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Spoilage Management

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Systematic use of revenue management tactics and tools represents an important way of achieving the maximum revenue from a fixed number of seats. To obtain maximum revenue from a given capacity, you will need to reduce potential spoilage to the lowest possible level and thus avoid:

  • Loss of revenue due to no-shows or passengers on full flights who cancel at short notice
  • Loss of revenue caused by offering fares that exceed market conditions. This in turn, results in underperforming flights with a significant number of empty seats
  • Loss of revenue caused by rejecting high yield customers, due to overselling at discount rates. This too results in underperforming flights as not enough seats are available to accommodate your high-yield passengers who book with short lead times.

While some of these topics can be covered with the forecasting support of a state-of-the-art revenue management application, calibrating the system often depends on human analysis and definition. Furthermore, you will need to evaluate the cost-benefit ratio between an efficient overbooking policy and incurring the costs of compensation and re-booking passengers who can no longer be accommodated due to overbooking.

We will work closely with your staff on analyzing your historic business data and market environment, project it onto the future business in proven qualitative and quantitative terms and thus ensure that each and every flight generates the highest possible revenue.

If you would like more information or have any questions, please feel free to contact us!