Hawaiian and the Lufthansa Group: Two Approaches to Airline Offer Optimization

July 23, 2025

The airline industry is constantly evolving, and offer optimization has become a critical strategy for airlines looking to stay competitive and progress on the Offer & Order journey. With passenger expectations soaring and technology becoming more advanced, airlines must rethink how they align customer-centric pricing with operational efficiency and legacy technologies. But how does one begin this complex yet rewarding transformation?

To shed light on this, we examine the journeys of two leading airlines, Hawaiian Airlines and Lufthansa Group. Though operating in vastly different markets and dealing with unique challenges, both airlines are leveraging offer optimization to transform their RM and pricing strategies. This blog explores their distinct approaches, lessons learned, and the tools that have powered their success.

Offer Optimization Defined: Multiple Paths, One Goal

At its core, offer optimization is about aligning supply-side capacity constraints with the demand-side willingness to pay, shifting away from class-based pricing toward a more customer- and price-focused strategy that’s targeting to maximize revenue while enhancing customer satisfaction.

This strategy goes beyond ticket pricing. Ancillaries, dynamic bundling, and a robust retail strategy are key elements of offer optimization. While the end goal is the same — to provide the right customer with the right offer at the right price at the right time — the strategy and pace depend heavily on each airline’s maturity, goals, and readiness for change.

Hawaiian Airlines and Lufthansa Group took different routes to successfully implement these strategies. Here’s what they did differently, and how businesses can learn from them.

Lufthansa Group: Retail Ambition Meets Structural Overhaul

Underpinning Lufthansa Group’s approach to offer optimization is an ambitious vision of dynamic retailing, paired with large-scale organizational restructuring.

What They Did Differently:

1. Classless Optimization

Lufthansa Group embraced a classless revenue management (RM) approach, breaking away from legacy fare classes. Instead, they adopted margin controls to create a customer-centric pricing model that is both granular and dynamic, and maps back to the current class-based environment.

2. Dynamic Controls and Integration

To power its next-generation retailing strategy, Lufthansa were among the first to adopt continuous pricing. The group took the next step and implemented PROS Request-Specific Pricing (RSP), a machine learning–driven engine that helps optimize fares in real time. More than just an algorithm, RSP stood out for its ability to deliver pricing consistency across channels, while adapting to Lufthansa’s complex network and dynamic offer needs for granular segmentation.

“The reason why we went with PROS Request-Specific Pricing (RSP) is not just because it’s a modern machine learning approach, but PROS took explicit care of some of these consistency concerns, such that it’s not just a fancy model, but a fancy model that also works.”

Florian Martin
Senior Director of Offer Automation

3. Restructuring for Success

To support its transformation, Lufthansa undertook a major internal restructuring. Siloed analyst roles were consolidated, moving from a three-role setup to a two-role setup to better reflect the unified RM and offer optimization approach. The purpose was to enable faster decision-making, tighter alignment, and a more holistic view of the offer.

4. Strategic Investment in Vendors

The Lufthansa Group has once again partnered with PROS to co-innovate, leveraging existing capabilities instead of recreating them from scratch. While they developed some tools in-house, they chose PROS for its proven technology, long-standing partnership and track record of delivering first-to-market innovations.

“What we still see too often is that people try to reinvent the wheel. If this is already existing, it’s much better usually to go to a vendor and buy it than do a lot of work yourself. That’s just our experience.”

Florian Martin
Senior Director of Offer Automation

Key Takeaways from Lufthansa Group:

Organizational alignment matters as much as technology.
Building trust in sophisticated AI tools accelerates widespread adoption.
Structuring roles like pricing analysts and product managers to align with new systems ensures smoother transitions.

Hawaiian Airlines: Analyst-Driven Evolution Fueled by Data and Trust

Unlike Lufthansa Group’s enterprise-wide overhaul, Hawaiian Airlines adopted an incremental, analyst-driven approach to offer optimization. They prioritized trust-building and cultural change over structural disruption.

What They Did Differently:

1. Willingness-to-Pay (WTP) Adoption

Hawaiian Airlines implemented PROS Revenue Management (PROS RM) network-wide, focusing heavily on Willingness-to-Pay modeling. This marked a major departure from class-based controls, aiming to align pricing more closely with passenger value perceptions.

“We embarked on Willingness-to-Pay and implemented it network-wide. So, we really had no choice but to make sure that it worked.”

Justin Mathew
Manager of Revenue Management Systems

2. Early Resistance: Cultural and Operational Friction

The shift wasn’t seamless. Analysts trained on fare classes and RBDs were skeptical of WTP forecasts, and leaned heavily on manual overrides and legacy workflows. The disconnect between system logic and user habits risked undermining the platform’s value.

3. Driving Adoption Through Training, Visualization, and Testing

To overcome this, Hawaiian launched a comprehensive change management effort:

Hundreds of training hours through analyst workshops, manager sessions, and lunch-and-learns
Simple, custom visualizations to explain WTP mechanics
A/B testing to prove system accuracy, build analyst trust and encourage experimentation
Consistent leadership involvement — with managers actively working in the data to model best practices

“Training was probably our most critical piece that we did. We spent hundreds of hours between our analysts, manager workshops, lunch and learns, topic specific sessions, so that our team could get comfortable with the Willingness-to-Pay specific terms.”

Justin Mathew
Manager of Revenue Management Systems

4. Building Trust and Seeing Results

This hands-on approach paid off. Analysts began to trust the system, make fewer overrides, and use model outputs as a strategic advantage. Adoption wasn’t forced. It grew organically as confidence in the results increased.

Key Takeaways from Hawaiian Airlines:

Training is essential to bridge the gap between legacy practices and modern pricing systems.
A gradual, evolutionary approach works well when transitioning from class-based RM systems.
Open communication and data transparency build trust in AI-powered solutions.

Shared Lessons from Lufthansa and Hawaiian Airlines

Though Lufthansa Group and Hawaiian Airlines pursued different strategies, their journeys reveal a critical insight for any airline attempting the transition to offer optimization: strategy, culture, and tech must align.

Lesson 1: Tools Alone Aren’t Enough

The greatest AI tools won’t help if the business structure and culture aren’t aligned. Lufthansa’s structural overhaul and Hawaiian’s commitment to training demonstrate that success requires a balance between technology, people, and processes.

Lesson 2: Education and Clarity Matter

Both Lufthansa and Hawaiian built robust training programs. Lufthansa through formal curricula, and Hawaiian through analyst workshops, visual tools, and hands-on coaching showed that clarity and education are essential in pricing transformation.

Lesson 3: Progress Over Perfection

Offer optimization is a long-term endeavor built on steady, incremental progress. From Lufthansa’s ambitious enterprise strategies to Hawaiian’s determined implementation, success lies in a thoughtful, deliberate approach that always keeps the ultimate goal in focus.

Lesson 4: Vendor Partnership Pays Off

Both Lufthansa Group and Hawaiian Airlines leveraged trusted vendors like PROS to accelerate their offer optimization journeys. Rather than build everything from scratch, they leaned on proven AI technology to support complex transitions. Partnering with the right technology providers can make the difference between stalled progress and scalable success.

Moving Forward with PROS and Offer Optimization

Whether your airline is just starting its offer optimization journey or looking to scale an existing approach, there’s a path forward for every business model. Tools like PROS Revenue Management, Willingness-to-Pay Forecasting and Optimization, and Request-Specific Pricing enable organizations to adopt dynamic retailing at their own pace.

“I think the path to offer optimization is absolutely doable, but it requires a certain level of risk taking and a certain level of ambition,” remarks Florian Martin.

Ready to unlock the potential of offer optimization, but not sure where to start? PROS can help. From continuous pricing to holistic offer strategies, we can provide the technology, training, and expert guidance you need to succeed.