The move will help Scandinavian Airlines’ (SAS) counter the ‘buy-down effect’ generated from traditional revenue management practices.
MADRID, SPAIN – Following a strategic partnership established in 2013 that saw SAS’ highly experienced revenue management experts join Amadeus, the airline has now completed its migration to Amadeus Altea Revenue Management Suite. The migration lays the foundation for the most accurate and intelligent pricing of airline packages and offers.
As the airline industry looks to new merchandizing methods, such as dynamic pricing, fare families and ancillary service sales to increase revenue, it is crucial that revenue management processes are fit for purpose. Revenue management solutions play a significant role in providing recommendations on the best price and packaging of airline offers. Next-generation revenue management techniques are therefore critical for airlines seeking competitive advantage from merchandizing.
As a response to competition from low cost carriers and more transparent price-comparison tools, full-service airlines have increasingly adopted flexible fare structures. This business strategy challenges legacy revenue management systems, which forecast an increase in demand in low price booking classes and a decrease in high profit classes. This results in an inaccurate picture of consumer demand, as systems cannot adequately understand travelers that buy low price flight tickets, but still expect optional extras to add to their flight ticket. The Amadeus Altea Revenue Management Suite is specifically designed to overcome this phenomenon, known as the ‘buy-down effect’, which is the single biggest lost revenue opportunity for network airlines today, and to help airlines adequately respond to increased competitive pressure.
“Today, network airlines are suffering with complex revenue management IT solutions and the ‘buy-down effect’ when it comes to taking control of revenue,” said Tobias Jonsson, VP Revenue Management at SAS. “However, we are excited to be working with Amadeus on a solution which tackles these issues and is fully integrated with our other Altea systems.”
Jonsson continued, “Our migration to Amadeus Altea Revenue Management was completed seamlessly and lays the foundation for us to optimize the pricing of both flight and, in the future, ancillary services.”
“Amadeus is ideally placed to deliver this unique revenue management solution due to our ability to use more accurate and complete data drawn from the Amadeus Altea Suite, various other Amadeus and external sources, and a wide range of accurate, real time data from the airline itself,” said Julia Sattel, VP of Airline IT, Amadeus. “The end-to-end nature of the approach enables greater automation and means SAS will now be able to correctly price relevant offers for travellers, automatically registering when travelers are also purchasing ancillary services. This solution will support our vision for a truly traveler-centric global travel ecosystem.”
This cut over will enable Scandinavian Airlines to take advantage of a unique solution from Amadeus’ Airline IT portfolio, with a system that is built to withstand change and future growth, furthering its reputation as a leader in O&D revenue management. The highly automated system frees revenue management analysts to focus on activities that create further value for the airline and empowers them with user-friendly, real-time tools.
This migration follows a long-term strategic partnership between Amadeus and Scandinavian Airlines, signed in 2013, under which a groundbreaking ‘Centre of Competence’ was established. The agreement saw more than 20 SAS employees, many of whom were experts in the field of revenue management, join Amadeus to pave the way for future innovation that can benefit the entire Altea community.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
