As we look ahead, the airline industry is set to continue to evolve its approach to retailing and commerce. While many current trends are poised to accelerate, key technological shifts, including AI-driven dynamic pricing, continuous pricing models, and advanced offer management strategies, will redefine how airlines deliver value, optimize revenue, and enhance the passenger experience.
Here are the top predictions and emerging trends set to shape the landscape of airline retailing in the coming year and beyond.
1. The Inflection Point for Offer and Order Management
In 2025, airlines will move from strategic discussions to concrete actions in adopting modern Offer and Order Management (OOM) systems. This shift marks a significant step toward decoupling legacy Passenger Service Systems (PSS) in favor of modular, customer-centric solutions. Although many vendors have championed order management, for airlines, order management investments are quite costly and complex, and will likely require dual-system operation during transitions.
Airlines stand to gain more immediate returns by enhancing offer management strategies that directly influence profitability through better dynamic pricing and personalized bundling. My hot take: offer management is about strategically helping airlines drive revenue and profitability, while order management is primarily an operational technology that acts as an airline cost center.
With this in mind, 2025 is the airlines will increasingly focus on dynamic offer construction, bundling, and continuous pricing strategies to drive incremental revenue. The ability to optimize offers tailored to passenger preferences will become a critical differentiator in competitive markets that has an immediate impact on revenue generation.
2. Increased Adoption of AI and Advanced Analytics to Drive Commercial Efficiency
Artificial intelligence (AI) remains at the forefront of innovation, with AI-driven insights poised to streamline revenue management and offer optimization processes. In an era of constrained resources, airlines must achieve more with limited teams. Airlines are increasingly looking to AI not to replace human expertise but to enhance team productivity by providing better insights and automating repetitive tasks, helping teams make quicker, data-driven decisions and ultimately enhancing operational efficiency without sacrificing revenue opportunities. The evolution of Agentic AI will support this.
AI will also play a pivotal role in improving demand forecasting, price elasticity estimation, and dynamic pricing, helping airlines manage market volatility and unpredictable demand patterns more effectively.
Check out this conversation with Florian Martin, Head of Commercial Offer Methods and Automation at Lufthansa Group, to learn more about how they are continuing to push the edge of innovation in regard to their dynamic pricing and revenue management initiatives.
3. Enhanced Focus on Personalization with Dynamic Ancillary Pricing and Price Elasticity
In today’s fast-paced world, passenger expectations for personalized travel experiences are driving airlines to innovate and offer more dynamic options, including a variety of ancillaries. By leveraging advanced segmentation and customer data, airlines can present relevant, context-aware offers that not only enhance the travel experience but also maximize ancillary sales. For instance, dynamic pricing of baggage fees tailored to a passenger’s likelihood to purchase creates value for both the airline and the traveler.
Dynamic pricing strategies, such as dynamic ancillary pricing and price elasticity, help airlines ensure that they are offering travelers the experience and value they are looking for, at a price that will convert. At the same time, it also ensures that airlines ensure that high-demand travelers always have access to seats at the right price. While lower static prices might lead to sellouts, effective dynamic pricing keeps seats available for the late-booking passenger segment willing to pay a premium. This approach offers convenience and access to travelers while maximizing airline revenue.
4. Optimized Distribution Costs
Distribution remains a significant cost center for airlines. In 2025, cost reduction strategies will take center stage, particularly in the context of metasearch and OTA channels. PROS Shopping and Pricing solutions offer compelling benefits by delivering accurate, dynamic prices at a fraction of the cost of traditional shopping engines, while also enabling a more tailored offer approach for distribution partners. Early successes with carriers such as Lufthansa and large Tier 1 carriers in North America and EMEA highlight the potential for significant cost savings while supporting continuous pricing.
This dual approach—reducing distribution expenses while optimizing offer strategies—positions airlines to achieve sustainable profitability amid tightening margins. It is also an important step in the journey toward modularity, with airlines selecting more best-of vendors and stepping away from long-term vendor lock-in.
5. A Shift in Revenue Management Mindset
The traditional view of revenue management as a static, class-based process will continue to evolve. Airlines must embrace a mindset rooted in economics, focusing on elasticity —the degree to which demand changes in response to price changes—and better understanding and dynamically adjusting prices to maximize revenue, rather than rigid inventory controls.
This shift in thinking will have analysts start thinking like economists rather than class jockeys, and as airlines adopt this modern, data-driven approach to pricing, they will be better equipped to navigate shifting market conditions and capture untapped revenue potential.
Looking Ahead
As 2025 unfolds, airlines face an exciting yet challenging landscape. The convergence of AI, dynamic offer management, and cost-optimized distribution creates immense opportunities for growth and innovation. By embracing these trends and rethinking legacy paradigms, airlines can redefine how they engage customers, maximize profitability, and lead the next generation of airline commerce.
Frequently Asked Questions
In 2025, the airline industry will focus on several key trends. These include the adoption of modern Offer and Order Management (OOM) systems, using AI for smarter revenue management, creating tailored offers with dynamic pricing, and finding ways to lower distribution costs. The main goal is to move from older systems to more flexible, data-driven approaches that improve profitability and the passenger experience.
AI is set to make airline teams more productive and efficient. Instead of replacing human experts, AI will provide better insights and automate repetitive tasks. This helps teams make faster, data-driven decisions. AI will play a major role in improving demand forecasting, understanding price elasticity, and implementing dynamic pricing, which helps airlines better manage market changes and boost revenue.
Offer and Order Management (OOM) represents a shift away from traditional, rigid airline systems. Offer management focuses on strategically creating and pricing offers — like flights and extras — to drive revenue. Order management is the operational side that handles the booking once it’s made. In 2025, airlines will focus more on offer management to gain immediate returns through dynamic pricing and tailored bundles, which has a direct impact on profitability.
Dynamic pricing allows airlines to adjust prices for flights and extras in real time based on customer data and market demand. For example, the price of baggage might be tailored to a specific passenger’s likelihood to buy. This helps airlines present relevant, context-aware offers that improve the travel experience. By understanding price elasticity — how price changes affect demand — airlines can offer the right products at a price that converts, maximizing both customer value and airline revenue.
Traditional revenue management often relies on static, class-based inventory controls. The trend for 2025 is a shift toward a mindset rooted in economics, focusing on price elasticity. This means revenue analysts will act more like economists, dynamically adjusting prices based on how demand responds to price changes. This modern, data-driven approach helps airlines navigate market shifts more effectively and capture revenue potential that rigid inventory controls might miss.
Distribution through channels like metasearch sites and Online Travel Agencies (OTAs) is a major expense for airlines. In 2025, a key trend is to reduce these costs by using solutions that deliver accurate, dynamic prices more efficiently than traditional shopping engines. This not only lowers expenses, but also supports advanced strategies like continuous pricing, helping airlines achieve sustainable profitability.
