becomes more strategic. 

We’re shifting from manual control to intelligent supervision. We are not removing analysts—we are elevating their role. 

I agree. We’ve seen a clear change in daily workflows. Analysts are reducing manual tasks and focusing more on strategy. But we need to build trust in the system. Without trust, we won’t achieve the expected results. 

So change is always hard, right? But once everyone understood the logic and how much sense willingness to pay makes, everyone started to adopt it, and it went very well in the end. 

So that’s really cool. Thank you for sharing. 

Just one last thing to add—I think, as I mentioned before, it’s not just about technology. It’s far beyond that. It’s about people and the processes they follow every day. These changes impact RM strategies and pricing optimization. So each airline needs to support this transformation with training and daily workflows centered on the new approach. 

I think that’s consistent with what we’ve heard from other airlines as well. Analysts are very good at what they do. They know their markets, they know how to manage inventory, and they’ve been doing it for years. So when you introduce something like willingness to pay, you’re not telling them they were wrong—you’re saying we can help them be more right with better data. 

You’re also changing what they focus on. Previously, they looked at bookings and patterns. Now they need to think about elasticity—how demand reacts to price changes. That’s a shift toward an economics mindset, which can be challenging. 

So you’ve probably spent a lot of time helping analysts understand and work with these new concepts. 

Yes, exactly. We implemented a large change management project. We used newsletters, contests, training sessions, and willingness-to-pay labs. We also created short videos and worked closely with the PROS team. It required a lot of effort, but we tried to make it engaging and tailored to our analysts. 

At the end of the day, it’s about understanding your team—what motivates them, where they struggle, and how to help them adopt the system effectively. 

That makes a lot of sense. You can’t just hand someone a system and expect them to use it effectively. You have to bring them along in the process. 

And once they see results, they start to trust the system. If they don’t see results, they won’t believe in it. But once they do, they start saying, “This makes sense,” and they engage more deeply. 

So once you have those results from willingness to pay, the next step is execution—how do you apply those insights in the real world? That leads us to dynamic availability. 

An economist might go straight to dynamic pricing, but in the airline world, availability is still critical. Not every airline is ready for full dynamic pricing yet. 

Dynamic availability means adjusting availability based on willingness to pay—by departure date, time, and other factors. It requires systems that can handle this level of complexity. 

One of the biggest challenges in the industry is the disconnect between optimization and execution. You might have the optimal decision from RM, but if pricing systems can’t reflect it, the value is lost. 

So we built an execution layer and aligned RM and pricing teams. They now work together more closely to ensure that what RM decides is actually reflected in the market. 

Even so, we still have constraints from legacy systems. We’re working within those limitations while aligning pricing and RM strategies as closely as possible. 

Exactly. Even if you have a great RM strategy, if execution is constrained by legacy systems, you won’t fully realize the value. Alignment across systems is critical. 

And we’ve also seen that stronger alignment makes us more competitive and more precise in pricing. 

Another important point is that RM teams now need to understand how pricing is executed downstream, including in shopping engines and distribution systems. These can override RM strategies if not aligned properly. 

So RM teams are becoming more connected with distribution and execution layers. 

And as you mentioned, bringing RM and pricing teams together is key. They can’t operate in silos anymore. 

Exactly. The value of modern RM is only realized if it’s executed properly. It’s not just about forecasting—it’s about delivering the right price to the customer. 

And customers don’t shop by fare classes—they shop by value. 

That’s why continuous pricing is so important. But it’s often misunderstood. It’s not just removing fare classes—it requires strong data, forecasting, and understanding of markets. 

We had to go back to basics—ensuring good forecasts, understanding markets, and improving data quality. Because if you input poor data, you’ll get poor results. 

We also needed tools for real-time adjustments, since markets move faster than systems can sometimes adapt. 

So it’s not just pricing—it’s a complete transformation of commercial logic. 

Exactly. RM is now working closely with pricing, and eventually with digital, distribution, and other teams. The goal is to optimize the full customer offer. 

And that includes ancillaries. Ancillaries represent a significant portion of airline revenue, but pricing is often still static. 

So moving to dynamic pricing for ancillaries is a big opportunity. 

We’re starting with simpler steps, like A/B testing and market-based adjustments, and gradually moving toward full offer optimization. 

But again, this requires data, integration, and change management. 

Yes, and it’s important to just start. Don’t wait for the perfect system. There’s revenue being left on the table by not taking action. 

Exactly. Even small steps can drive value. 

And in our case, we’ve already seen benefits like better price-demand alignment, more precise pricing, and faster responses to market changes. 

Even with external challenges like geopolitical shifts, the system helps us adapt more effectively. 

And importantly, we’re not reverting back to old methods—we’re continuing forward with the new approach. 

That’s key. You have to trust the system even in uncertain times. 

Absolutely. 

So to wrap up, this journey starts with strengthening the RM foundation, then improving pricing execution, and finally expanding to full offer optimization. 

It’s not easy, but it’s worth it. 

For airlines just starting, the advice is simple: 
Start now. Focus on fundamentals. Invest in change management. Build trust in the system. And take it step by step. 

Don’t wait for perfection—progress is what matters. 

Exactly. And enjoy the journey, because it’s a long one, but the results will come. 

Awesome. Thank you both for sharing your insights. 

Before we close, let’s take a few questions from the audience. 

One question is whether Avianca has fully moved away from inventory-based analysis. 

The answer is no—we’re still in a transition phase. We still rely on legacy systems, but we’re gradually shifting toward elasticity-based analysis. 

So we’re operating in a hybrid model for now. 

Another question is about how long the transformation took. 

It took about a year to implement willingness to pay across the network, including planning, testing, and deployment. 

The timeline can vary depending on system complexity and data readiness. 

And with that, we’ll wrap up. 

Thank you again to Esteban and Santiago for sharing their experience. It’s been incredibly insightful. 

And thank you to everyone who joined today. We really appreciate your time and participation.