AGIFORS 2001 Reservations and Yield Management Conference The Imperial Queens Park Hotel Bangkok, Th

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AGIFORS 2001 Reservations and Yield Management
Conference The Imperial Queens Park Hotel
Bangkok, Thailand May 8 11, 2001Leon
KinlochVP Domestic Pricing Revenue Management
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2
Why OD Doesnt Work
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3
Or A Funny Thing Happened On The Way To OD . . .
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We spent millions analyzing . . .
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5
And then we had to figure out how to get our
reservations/CRS Systems to support control our
new OD solutions . . .
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6
We invented multiple roads to OD control

• Stratify Fares
• Stratify fares less displacement cost
• Virtual buckets
• Real time bid price
• (The big one)

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Once you make your choice and you revel in your
brilliance . . .
Youre screwed !
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• The success of OD is based on three basic
  assumptions
• Seamless availability must never fail
• There must be honor among thieves
• Travel Agents will always be lazy

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9
Seamless Availability Must Never Fail
While we are in the 21st century, the systems
that we rely on are not. We fall back to AVS far
too often When the link is down, there is no OD
backup In codeshare relationships cascading or
other methods of OD information are
inconsistent and often too slow
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10
There Must Be Honor Among Thieves

• Sum of the locals faring bypasses OD control
• Enabled by our friendly neighborhood CRS
• Products such as best buy rebook ignore OD
• Finds unintended itineraries
• Applies pricing inconsistent with how inventory
  was sold

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11
(Human) Travel Agents Will Always Be Lazy

• While this will always be true, there is a new
  Phantom Menace
• The Internet
• It definitely is Not lazy
• Connection builders exploit gaping holes in OD
  control
• Overwhelms communications capabilities of GDS
  airlines, thus forcing more AVS-based answers.

Work Hard. Fly Right. SM
12
SABRE AVAILABILITY
26MAYSATMSY12N 26MAY SAT SAT/CDT
MSY/CDT0 692 F7 Y7 B7 H7 K7 M5 SATDFW 9 1155A
105P S80 0 DCA /E L0 Q0 V0 N0 1086 F5 Y7 B7
H7 K7 M5 MSY 7 217P 346P S80 0 DCA /E L0
Q0 V0 N0   26MAYSATDFW12N 26MAY SAT SAT/CDT
DFW/CDT0 692 F7 A7 Y7 B7 H7 SATDFW 9 1155A
105P S80 0 DCA /E K7 L7 M7 Q7 V7
N6   26MAYDFWMSY1P 26MAY SAT DFW/CDT
MSY/CDT0 1086 F5 A4 Y7 B7 H7 DFWMSY 7 217P
346P S80 0 DCA /E K7 L7 M7 Q6 V2 N1
OUTBOUND SOLD POINT TO POINT, RETURN SOLD AS
MARRIED SEGMENTS 1781Q 29MAY TMSYDFW SS1 827A
1009A /DCAA /E 1023Q 29MAY T DFWSATSS1 1107A
1222P /DCAA /E     WPTNlt (no taxes applied) 26MAY
DEPARTURE DATE-----LAST DAY TO PURCHASE 27APR
BASE FARE TAXES
TOTAL 1- USD186.04
9.00XF USD195.04ADT 186.04
9.00 195.04TTL   ADT-01
QRA14DNR SAT AA X/DFW AA MSY93.02QRA14DNR AA
X/DFW AA SAT93.02QRA14 DNR 186.04 END
XFDFW3MSY3DFW3 NO REFUND/CHG FEE USD 100 PLUS
FARE DIFF
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13
It Is Happening To You Example 1
When we asked for SAT-MSY Q
unavailable When we asked for SAT-DFW Q
available DFW-MSY Q available Price of combo
of local should have been 293.32 Unavailable
OD now prices at 195.04 You lose
98.28
Work Hard. Fly Right. SM
14
SABRE AVAILABILITY AS AGENCY
126MAYSANHKG CONST AT SFO ALLOW 40MIN PRKG 26MAY
SAT SAN/PDT HKG/15 2160 F5 Y9 B9 M9
SANSFO 7 1100A 1225P 733 0 DCA /E H9 Q9 V9 W9
S0 T0 K9 L9 G9 A4 805 F8 C9 D9 Y9 HKG 140P
700P1 744 L 0 DCA /E B0 M0 H0 Q0 V0 W0 S0
T0 K0 L0   126MAYSANSFO11A CONST AT SFO ALLOW
40MIN PRKG 26MAY SAT SAN/PDT
SFO/PDT0 2160 F3 A3 Y9 B9 M9 H9 SANSFO 7 1100A
1225P 733 0 DCA /E Q9 V9 W9 S9 T9 K9 L9 G9
  126MAYSFOHKG CONST AT SFO ALLOW 40MIN
PRKG 26MAY SAT SFO/PDT HKG/15 FOR MORE
AVAILABILITY SEE OAK SFO SJC 805 F8 C9 D9 Y9 B9
SFOHKG 140P 700P1 744 L 0 DCA /E M9 H9
Q9 V0 W0 S0 T0 K9 L9   FLIGHTS SOLD IN
SEPARATELY 2160M 26MAY J SANSFO SS1 1100A 1225P
/DCUA /E 805M 26MAY J SFOHKG SS1 140P 700P
27MAY S /DCUA /E   PRICED AT THRU FARE WPTN 26MAY
DEPARTURE DATE-----LAST DAY TO PURCHASE 10MAY
BASE FARE TAXES
TOTAL 1- USD919.00 3.00XF
USD922.00ADT 919.00 3.00
922.00TTL ADT-01 MKSO SAN UA X/SFO UA
HKG919.00MKSO NUC919.00END ROE1.00
SITI XFSAN3 NON-REF/SUPER-APEX
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15
It Is Happening To You - Example 2
When we ask for SAN-HKG M unavailable When
we ask for SAN-SFO M available SFO-HKG M
available Price of combo of local should have
been 1,055.02 Unavailable OD now prices
at 922.00 You lose 133.02
Work Hard. Fly Right. SM
16
SABRE AVAILABILITY AS AGENCY
24MAY-THU- ALTERNATE SERVICE 1636 A9 D9
F9 Y9 H9 MSYIAH 600A 708A M80 0 G032 9
K9 B9 V9 Q9 T9
L0 1716 A9 D9 F9 Y9 H9
AUS 740A 835A M80 0 T235 9 K9
B9 V9 Q9 T9
L0
24MAY-THU- SERVES EFD/HOU/IAH
ALTERNATE SERVICE 1636 A9 D9 F9 Y9
H9 MSYIAH 600A 708A M80 0 T108 9
K9 B9 V9 Q0 T0
L0 24MAY-THU-SERVES EFD/HOU/IAH
ALTERNATE SERVICE 1716 A9 D9 F9 Y9
H9 IAHAUS 740A 835A M80 0 T055 9
K9 B9 V9 Q1 T0
L0   FLIGHTS SOLD AS
MARRIED SEGMENT () CONNECTION 1636T 24MAY TH
MSYIAHSS1 600A 708A
1716T 24MAY TH IAHAUSSS1 740A 835A
  ITINERARY PRICES AS COMBINATION OF LOCAL
FARES 2MAY01

USD FARE
TAX-USD TAX-USD USD TTL

1 - 129.31 9.69 US
8.50 XT 147.50 TTL 129.31
9.69 8.50 147.50

1 - PSGR 1 ADT
24MAY01MSY HOU67.91T14ZN
AUS61.40T14ZN USD129.31END ZPMSY 2.75IAH2.75XT5.50
ZP XF3.00MSY3 V
S 1/ 2 NOT VALID BEFORE/AFTER 24MAY
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17
It Is Happening To You - Example 3
When we ask for MSY-AUS T available When
we ask for MSY-IAH T unavailable IAH-AUS
T unavailable Price of available OD should have
been 165.00 Unavailable combo of local
prices at 147.50 You lose
17.50
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18
Solutions

• Pricing systems relying on nearly 30 year old AVS
  assumptions need revamping
• Shotgun weddings?
• Price itineraries as sold?
• Pass bid price or minimum fare instead of class
  closures
• OD AVS?
• The son of The Big One?

Work Hard. Fly Right. SM