4 Tips to Beat the Complexity of Airfare Repricing
According to the IATA’s 2019 Global Passenger Survey 55% of passengers have experienced a travel disruption within the past 12 months. This is huge, meaning one out of two travelers goes through a trip change.
Changing travel plans is so much more complex than changing a gadget you just bought on Amazon. There is complexity related to flight operations, passengers and duty of care, processing repricing operations for exchanges and refunds – you name it. Not only does this occur involuntarily due to various reasons, but on average we’ve seen 20% of travelers initiate trip changes1.
In this blog post, I’d like to focus on airfare repricing and talk a little bit more about how airlines can improve this process.
Airfare repricing is often a heavy, manual process for airlines. It requires experts with deep industry knowledge around fare rule categories (ATPCO or other), combined with proficiency in calculations related to refunds and collectable amounts. The good news is that experts today can fully rely on repricing automation. The lack of it leads to long error-prone processes, possible loss of revenue due to non- or under collection and unhappy passengers.
Here are 4 tips to simplify airfare repricing:
- Get granular to the lowest level.
Airfare repricing involves interpreting vast volumes of fare and tax information. Use cases for exchange and cancellations can be pretty complex: they might involve disruption of part of the journey with partially flown segments or repricing tickets bought with award fares or in different currency in another point of sale. This is why automating airfare repricing takes into account all the necessary historic data regarding fares, YQ/YR and airport taxes and currencies, avoiding any discrepancies and revenue loss for your airline.
- Monetize automation.
Repricing transactions can be costly for a number of reasons. On one side, human error leads to revenue leakage due to poor interpreting of fare rules and incorrect recalculations. Through automation you improve accuracy, avoid errors and ensure collection of all due amounts. This revenue management solution minimizes the need to research agency debit memos and frees valuable resources to focus on what’s the real revenue driver – customer satisfaction. As a result, your agents shift to value-added activities like customer service and improving the experience with the airline brand.
On the other side, repricing generates PSS costs. However, by shifting to a process of automated re-shopping you avoid exponential cost related to repricing transactions, as all requests are handled outside of the airline’s core IT system. This ensures that only confirmed repricing hits the passenger service system.
- Offer choices to travelers.
Yes, plans often change and travelers need choices. They would rarely just pick the first alternative flight option. This is an upsell opportunity for airlines. Be flexible to apply business rules when displaying various breakdown of alternatives to travelers. You might want them to explore different branded fare options and the associated optional products – like extra baggage or transportation of sports equipment.
- Gain flexible control.
Retailers define their own exchange and refund policy; hence airlines also need a better level of control over the conditions how ticket repricing is done. But unlike retail, there is a lot of complexity involved – not only related to the fare rules, but also defining the exchangeability and reusability of taxes. These vary from airport, to YQ/YR, to government taxes and how they are handled in cases where a journey is partially flown. Also, they could be very carrier - or channel specific. Through multiple business rules you can ensure better control to accurately respect all tax specifics and avoid non- or under collection, tax discrepancies, etc. In addition to this, by defining pre-validation rules you secure that repricing is initiated only in cases that comply with your carrier’s repricing policy.
These are only a few of the options to improve the complex repricing process. Stay tuned in 2020 for a more detailed guide on how to protect revenue by making airfare repricing more efficient and less error-prone.
1 Internal PROS customer data