In an industry where the value of unsold seats vanishes into thin air the moment a flight departs, revenue management (RM) has always been a high-stakes balancing act for airlines. Since its beginnings more than 50 years ago, RM has aimed to match prices
to passenger demand—ensuring that each seat sold contributes as much as possible to the bottom line.
At the turn of the third millennium, the arrival of low-cost carriers reshaped this landscape, introducing unbundled fares and more dynamic,
last-minute price adjustments. Over time, disruptions like 9/11, the global financial crisis and the COVID-19 pandemic exposed the limits of traditional class-based forecasting models and reinforced the need for more flexible, data-driven strategies.
Today, airlines face a new reality: Fixed costs are largely unavoidable, but margins are razor-thin, typically hovering between 3% and 5%, according to the International Air Transport Association (IATA). Against this backdrop, even modest
improvements in forecasting accuracy and pricing decisions can create significant competitive advantage.
This report, produced by PhocusWire in association with
PROS, explores the role of artificial intelligence in airline retailing as the industry moves toward offer and order management and adopts more flexible, customer-centric
strategies like continuous pricing.
The full report is available below or to download here.