PROS Resources


Continuous pricing offers airlines a safe opportunity to boost revenues and gain a competitive edge, especially when fleet and market expansions are limited. Despite its benefits, implementation has been hindered by legacy technical and commercial barriers, such as outdated IT systems, business processes focused on availability rather than pricing, and organizational resistance to change.

As the shift towards Offer and Order management accelerates, continuous pricing becomes essential. This webinar, featuring experts from Air Canada, the Lufthansa Group, and PROS, explores how airlines can implement continuous pricing alongside existing legacy systems.

Key Topics

  • Understanding Dynamic Pricing: Explore differences and similarities between dynamic availability, continuous pricing, and request-specific pricing.
  • Overcoming Barriers: Identify and address legacy systems and processes that impede adoption and learn strategies to foster a culture of innovation.
  • Strategic Implementation: Learn how to integrate dynamic pricing with existing systems, manage price modifications, and ensure seamless downstream adoption.
  • Success Stories: Hear from Air Canada and the Lufthansa Group about their challenges, solutions, and significant results with continuous pricing.

Speakers

Carlos Headshot

Carlos Parra
Senior Strategic Consultant, PROS

Paul Headshot

Paul Hohler
Senior Product Manager, PROS

Lucio Headshot

Lucio Bustillo
Guest Speaker, Air Canada

Bazyli Headshot

Bazyli Szymański
Guest Speaker, Air Canada

Sebastien Headshot

Sebastien Nicolas
Guest Speaker, Lufthansa Group

Anca Headshot

Anca Sbenghe
Guest Speaker, Lufthansa Group

Full Transcript

Alright. Good day. Wherever you’re joining from, welcome to today’s webinar on continuous pricing in the airline industry. I am Carlos Parra, and I’ll be co moderating today’s session alongside my colleague, Paul. Paul, go ahead.

Thanks, Carlos. My name is Paul Hohler. I’m a product manager at PROS. And, with us, we have some industry experts with us to share their insights, experience, and lessons learned, around implementing continuous pricing. So we’re really excited to have them here. We’ll let them introduce themselves from, from Lufthansa Group and Air Canada. Maybe Lufthansa Group start out south.

Hi, everyone. I will start. My name is, Anka Sbenghe.

I am a project lead and business analyst representing offer solutions team, at Lufthansa Group, part of the commercial offer business unit.

I am one of the responsible parties for, continuous pricing, topic that we are very proud and excited about. And, happy to be here, with you to share our experience down the road of, implementing continuous pricing for Lufthansa Group airlines.

Sebastien? Hey.

Good morning. Good afternoon. Good evening, everyone. So I’m my name is Sebastien Nicolas. I’m principal revenue management system installation, for the commercial offer department of the Lufthansa Group.

Good morning, good afternoon, and good evening for, for everyone. My name is Lucio Bustillo, senior director revenue management science and practice at Air Canada. My team is focused on calibrating the revenue management solutions for AC. So that’s RMA, RTDP, itinerary building, as well as revenue integrity. We also provide support when it comes to the development of best practices and training.

And with the room in the room with Lucio, Bazyli Szymański. I’m part of the revenue management strategic planning team here at Air Canada, and I was the business lead for the the continuous pricing project here. We’re in one room, so that’s great because all the questions go to Lucio.

Thank you all.

Alright. So let’s kick things off with, integration with existing systems. We’ve prepared a few questions.

So could you share what are, what were the biggest technical hurdles you faced when integrating continuous pricing with your existing distribution channels? And if Air Canada can answer first followed by Lufthanske Group.

So, I’ll go first. So I think that, honestly, we had hurdles in many of the of the touch points that we had to clear. So the first one was really on the front ends and the middleware. So Air Canada uses a series of middleware applications to manage the communication between the pricing engine and the and the front end. So those middlewares have to be first of all, some of them have to be migrated to pipelines that are compatible with continuous pricing. Remember that continuous pricing is not available in explicit Edifact floats.

And, also, of course, you have to add some supporting infrastructure to the front end and, and the middleware to be able to transmit and store the information that is required to record the continuous pricing. So that was the first hurdle that we had. The second one was really with the pricing engine themselves. So there had to be quite a bit of performance tuning, when it comes to our main, pricing engine supporting our website because CP is computationally hungry and can lead to stability issues, especially if you have very complex pricing structure.

So there was quite a bit of performance tuning there. Also, we had to do some customizations to ensure that the pricing engine was able to deliver, the continuous pricing and the sequence of discounts in a way that is compatible with our business model. So there had to be some developments there to improve or or modify a little bit the pricing engine. But now that those developments are done, well, they are done.

Alright? They become available to most airlines.

And, the third one was really on the RTDP side. Here, there was not a lot of effort that was invested. Honestly, RTDP has the capability mostly out of the box. We only, requested pros to help us with some customizations that are specific to our own business model.

But we were an RTDP customer before continuous pricing. So the activation of continuous pricing itself in RTDP was, pretty much seamless.

The last area, where we had to sort of clear some hurdles, and this is where a lot of the work went in, is really the back office. So on the revenue accounting side, stamping the tickets and stamping the PNRs with the continuous pricing information to make sure that we’re able to report it correctly and present it to revenue management, was quite a bit of a of a hurdle. So, also, the reporting systems, had to be adapted, to be, to be able to present the information correctly.

Then the servicing channels, there was a significant investment to make sure that they’re able to provide service with continuous pricing.

Mind you, if you if you service a PR with continuous pricing in traditional channels, you can. Nothing impedes you from doing that. But if you want to provide servicing with the same continuous pricing you are presenting on the website, You need to do some adaptations to to make it happen.

And the last and probably the one that we’re still working on is, really the integration with the big channels such as big Netas and OTAs that might have very complicated architecture on their end and might require a little bit, a few additional adaptations for you to present correctly and especially for the passenger to complete the booking correctly.

So we can or that’s an overview, and I’ll hand it on to Lufthansa Group.

Yes. So I would say one of the biggest challenge that, was actually to manage the different technical capabilities across the different distribution, channel that we have because each of one has its own setup. It has as well its own, IT features and aligning all of them under a single continuous pricing logic was definitely not easy. Because when you think about multiple channels, of course, we naturally face multiple pricing logics, and, getting those as consistent as possible was really the big part of the task.

And, especially, we run into a few key issues. Some of them are similar to what Arcana just mentioned.

So, yeah, the discrepancy between different pricing engines because even with small calculation differences, it was creating some problem for consistency, not having the same price necessarily in the in the different channels.

I think, Lucille, you mentioned that as well. The the tracking of continuous pricing consistently across the different system, it was very tricky especially when it comes to reporting and post sales processes.

Yeah. And when it comes to the compatibility with other discounting mechanisms like promotions or like corporate sales, they are they’re varying actually from from channel to channel.

Some actually were very straightforward to fix, but some others were less and we really, requiring extra work.

And finally, integrating CPU with existing servicing processes, things like refund or exchange.

This was adding definitely another layer of, complexity.

So in short, it was really aligning the system and ensuring the smooth integration with discounting and servicing, that was, the tricky part for us.

Great. Thanks both.

Digging into that a little bit more. So how did you guys change the PNR creation process to ensure that downstream systems can consume those continuous prices? And this time maybe we start with Lufthansa Group.

Yeah. Certainly. So basically for us, we we actually kept the piano creation process itself largely as it was and it’s still today. So continuous processing was implemented within the, existing framework.

The real impact actually came from the downstream, mainly through the, everything which is linked to the ticketing, information. This is where we face, let’s say, the, the some of the of the challenges.

And specifically specifically again, the the sales reporting became much more complex because we had to make sure that the data reflected the continuous pricing, information accurately.

But as well the fare audits needed adjustment to properly validate the fare which was derived from continuous pricing and again the reporting processes. In general, we had to redefine the reporting process to ensure the consistency across the systems. Overall, again the P and A creation was stable, we just needed to adapt the different processes which are relying on on ticketing processes.

Great. And for Air Canada, was that similar for you or or different?

I I would say I would say it’s pretty similar. In principle, we could have kept the exact same process that we had with the PNR. But as Sebastian stated, the reporting part is very important. So we had to we had to create some adaptations to it.

In our side, we did a progressive deployment. So the building up of the CP functionality, was done over over almost a couple of years. In the phase one of the project, our middleware software was, recording some of the continuous pricing information and stamping it in the PNR in the form in the form of comments. This was a temporary solution, but then we worked together with, with Amadeus to make sure that the fair calculation information was recorded in another section of the, of the PNR.

So that also enables us to do, ATC a little bit later.

But that final piece of recording it in a sector of, of the PNR was really the only change.

Nothing nothing changed dramatically.

There were some adaptations that were done for the creation of the ticket.

Most notably, the addition of the fare calculation, pricing indicator or FCPI, if I’m not mistaken, which had to be a custom development to ensure that we had something that explicitly flags out that this is a PNR or a ticket that has been generated with continuous price.

Thank you. Thank you. That that’s, very helpful for us to to hear.

So, Lucio, we we would also like to understand, what did it take to enable automated servicing of dynamically priced itineraries?

Can you tell us more about the refund and reissue processes?

And then, maybe if, Air Canada can start, followed by the Lufthansa Group.

Sure. So, I can I can cover it? I would say that there’s still a piece of, of this section that is still in construction for us.

But I would say that the the most the most important part is, recording correctly the fare calculation, so it can be used a little bit later on ATC. So if you record the fare calculation accurately, the refunds can be processed accurately. So that part was, let’s say, a day one type of requirement.

Servicing with continuous pricing automatically, that one was a little bit deferred. So you are able to service a continuous pricing PNR, currently, but you are not able to service it with a continuous pricing on the website because our website requires to be migrated to a specific series of web services that are designed for it. However, most of our servicing happens, via call centers. That channel does have access to, to continuous pricing. So, essentially, for the refund part, that is a day one requirement. So recording correctly, the, the fair calculation is extremely important.

And when it comes to servicing, after we modify the PNR to record the calculation of the details, that enables ATC to be able to reprice with the same inputs that you had with the original price creation. So that allows you to consistently reproduce the price that you had with continuous pricing at, at the beginning. And finally, the last component that we have is a modification of our our website. So, it migrates to the stack that is able to do, continuous pricing for massive PNR service.

Still a work ongoing.

I see. Thanks.

And now from the Lufthansa group, any anything to add?

Well, it sounds a bit similar to what, Luci mentioned, but what I can maybe add on it is that for the Lucien Zagreb, this end to end servicing, meaning refund and reissue, we concentrated on it, but unfortunately, a bit at the time of implementation, not really at the beginning.

And, that means that we face some some issues, obviously, meaning that the rebooking and the refund were possible from day one.

But applying continuous pricing dynamically during the rebooking process was just simply feasible, partially on one of our channel and not on on the other one. So there was some we decided to go commercially, actually, with this decision, which was not an easy one as you can imagine in order to not delay even further the, implementation.

But where maybe I can add on on Lucio is where we faced the issue was really on the legacy process side, that we were facing bigger challenge. Mainly because the traditional processes, rely still heavily on the concept of historical sales. And we know that this concept doesn’t really exist in a world of of continuous pricing.

But both legal and commercial frameworks, they still require some reference actually to historical data, for certain servicing rules.

So to address this, it was a very important one. We really had to rethink what historical data means in a context of continuous pricing, and we had to apply the new logic that meets both legal requirement but as well commercial realities.

We had as well some issue when it comes to category thirty one and category thirty three from ATPCO because as well, these are by design not meant to be used or necessarily used for continuous pricing. So we have been working with ATPCO to try to explore some solutions, to propose as well as some updates for the industry that it really reflect the current, continuous pricing dynamic of reality. So overall, it’s a mix of technical, legal, and industry effort. And I would add, like as Lucio mentioned for Air Canada, for Lufthansa Group, we are not there yet where we would like to be when it comes to servicing.

But we believe that in a fully modern airline, retailing environment, we still some potential to reach our goals.

Yeah.

K.

Thank you.

Thank you very much. So, from our first few questions, it certainly seems that these could be sort of larger projects within an airline.

Can you guys tell us and and talk about how your teams collaborated across IT, commercial, legal, and revenue management? And then this time, maybe Lufthansa Group to start.

Yeah. Let me take this one. So, the project, vast project was a clear example how cross functional collaboration is essential for success. So we could not have worked hard without really, close cooperation between revenue management, pricing, especially, IT, and distribution.

Also, we had the focus on the end consumer, and this is where, sales came in, and they played a big role in, communicating and and adopting, play supporting with this with the with the travel trade.

It was mentioned before, impact to, the revenue accounting to, reporting. So these downstream processes had to be, very carefully considered.

So collaboration with this business use needs, was, again, very important from the get go and during the implementation.

And then, various specific needs for each airline brands of the Lufthansa group had to be also considered, which at times added some layer of complexity.

So to sum it up, the core changes in revenue management, such science, pricing, and steering, important, but the real impact was felt in the broader ecosystem of the Lufthansa Group.

Great. Lucio and Basilie, does, anything from Air Canada side you want to add to that?

Yeah. So, on our side, I think, the the scale of the scale of the project is very similar to what the the Lufthansa team described. I would just add that on our side, we got very lucky in the sense that we have, we had a revenue management people with IT background and IT people with revenue management backgrounds that made a big difference for us. Also, we had a very close collaboration when it comes to the architecture, distribution, and digital team. Because especially when it comes to the integration patterns for the different types of channels, having those teams on board is a really good idea because it’s a good time to rethink those integration patterns. So if you ever have the opportunity to clean house in terms of all integration patterns and trying to standardize everything, really continuous pricing is a is a great opportunity to do so. I would also add that, by having that close collaboration, we were able to break down the project in what we call levels of functionality.

So for us and and for any airline, CP doesn’t need to be a big bank robber. It it can be a very progressive ramp up when you start, when you start deploying layers of the functionality.

And with the stakeholders, having that type of approach really helps you a lot because it built first of all, you’re able to show the tool relatively early and demonstrate that the tool is working as intended.

And second of all, it allows to build trust as you add and add and add functionalities and build on top of, of an initial base.

That close collaboration really enabled us to deliver something that was progressive and orderly rather than having a big, big band that can be very disruptive for, for for the company.

So, I would say that’s a little bit, what I would add to what Sebastian mentioned.

Thank you. So, I I’m curious. Both airlines work with multiple vendors. So what advantages, if any, did you realize by keeping the availability and the continuous pricing logic in a single system? And this time, let’s start with the Lufthansa Group.

Yes. Happy to share this, because from the very beginning, it made full sense to keep the availability calculation and continuous pricing logic in, a single system.

And why is that? At Lufthansa Group, we have been, using a willingness to pay and an opportunity cost in our availability calculation for many years. Therefore, CP was just a natural next step to you to be built using the same parameters, which resulting in a consistency of the offer.

Also, this meant, a seamless transition into the new way of offer.

And, one comment, important as well, working, with Pros, as a partner, which managed both front end and back end for already RTDP, the availability calculation, further streamlined this, shift from the, discrete, pricing with dynamic availability to continuous pricing. So made full sense to have it, altogether.

Thank you, Anke. What about for Air Canada?

Yeah. So, maybe maybe I’ll take this one. The implementation of continuous pricing for us has overlapped with our roadmap towards willingness to pay optimization and forecasting. So just like for our colleagues, at Lufthansa Group, having both continuous pricing and availability calculations in the same place really helped us with a smoother transition.

And we were also able to handle both, markets which have willingness to pay, so the transform fares, and markets with traditional, optimization.

These were buy down is is modeled purely using user user adjustments.

Maybe on top of what what, our colleagues from Lutanza said, I also have that for us.

The benefit was also on the reporting side. So we were able to pull data on continuous pricing adjustments, future looking adjustments, through the same extracts that we already used today, for availability, reporting.

And and maybe just to conclude, I think more broadly, we believe that continuous pricing is part of the optimal availability calculation, and it belongs there in the sense that that’s the determination of the, what’s called, the right to fly price in the offer and order world. So it was, pretty natural for us to have both in one place.

Thank you for sharing that.

So moving on to sort of implementation topics, what kind of unexpected challenges did you encounter during the implementation? And, again, let’s start with Lufthansa Group on this one.

Yes. I will take that one, and, I can yeah. So that one of the unexpected challenge basically was, what we under underestimated a bit was managing the implementation with different multiple pricing engines because each of them has its own technical capabilities and and will interpret interpretation.

And we had to align these differences, and it proved to be more complex than we initially, anticipated.

The second unexpected challenge was actually when we started to, deploy continuous pricing on intercontinental routes, where we had to last minute, let’s say, adjust, to eligible booking class, which added some some pressure as well, on the timeline.

But I would say the most, significant, change we had, and which really caused the delay of our plan go live, were the identification of continuous pricing in the ticketing data. I think, Lucio touched it a bit, just before.

And because there is currently no industry standards, how to recognize continuous pricing, we initially adopted a a solution using, a ticket design nature.

However, very quickly, after implementation, we found out that this approach was just simply not sustainable in the long term. So we had to, revert back, try to find another solution, and we had to really invest as well in, in an additional, implementation in order to have a more robust solution using this FCPI, a solution that Lucio again was mentioning. And this caused a delay in the end but in the end, it was it was worth the investment because now we we can really see the the difference. We really have a solution which is, scalable and, that we we could implement in a robust solution. Yeah.

Anything to add from the Arcanda side?

Yeah. So, definitely, I would add that, from our side, our implementation really started much later than what Lufthansa did. So in many senses, the research that was done, by by the by the vendors and by Lufthansa and and other airlines, we benefited from that alignment between pricing engines already being being solved.

So that that’s also something rather encouraging that as more airlines are deploying this, you benefit from the work of of, of other airlines that have deployed it. So from our side, I think that the main challenge was the because we decided to do a progressive functionality build up, it created a lot of hidden dependencies between channels that were only really spotted once you were trying to put things into production.

So that, let’s say, created a lot of complexity when it came to estimating the project timeline, and sometimes you would have two or three items that would have a a dependency to another. So it really not having a big bank could have really made it. So, we had to adjust the project plan a lot along the way.

This is this is the price that you pay by doing a progressive functionality build up.

And maybe the other challenge that I would add is, keeping our stakeholders aligned, because, let’s say that the outside of revenue management, the concept of continuous pricing is not necessarily very clear. There’s a lot of hype of around dynamic pricing, and the term is very widely used in the industry in very different ways. So it’s very difficult to align, all the key stakeholders of sales, IT, revenue accounting, and so on, to understand what the concept is, what it is really doing, and and to be able to share adequately what are the benefits. So keeping the stakeholders in line, and on the RM side, keeping your cool because you’re changing significantly the way that you price. So, this can create a lot of anxiety on on on the revenue management side. And as Sebastian mentioned, the reporting part is very important to make sure that that anxiety doesn’t take over. Having clarity over what you’re selling is very important.

Okay. So thank thank you both. And and, how would you say that, that you, manage this change within the organization, especially among the pricing analysts and the commercial teams?

Maybe if Air Canada can continue?

Yeah. Happy to take that one. I mean, where do I start? To to to state the obvious, change management, really a key success to to this project.

You know, I think as Anika said before and Lucio just mentioned, this project reached far beyond, revenue management. And so, first of all, identifying and engaging all the stakeholders in other parts of organizations, that was that was that was key.

But speaking of RM teams, specifically, although continuous pricing introduced no huge change to to the practice, it did pose some strategic challenges, that required some strong support from our stakeholders.

So let me give you a few examples here. First, the best practices change. We did a pretty broad impact assessment at the beginning, of the project, and we knew that continuous pricing is not going to fundamentally change the lives of pricing analysts or FMs or DMs.

However, we did know that continuous pricing, will be interacting with some key levers such as RTTP strategies, CSM, bid price influences if anyone chooses to use that.

So we did make a point of training the teams on ensuring that the adjustments they do to availability don’t disable continuous pricing. And in fact, as as the project was deploying progressively, as Lucio was saying, over time, continuous pricing became sort of a vehicle for promoting better pricing practices. You have more CP, meaning, you’re using less, less strategies that would not be, aligned with best practices.

Second example, turn away this perception of discounting.

Revenue management initially viewed CP as a discount mechanism.

Since, for us, continuous pricing adjusts the lowest available class downwards, it was important to overcome this misconception.

So what we tried to do is reposition continuous pricing as this is the new optimal price. This is what you would be selling if you were not limited to a discrete set of fares.

We’re benefiting from the dynamic aspect of capacity, of demand to capacity ratio being better reflected in in the price.

And last, maybe, just aligning on the business expectations.

So, providing regular updates to our our own leadership, being transparent about all the limitations and risks that we’re we’re having as we deploy this progressively, and involve revenue management in, design and some of the features of of continuous pricing. And one thing that, maybe I’ll I’ll have a chance to touch on later is we’re on an AB test that quantified the benefit of continuous pricing, and that was also very helpful in getting sort of full buy in, both from, you know, stakeholders, directors, but also the the the geo teams, RM teams themselves.

Excellent. What about from the Lufthansa group?

Yeah. Happy to add on that. It’s a very important question.

We adjusted to the audience when on boarding on the new way of offers, and I will touch on two different areas. First of all, revenue management, very, important. Our organizational structure, supported this, transition.

And, how why is that? Because we had already had centralized, availability management on this tiering with the pricing, with the pricing unit. So, for pricing analyst, it was essential to explain, how the known parameters of, our willingness to pay and opportunity cost, which are used in the availability calculation, are the same used to determine to derive the, optimal price for the continuous pricing. Also, one of the, revenue management topics was we had dynamic pricing for groups for many years, well before, continuous pricing. So the teams were accustomed to, the, to dynamic, approaches.

And the the other area where we also focused to showcase continuous pricing, was, the sales distribution. So, wider, environment. Here, we focus to showcase, CP, in a familiar context. For example, booking classes, fair families, tickets, and so on. So, it was the aim was to be understood and adopted more easily.

Great. That’s brilliant.

You very much.

Moving on to some more, you know, exciting things in terms of, like, success factors. I know you guys talked a little bit about this, but, what would you say would be the top three factors that contributed to its successful implementation of continuous pricing? And and this time, let’s start with Air Canada.

So I’ll keep it, I’ll keep it very short for this one. So first of all, having a very close partnership when it comes to the business, technical teams, and vendor. And especially when it comes to the team, it’s very important to have them on board early, not because there are any major things that they need to do, but because regulation, tends to be very, let’s say, bilateral and requires a lot of interpretation. Sometimes you need to get clarifications and so on, so it’s important to get them onboarded early.

The second one would be having a very comprehensive and early change management. People need to hear about a change this big at least twenty times before they actually grasp that it’s not going to be a big problem and that this is just the airline doing or delivering the prices it was supposed to deliver from the optimization.

And, probably another one more from the project’s perspective is being able to prioritize and define, milestones and being able to be as you find dependencies or as your business strategy changes, to pivot, to even if you have to cut down some scope some scope, to deliver, something in the production environment so you can keep building that trust with the with the stakeholders and keep the momentum going, on the project itself.

I’ll hand it over to the group.

Right. I’m happy to add them here.

I think, we have, several similar enablers for success. And for us, first and, first of all was, let’s say, to sit to set the scene. And here, two sub points, revenue management, a strong foundation of availability, managed pricing. So we had already moved way before, continuous pricing implementation beyond, static fares, structures and heavy, ATPCO filings.

This, allowed us to manage price price elasticity, more efficiently and dynamically. And the number, two, freedom of the offer. So, having, the distribution, and this freedom, was a prerequisite and supported with the, with the success of the implementation. Number two, again, not too long on this because I mentioned it before is the system integration, having, continuous pricing in the same, system where we also executed the availability for years.

Again, ensured consistency and a very efficient implementation.

And, number three, I would say, strategic investment. We continue to invest, in continuous pricing deployment, gradual rollout during pandemic.

Twenty twenty, twenty twenty one, we already, covered, big scope. And by the end of twenty twenty three, we had, what we call, Lufthansa Group, fare map was continuous pricing. So, we are, in all, eligible traffic scopes. We were with continuous pricing by twenty twenty three.

Thank you, Anka. So if we shift to, business impact and learnings, right, talking about outcomes and insights, what metrics have you used to evaluate continuous pricing, and what measurable benefits have you seen? Maybe if we can start with Air Canada.

Yeah. I I I love this question.

So, so let me cover a couple.

First, metrics that show that continuous pricing is actually kicking in.

Given the interaction of different user levers that I mentioned before with the CP algorithm, some of which may disable continuous pricing, we wanted to understand that as we deploy continuous pricing, we’re actually selling it. A BI report that included frequency of continuous pricing at different levels of aggregation, OD, departure period period channel, was key to the successful deployment for us.

The number of CP transactions increasing, over time could be tracked. And, ODs or channels which have low continuous pricing penetration could be pinpointed and we could say, okay. Maybe we could should should adjust some things there, or maybe there’s a technical issue, which is limiting us from deploying continuous pricing in that, in that area. That also was another, part of the feedback loop to our RM analysts who at times needed to make these adjustments to system overrides, and making it visual and tangible. You know, twenty three percent of tickets between Montreal and Halifax have have been sold with continuous pricing last week. That helps us build the the hype about continuous pricing, with, our end teams that makes it, sort of very tangible.

On top of that, we also had the the average continuous pricing adjustment amount that helps us sort of manage some of the concerns about CP, being too much of a discounting mechanism, and we as we said earlier. And and finally, something that that’s maybe closest to my heart was the a b test.

So we run a, quite rigorous AB test to try to isolate the benefits of continuous pricing from all the other noise in our data.

First of all, that allowed us to confirm this is an investment that’s really beneficial for Canada.

It allowed us to measure implications on metrics such as yields, such as traffic.

And, it became one of the key elements to convincing stakeholders about continuous pricing value, and also and also from a practical standpoint, providing all the financial evaluations that we, would need it to do.

Thank you.

What about the Lufthansa group?

Yeah. I will, just continue. And for us, yeah, it’s similar to the, the what, what, what, Vazili mentioned in, regards to the measures.

It is they are the benefits are focused more on the benefits, first and foremost, to the revenue.

So, here, through the real time response to the willingness to pay and to the demand, we could see, proven increased revenues.

Additionally, we’ve tracked, the shift in customer behavior. Basically, a shift in our channels, more bookings coming through the, continuous pricing enabled channels like our website, group website dot com, and the NDC NDC channel.

Great. Thank you very much for that. And and, obviously, it’s always great to hear about revenue benefits.

But from the other side, I mean, how has continuous pricing helped your customer experience? And, again, let’s start with Lufthansa Group.

Yeah. I would take that one, and I think that’s when we can try to keep it simple and short, basically, because, by principle, continuous pricing gives, to the customer a much more wider range of of price points, and these price points are much more tailored to their travel and their booking needs. So, consequently, by reducing the, least sharp price jump that we have, today and which are tied to booking classes, it really helps to increase the the booking conversion, rates.

And by doing that, it’s, of course, it’s so better served the last minute and the higher willingness to pay customers because it’s just simply matching the capacity availability, with their, booking behavior.

Great. Anything to add, Ercan?

Hundred percent on on what Sebastian has said. I think that’s the the the more gradual, aspect of of the price change that was maybe the biggest, tangible customer experience, changed. But maybe in addition to that, of course, coming now to our direct channels, customers, were offered with a more attractive price, with a better experience.

So that was the other the other positive aspect. We also tried to keep customer experience central to to this project, and that’s one of the reasons why we’re we’re putting a lot of effort on making sure that all the flows, finally get continuous pricing and servicing, which we talked a lot about at the beginning of this, of this call, was one good example. So we wanna make sure that the customer is able to get continuous pricing throughout all the flows, as we end this this project.

Excellent. Thank you both. And how has continuous pricing changed the way your teams think about fare structures and offer creation? I I believe you’ve touched a bit on this, but maybe if, Anke, you can share a bit more detail.

Yeah. Sure. For Lufthansa group analyst and these, are the stakeholders with the direct impact to offer, continuous pricing hasn’t changed fundamentally the approach to the fair structure. Basically, the continuous price decision is derived on the same basis as discrete price and availability are. And because of our RMA environment, also mentioned before, science and operational pricing, and processes, they were already aligned to continuous pricing principles.

For the analyst, the transition was more of a natural evolution than a disruptive change.

Thank you. What about from the Air Canada perspective?

Yeah. I I mean, you know, as the title of this webinar says, we still operate in a world of of booking classes, and that’s, I think, part of why, this demand is relatively a little upkeep from revenue management as we as we roll this out.

However, I’ll say that having a well defined fare structure is always the right starting point, especially in markets where we have more complex ladders with, with restrictions, etcetera.

In our case, we already had models that, optimized, sort of the the the fair grid. MCE did not change how the teams think about, filing fares or pricing from that perspective.

As we mentioned earlier, though, on the availability side, of course, we recommended some changes to to user overrides.

One thing I will highlight, is we learned the hard way that the more exceptions we have, the more complexity we have in our pricing, the more weird categories we use, the more inconsistencies we can have when this is paired with with continuous pricing, due to different, challenges in making this computation work, work correctly.

And this occasionally led to, weird or suboptimal solutions, but, you know, we we sorted a lot of these things out, over time. And, you know, we hope that also it could lead to some simplification on on that front, in the future.

Great. Thank you very much.

So as we come to sort of close to the end here, what advice would you give to airlines who are just beginning their journey on continuous pricing? And, again, Air Canada, maybe start us off on that.

Sure. So first of all, I I would start by saying that continuous pricing, if you’re thinking of, moving to offers and orders and so on, and also your it’s the next logical step that you wanna take. So, it’s, it’s something that, even though you might be in or the industry might be in a state where you’re transitioning to something else, that right to fly, that, continuous pricing offer you is something that that is sort of the foundation of that new world of offers and orders. So it’s it’s really something that is, that is quite, quite important to do.

Also keep in mind that, when it comes to the your channels, there’s going to be a lot of, a lot of complexity when it comes to integration. So take this opportunity to do a little bit of a cleanup and simplify your integration and your IT, when it comes to your channels. From a pure project standpoint, definitely being able to deploy progressively or having a proof of concept that allows you to see continuous pricing end on end and build on it is probably the easiest approach because, anyway, you’re touching every single contact point in the in the company. So it’s very important that you’re able to measure and understand the implications of, of what you’re doing.

As I mentioned already, having your change management start very early is, is extremely important and also ensuring that the the vision of continuous pricing that you have and the rationale, of continuous pricing and how it improves the customer experience, you have to make sure that that is visible across the whole company because this is a very lengthy project. It’s gonna it’s gonna it’s gonna involve a lot of technical resources, and you need support from every area of the company. So you have to have a clear vision that you sell to the whole company.

Great. Thank you. Anything reasonable, Tanzer Group, you wanna add?

Yeah. Just the the, closing, from us, wrap up of what’s been discussed so far. I would summarize it to three main points.

End to end view, very important to consider it an all CPE is not just the pricing initiative.

It’s a foundational step towards offer and order. So, legal regulatory aspects must be considered, and the distribution strategy, has to be, kept in, in mind at all times. Number two, also recognize very early that continuous pricing, requires not only investment on systems and, science, but, also change management.

Also important if done, early would, solve some hurdles along the way. And, last not least, maybe I would say a prerequisite is the airlines to reevaluate traditional pricing and, fare filing practices.

So I would say take continuous pricing as an opportunity to, rethink the classical pricing and fencing with, fare filing and move towards a more flexible approach to reflect booking and the travel context, of our of our customer.

Thank you. So, if, we can continue with some of the questions that we have received from, from the audience, this discussion has been wonderful. Thank you, to the panelists. Let’s, let’s ask a few questions, while time allows, and and, then we can, wrap up. So I see, that we, received a question about, do you perceive any difficulties, particularly regarding the digital aspects of the dot com, and does it con contribute to enhancing dot com sales?

I’ll I’ll open it to the panel to see who wants to answer that one.

Maybe maybe I I I can get started. So, definitely, I would say that, there is a challenge, but that challenge is going to be airline specific.

And the first challenge is going to be the stack. So if you’re using a traditional Edifact IV, that by definition doesn’t work with continuous pricing, so there might need to be some adaptation that happens there.

But, definitely, in terms of the of the experience that the customers see when they come to the to the channel, it’s really, the dot com and the direct channels become our best price that we that we can that we can present. And we did observe that, as we presented more attractive prices in these channels, customers actually followed and and and these channels generated quite a bit of additional transactions. So there’s definitely a benefit, that you’re pairing your best price with the image of your company.

Thank you. So I I think that some of these questions came a bit earlier on, and and you you all touched on on some of the fare structure, details. Right? But, there was a couple of questions here that I’ll try to combine about whether, Lufthansa Group or Air Canada had to adjust their file fares based on the outcomes from continuous pricing. And, another attendee asked about whether there were any challenges recording the fare restrictions under continuous pricing.

Would anyone like to elaborate on that?

You want to take that one, You wanna let me do it? Okay.

I just have one Go ahead.

So, basically, for the filing, it’s true that the the the filing, the especially when it comes to the, the condition which are attached to the fares, not necessarily the the fare itself, are playing a role actually in the application of continuous pricing. So I wouldn’t say that we had to change it because as Anka mentioned it earlier, we already had actually kind of a lean, rules and and guidance actually to prices, what to apply. But it’s true that and I think I kinda mentioned it as a little bit earlier. The more complex you have your filing, and more the complex actually the application of of continuous pricing. So this is definitely something, to consider.

Yeah. Fully agreed on that. And I I will, just add again. I think, Sebastien, you you touched on it earlier, is think through how continuous pricing will be combined with other, discounts that you may have. You know, for us, it was NTPs, or corporate discounts. Just think these things through as you as you implement it. It will not necessarily change your fair filing process, but it does have an impact on the project.

Great. Thank you. I guess those one last question unless, you know, you’d have a as the audience members, you have a moment or two to to get one in at the end here. But, for the one submitted, they there was a question about the impact to the interline billing and settlement with continuous pricing.

Any takers on that one of who wants to address that?

I can maybe start, but probably I’ll I’ll I’ll ask a little cancer group to also chime in. So, if it comes to billing ice and settlement, I assume this is, between airlines who are talking about interline. So one of the, let’s say and and we skipped that question that we have on on on on the webinar, but, definitely, the the continuous pricing and the way that we deployed it is only applying to flights that are operated and marketed by your AC. At the moment, we don’t apply it to interline itineraries, so there’s no impact when it comes to the, to the to the clearance between between airlines.

And I would say if I can just simply maybe add a few thing on that, and I completely echo what, Lucio just mentioned.

We are having similar solutions. And at Canada, where we go space situation is lacking to involuntary situation when basically we do have fares which have been issued and need to be reissued involuntary and we involuntary reissue on other airlines.

Here, we have some few cases where bidding and sentiment actually there is an impact. That is where you need to negotiate actually with your, with your partners how you want to bill and you wanna settle actually this ticket that have been in rental because, obviously, these fares are not available actually in the traditional distribution systems.

And therefore, when it comes to the billing, you can end up into some very high bill, just because the negotiation actually was maybe not hundred percent thought through. So I would really recommend, to to consider that with with your partner, but it’s it’s a small part, let’s say, of the entire business.

Excellent. So, before we conclude, maybe if, if anyone wants to give, some commentary about how do you see continuous pricing evolving in the next three to five years?

Anything you can share?

Well, if you want, go ahead, mister.

Oh, thank you. So I I would say and and probably here you can expand the Sebastien. So, methodologically, I think that CP is maturing the legacy environment when it comes to your own flights. However, at the moment, we don’t have a solution that addresses interline.

So I think that, addressing that interline part would be part of that evolution. Of course, that requires more sophisticated technology such as bit price exchange and so on, but that is the the natural the natural evolution. And for airlines that heavily rely on on alliances or on interline, this is going to become an important part of, of the product at some point. But, definitely, I would say that it’s it’s a stable product, I would say, and it’s gonna be potentially the foundation of the right to flight in in the upcoming offer and orders world.

Sebastian, over to you.

I mean, I can just simply yes. I would say the same like what you just said. So it’s like it’s mature currently, difficult to, further improve, but we really do have some hopes and when, for often all the environment will be available, meaning, being completely not constrained anymore by legacy processes that we can really go one step further and not only the flights, you know, like what you’re optimizing today, but it’s flight plus other products and services. And I wouldn’t even talk about ancillary, but we need to talk about products and services. The flight becoming actually a product by itself like any other products. This is where the change can be really, happening. But for that, we need to be free of any constraint from the legacy.

Excellent. Well, that’s, small steps at a time, and and, this has been very insightful.

So with that, I think that brings us to the end of our discussion. And, I would like to ask you if you have any concluding statements, that that you would like to share with our participants, maybe, Air Canada first, then Lufthansa Group. And a huge thanks to to all of you for sharing your experiences and and, to to the audience for joining us today.

So, I think on our side, we’ll keep it short. So, first of all, thank you thank you everyone for joining the session. We’re very happy to, be here with and and we thank Prose for hosting this session. As airline industry, it’s important that we’re able to share our experiences.

There’s a lot of, there’s a lot of learning that can be done, by by exchanging with other airlines, participating in conferences, and so on. And we see this as sort of part of the learning from us to other airlines and from other airlines to us. The the questions were really helpful as well, on our side. So just would like to thank, everyone participating.

Yeah. Just to close it off, also for, Lufthansa Group.

Thanks a lot for the opportunity.

Even if some mentions and experiences, sound daunting, it is all worthwhile, and, it is the way to the future. So, good luck to everyone, in this journey. And, I believe the more we are on this way of offer, the better it is for the industry. So, thank you as well.

Great. Thank you, panelists, and and thank you, audience.

Again, I hope you found today’s session, insightful, useful, and and and, helpful. So if you have any follow-up questions, with pros or with our speakers, please feel free to reach out, after the webinar. Until next time, thanks, and and have a great rest of your day wherever you are.

Thank you.

Thank Thank you, everyone.

Thank you.

Goodbye. Bye bye.

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