Join our
LinkedIn Group


Supplier Spotlight

Latest Videos

Testing the A350-1000’s cabin comfort

a350_1000_video

Operating as closely as possible to a typical airline trip, Airbus' A350-1000 Early Long Flight put the aircraft's cabin comfort to the test ahead of the launch of the aircraft. Joined by company test engineers, nearly 290 Airbus employees evaluated everything from the IFE system to the lavatories on the 12-hour flight, while a Virgin Atlantic cabin crew provided in-flight service

22 May, 2017


City of the Air 1964

air_1964_video

This charming 1964 film from the Rank Organisation is a snapshot of the 'golden age' of air travel in the UK's Heathrow Airport. Nostalgia fans will love the BOAC and BEA airplanes

19 May, 2017


The Poise seat concept by Tangerine

tangerine_video

The Poise economy class seat concept came together in just eight weeks to showcase the benefits of close collaboration between designers and suppliers. Poise rethinks the structure of the economy class seat to create extra legroom for every person, irrespective of where their seat is positioned relative to the seat track

15 May, 2017


Visit Our YouTube Channel

Read Latest Issue

Industry Opinion

« back to blog listings

Making the icing on the cake even sweeter

Flying is a privilege. Every time I watch the clouds fly by I consider myself extremely lucky. But the icing on the cake comes when the airline delivers a great experience, sometimes literally including icing on a cake.

Unfortunately many of our colleagues appreciate customer experience only as a cost center. For them, thicker icing only increases fuel burn, and putting sugar in a cake is akin to filling it with money. These costs exist, and designers must be mindful of them. But when it comes to the benefits side of the business case, product designers can be at a loss to explain why their thicker icing, whether in the form of a bespoke galley or amazing IFEC, will really boost the bottom line.

In this series of articles I am writing about how concepts in pricing and revenue management (PRM) can be used to help product designers. Check out my first article to read about why revenue managers can be the product designer’s best friends.

So how do PRM principles help specify the revenue side of the product and service business case? There are three channels.

Selling more seats
High standards help sell seats. Experiences make great collateral for pitches and marketing, and help seal valuable corporate deals. Unfortunately your budget holder will probably not say how many extra seats you will sell. But PRM specialists are always hungry to understand demand drivers, so reach out to them to find out more. Tell your PRM friends about when products changed and ask if they can find the impact on historical seat factors (remember to control for schedule and connection changes). Digging deep enough will reveal benchmarks that prove product enhancements sell more seats and form the first part of the product revenue case.

Achieving higher fares
Your budget holder rightly knows that most passengers buy tickets based on the cheapest fare. But PRM specialists also know which passengers are less price sensitive. Speak to PRM experts about identifying these market segments and consider increasing fares to cover product costs. A few extra dollars for a small but significant segment all add up and can make a product enhancement profitable. This is part two of the product revenue case.

Improving the inventory mix
Higher demand will force a revenue optimizer to upsell some seats at higher fares, especially on flights forecast to be heavily booked. Speak to your PRM analysts to understand how product-driven demand increments will improve the mix of inventory sold and take the results to your budget holder as the third part of a product revenue case.

Multiplier effect
Don’t forget that each of these channels multiply together, so the whole is greater than the sum of its parts. More seats sold, each at higher fares and aggregating to an improved inventory mix, provide a nice little boost that will raise smiles, even with the strictest bean counters. This is the final component of the product revenue case.

Coming soon: how demand influences your LOPA; customer profiling and market segmentation; and the forgotten case for intercontinental first class!

Oliver Ranson is the founder of Ranson Pricing. Oliver was educated at LSE, where he took a First and then a Masters in economics. The rigorous microeconomics grounding that he received at LSE formed the basis of his passion for pricing.

After graduating Oliver joined leading consultancy Analysys, where he helped a mobile phone network operator justify their prices in front of their local regulator and conducted research for the European Commission.

He then moved to revenue management at Qatar Airways, creating from scratch the strategy framework and tools necessary for the airline to completely redefine their pricing. Before founding Ranson Pricing he was head of product research at Qatar Airways, where he applied his deep understanding of pricing concepts to investigate how product enhancements drive revenue.

Oliver believes that effective pricing based on both rigorous analysis and sound intuition is the key to long-term profitability.

 

6 January 2017

Comments:

There are currently no comments.

If you would like to post a comment about this blog, please click here.
Read Latest Issue

Read Latest Issue

Web Exclusives

Supersonic passenger flight is on the brink of a rebirth. Air travel has evolved massively since Concorde’s day, so what will the world’s fastest and most expensive passenger experience bring?
Click here to read more

Human-machine interface technology is advancing to be more intuitive and to integrate seamlessly into overall cabin concepts in order to to meet the changing demands of aircraft interior design  
Click here to read more

APEX is embracing the digital content ecosystem as it adopts DECE’s Common Format as ‘the single deliverable format for all IFEC uses’
Click here to read more

United Airlines wanted the seemingly impossible for its new business class: greater sleep comfort and direct aisle access without losing seat density. Aircraft Interiors International attended the preview event of Polaris, one of the biggest business class seating projects ever, to get the full story
Click here to read more

A single inflight wi-fi access point might need to connect to more than 100 client devices, ranging from first-generation smart phones to the latest two stream 802.11ac laptops and tablets. Let's consider the importance of successful and reliable connections, and network security
Click here to read more


Supplier Spotlight

Supplier SpotlightClick here for listings and information on leading suppliers covering all aspects of the aircraft interiors industry. Want to see your company included? Contact simon.hughes@ukimediaevents.com for more details.

فروشگاه اینترنتی فروشگاه اینترنتی سیستم همکاری در فروش ماهواره جیبی اندروید کانال تلگرام چت روم دانلود فیلم

Submit your industry opinion

Industry BlogDo you have an opinion you'd like to share with the aircraft interiors community? Good or bad, we'd like to hear your views and opinions on the leading issues shaping the industry. Share your comments by sending up to 500 words to adam.gavine@ukimediaevents.com

Submit Your Recruitment Ad

Recruitment AdTo send us your recruitment advertising or to receive information on placing a banner please email simon.hughes@ukimediaevents.com