Hapag Lloyd Express (now TUIfly) as a subsidiary of TUI AG is a good example of a low-cost airline realizing early that increasing complexity in distribution and revenue management require a system capable of providing much higher performance. The managers at HLX knew, on the one hand, that the demands of the parent company TUI would require a hybrid business model. On the other hand, they were already well aware of the typical weaknesses and limitations of conventional distribution and revenue management systems.
HLX started with a 100% low-cost model in 2002. A hybrid business model means it now fulfils all criteria for increased complexity in revenue management.
The critical success factors for managing the complexity can be summarized by the key words “integration” and “automation” of processes and workflow.
To achieve this, PROLOGIS designed and developed on behalf of HLX an integrated revenue management system that can be described as follows:
- A seamless workflow between the RMS and the distribution system in which AUs (Authorized Units), bookings and PNRs are exchanged constantly. For its distribution system, hlx implemented NewSkies (by Navitaire) to manage all bookings coming in over the internet, Amadeus and the TUI booking systems. Last year hlx was the very first carrier in Europe which PROLOGIS helped to migrate from OpenSkies to NewSkies.
- The RMS contains cost-related data from a route calculation system that assigns direct operating costs to each individual route. It contains forecast booking curves rather than budget values. This means revenue managers can take contribution margins into consideration by route, flight and passenger when making their decisions on yield.
- The RMS also loads market-related and competitive data and allocates that information to specific flights and routes.
- Based on bookings, the RMS generates a customer database that provides a basis for customer relationship management and marketing.
- The RMS provides all departments responsible for yield, routes, marketing and CRM with detailed reports.