6
A Glimpse at Air Canada
200 Destinations 1800 Flights/day381 Aircraft
14.7B$ Revenue
45M pax
30,000 Employees Competitive
Landscape80th Anniversary
11
Creating a Global Champion
New Aircraft, Livery & onboard Product
787, 737 & C-series entering the fleetFuel efficiency, increased comfort & rangeInternational Business class & Premium EconomyBest in class customer journey
New Revenue Management Systems
PROS OD3 implementedPROS Availability ServerJourney Data & Point of Commencement
Leveraging our hubs
Significant International Capacity growthBuilding Toronto Pearson as global hubSpecialized hubs at Vancouver & MontréalPower 6th freedom growth
Alliance & Joint Venture
Founding member of Star AllianceA++ Joint venture
Air Canada Rouge
Leisure carrier flying to Europe in the summer and the Sun Markets in the winter
Customer Service
Building a global brandService ExcellenceSkyTrack Four Star CarrierCulture Change
13
From Leg to OD to POC
RM ODC
LEG RM
LEG RM
SBP
OD RM
POS
AVAIL
OD RM
POC
AVAIL
JDBuilding a connecting
network
Increasing LFs
& hub connectivity
at YYZAlign OD RM & Avail
with Customer
14
Benefits and Challenges of the O&D world
CHALLENGES
• Dual Organization Leg/OD
• Forecast Calibration & Accuracy
• Human factor
• Recruiting & Training
• Granularity
• Data, O&D Reporting & KPIs
BENEFITS:
• Daily pricing feed
• OD & Booking curve forecasting
• Local vs Connecting tradeoffs
• POS Fare differences
• Exchange rates & surcharges
• Network Optimization
• OD level availability adjustments
KEY LEARNINGS after 2 years of O&D RM
#1 Forecast is key, along with coordinated calibration @ network level
#2 Never underestimate Change Management & continuous training
#3 Well defined users’ workflows are a must
15
Reaching out to our customers
PROS OD3
PROS RTDP
PAV CLOUD
PSS
Business rulesBid-Prices
Daily Fares
GDS
OTAs
WEB
Call Centers
API
16
Modern Commerce in the Airline Industry:
Achieving consistency & alignment across
the entire commercial process to present
each customer with the offer that will allow
capturing his/her maximum WTP.
17
The need to go Beyond traditional RM
Unless presented as distinct offers adapted to each customer’s need and WTP, bundling
together selected attributes (seat, upgradability, amenities, flexibility…)
Dilution
RM
Perfect
average
value for the
next seat
Selling the exact same product simultaneously at 2 different prices is risky
WTP
Lost sale
18
Multi-dimensional Segmentation
Airlines’ responses are shaping-up to capture the entire WTP:
Branded Fares or Fare Families
• Launched by AC in 2005
• Simultaneous offer of different
products at different prices
• Target distinct demand segments
• Not requiring information on the
customer
Personalized offers
• Target each customer
individually with relevant
offers to improve
conversion rates
• Leverage CRM capabilities
• Understand the interest &
habits of individuals
• Estimate WTP based on
history of purchase
19
The key role of Distribution & E-commerce in
sustainable profitability
LanguageShopping
habits
Product Offer
Reaching out to more
customersCulture
Forms of payment
e-Devices
Airlines need to become fast, efficient and exact:
slow & approximative is not an option
• Air transportation has entered the era of
“e-everything”: shop, book, pay, change, check-in,
on-board purchase, connect, send feedback …
• The industry needs to modernize its distribution
processes & technologies to support this fast
transformation
• Create a seamless digital experience
consistent across channels
• It also requires adaptability to the customer’s
preferences and habits as we expand to serve
new countries & destinations and aim to reach
out to more customers
20
DISTRIBUTIONE-COMMERCE
SALES
A Seamless & Direct customer experience
across all channels & devices
REVENUE
MANAGEMENT Rethink how the
development of these
functionalities affects RM
techniques & user skills
Merchandizing
PAV Cloud
JD & POC
Obsolescence of caching
Trade education
NDC (AC 2006)
Merchandizing
Instant calendar search
Common platform for all devices
Optimal Itinerary display
21
… requires re-engineering revenue management
Packaging & discounting…
at what price?
• Optimal bundle pricing?
• Optimal discount?
• What is the value of integrating
ancillaries & branded fares in
the forecasting and
optimization processes?
• Intuitively, a continuous
demand curve would
suggest…
• Continuous Dynamic Pricing?
• Towards classless Revenue
Management?
Increase accuracy to be
more pro-active
• Update forecasts based on
advance booking trends
• Capture Customer Choice
• Integrate new data sources
predicting velocity and yield
spikes (Social Media, weather, news…)
+ +
22
We are very lucky to evolve in a
domain where advanced science
is intrinsically embedded in our
commercial practice.So we are in good hands