Fare in the Air

As a kid, I loved travelling in airplanes.  The process of getting to the airport, boarding a flight, meeting the airline crew was exciting to the mind of an 8-9 year old.  Once seated, I would look forward to what I viewed as the highlight of the journey – the Airline Meal!  I would anxiously look back where the meals would be stored and wait with bated breath to see what would be served.  I loved being given a choice of two, sometimes three (wow!)  options at serving time.  My mind would register in slow motion the entire process of being asked my choice followed by the steward picking out the tray, then adding a dinner roll (sometimes) and then setting it on my tray.  By far, this used to the best part of my trip!  Needless to say, I would devour the meal and sit back satisfied till the next surprise would show up.  And I happily ate every one of them!

With experience and exposure to food, I got more discerning of food choices and tastes. I have come to realize that airline food cannot compare with restaurant food. Of course, there is a huge difference between a freshly cooked meal and a pre-cooked one. However, I have to admit the excitement still lingers.  My favorite food items are the cheeses and the butters. Put in between a roll, the resulting sandwich is the best comfort food when you are so far away from home, in the middle of nowhere. I would like to see a hotter tea and coffee beverage, though. These for some reason are almost always lukewarm.  The foodie in me also wishes for green tea options or a cappuccino offering. 

In all fairness, some airlines do make an effort to make sure their meals across the board are above average.  Food is a major expense for the airlines and they are realizing that investing in it a little to satisfy the long haul passengers helps the bottom line.  Here’s a fun factoid on why airline meals taste the way they do.  Altitude apparently changes the taste of these pre-prepared meals, which are previously cooked and chilled.  

All in all, the kid in me still eagerly awaits the food cart for the “main entrée” that will accompany me while I catch up on a movie I’ve been meaning to watch (selections of which are incredible on some airlines, but that’s a discussion for another time!)

Do you have a favorite airline meal or a carrier whose meals are just delizioso?  What are your thoughts on the bento-style tray that we get served?

Charmi Ramchandani

Account Manager

You have worked here HOW long???

No, I don’t usually get asked quite in that tone of voice, but it seems in the current climate that it becomes more difficult to find people who have been with the same organisation for extended periods the way it was in the “old” days. This is strongly evident in the repeated services we offer for training new analysts.

Let’s face it, new blood is good. If you spend too long doing the same thing, it can get stale after a while. New faces bring new perspectives, new approaches and often new attitudes. It may sometimes take a while for these to come to the forefront, but they most likely will.

However, this must also be balanced against a wealth of experience held in the hands of the old timers. They know the people, the processes and the technology with which they have been dealing for years. They know who to go to when needed, what workarounds exist, and generally how to make things happen.

But my favourite training line usually brings horror to attendees’ faces: “What if you are hit by a bus tomorrow?” No, I am not being pessimistic, but accidents do happen. What happens to that wealth of information in the unlikely event of an accident? Your Business Processes, manuals and documentation most likely cover the strict guidelines, but seldom are the workarounds, the personal relationships, the tricks of the trade laid down for future generations.

Whether it is a formal training session, consulting interviews, or just a general client visit, getting feedback from everyone is always interesting. Sometimes it requires pointed questioning, at other times hypothetical scenarios, but in most cases, people want to share information. They may simply not have had the correct platform or reason for doing so. Sharing it with us reinforces our partnership, and in many cases we have acted as a type of repository for information which has enabled business continuity in unforeseen circumstances.

And acting as that repository also allows us insights which give us more ammunition when thinking about problem solving approaches. I like to think that over the years I have picked up a thing or two. Sometimes that little revelation from a year or two ago may trigger an approach which would otherwise have been missed. And if I hadn’t been there for that discussion a couple of years ago, I wouldn’t have heard it mentioned. Not documented, but mentioned, possibly over a coffee break or the dinner table.

This first day of January heralded the start of my 16^th year with Revenue Technology Services. I deal with new clients regularly, but am still in close contact with some of the same clients that I was on the day I first started. Their businesses have changed and evolved, as has ours, yet in the spirit of partnership, we continue to grow together.

Even 16 years later, I still look forward to meeting with the clients, as each visit brings something new. The interaction never becomes stale and even repetitive activities, such as training new analysts, still brings new information to light.

When chatting to Raja Kasilingam recently, one of the things I had to highlight was that although I have been here forever (and I am not our longest serving team member), each day still brings new challenges, seldom a dull moment, and I still enjoy coming to work.

So the answer to the opening question: “Far too long, but not long enough”

Real-Time Revenue Management

One of the things that we have been hearing a lot about lately is the ability for real-time optimization of a single departure or a group of departures.  This has many benefits for those departures that tend to get a significant number of bookings in the last few hours prior to departure – especially in the cargo and passenger rail industries.  The objectives of real-time revenue management are two-fold:

n  React with minimal latency to dynamically changing market conditions.

n  Especially useful when significant booking activity/schedule changes occur during the day and carriers cannot afford to wait for nightly file updates and processing

RTS is currently reviewing many options on how best to approach real-time revenue management.  One approach is:

n  The inventory control system senses change in booking activity and sends alerts to the revenue management application based on user defined thresholds, i.e., cancellations, bookings greater than projected demand, etc.

n  The revenue management application gets the latest booking, cancellation, schedule change data in real time from the central reservations system (inventory refresh) and automatically optimizes these departures and sends updated allocation levels back to the reservation system.

n  Two-way real time interface between the central reservation system and the revenue management application would need to be developed to facilitate dynamic data exchange between the systems.

The pros to implementing real-time revenue management consist of:

n  Boosts the bottom line by making optimal decisions based on real time information minimizing lost revenue opportunities.

n  Improves analyst productivity by reducing rework on a number of stale or invalid controls.

n  Automatically identifies departures that need to be re-optimized and eliminates the need for the analyst to continuously monitor changes in market conditions.

The downside of implementing the above is:

n  May not be worth the investment if market behavior is relatively stable and predictable

n  If thresholds are not defined accurately, it may lead to uncontrollable number of alerts being sent from the Central Reservation System to the revenue management application impacting performance.

We believe that the ultimate approach would be a combination of nightly processing and the ability for the system to send alerts so that the analyst can actively review those departures that are falling outside of the user defined threshold parameters.

RTS values your input and thoughts and the enhancements to our products.  Leave a comment and let us know your thoughts.

From all of us at RTS we want to wish you a very Merry Christmas and a Joyous New Year. 

Robert L. Harris, Jr.

Senior Solutions Consultant

Hyperloop

It is the latest buzzword in the travel and transportation industry where passengers can travel between 2 major cities which are less than 1000 miles apart within 30 minutes, at a speed close to 800 mph. Another one of Elon Musk’s newest inventions and an extremely powerful, practical one which has become a jaw dropper in the Travel and Transportation industry.  Existing conventional modes of transportation of people consists of four unique types: rail, road, water, and air. These modes of transport tend to be either relatively slow (i.e., road and water), expensive (i.e., air), or a combination of relatively slow and expensive (i.e., rail). Hyperloop is a new mode of transport that seeks to change this paradigm by being both fast and inexpensive for people and goods. A mode of transport that is a cross between the concorde, a rail gun and an air hockey table.

When it will become a reality is yet to be seen, but for now the authors are calling this an “Open Source Project”. It has an open design concept just like Linux did decades ago and is now a reality. The first version of this design involves passenger and the second will be passenger and vehicle.

In lines with the Hyperloop, a more comprehensive project is the Aqua=Terra T.W.I.N.S. (Trans-Web Infrastructure Network System) projects (aquaterraplanetaryholdings.us and invention.net/aquaterra) that not only provide for an advanced transportation system, it also includes a complete self-sustaining format that links, via sub-surface Tubes, land (Terra) and sea (Aqua) Stations to form an international / single-standard web system.

 We at RTS, love to research and analyze any new trends that will help companies in this space integrate profit optimization and revenue management into their existing business processes and systems. Since we work with both Passenger and Cargo, it is very exciting to learn about the specs that the Hyperloop has presented to enable them to make use of our wide product range.

The Hyperloop concept is the first of its kind to ever to be created and there is no doubt that above a very sophisticated software system/s that handle the data, visuals, reservation, financial, reporting, there is an important layer of software which is a profit enhancement system that will that make sure there is benefit and optimized use of the seats/cargo space within the Hyperloop.

Some questions that will linger on for now on our minds - What is the capacity? If it cannot meet the demand will the prices go up? Is there is a long wait time to use the Hyperloop pods, will people find themselves having to take an alternate mode of transport?

The move toward higher speed, better service, cheaper travel, and something less environmentally polluting, is going to happen — it's the wave of the future.

Deeshi Gandhi

Technical Manager

Ah - Blog Time Again!

Just what is a Blog? According to Wikipedia, it is “a discussion or informational site published on the World Wide Web and consisting of discrete entries ("posts") typically displayed in reverse chronological order”. It goes a little deeper in a subsequent paragraph to indicate “Many blogs provide commentary on a particular subject; others function as more personal online diaries; others function more as online brand advertising of a particular individual or company.” Since this is the Revenue Technology Services blog, this obviously fits quite nicely into the description of online brand advertising. However, the pertinent section here to my mind would be “commentary on a particular subject”.

Internally, we are all tasked on a rota system to come up with these blogs. After a few rounds, you would think that inspiration for new topics or ideas would be lacking. Yet it is surprising how this inspiration can typically come from nowhere. Personal blogs tend to range from the informative to the wild rant, but corporate blogs tend to focus more on the business itself. So as not to be too repetitive, when the baton is passed to me, I cast my eye back over previous blogs on our site. When doing so today, what I noticed was this: we have articles covering various aspects of our product line and functionality; we have articles discussing trends in technology; most importantly, we have a number of articles regarding our people.

In the many years I have been with RTS, our buzzline, catchphrase if you will, has always been “People, Processes, Technology”, and that is exactly the information we have been communicating. And communicating is the key. Through the entire implementation cycle, and into our ongoing client support activity, we stress communication.

•         During initial project planning, communication is key to ensuring both we and the client are on the same page regarding expectations as to which people are assigned, what processes will be adjusted, and what technology will be implemented or affected.
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•        During implementation, communications become even more crucial. Among project team members, it keeps all appraised of the status, progress and potential hurdles. As part of change management, good, continuous communication from the outset keeps all stakeholders aligned regarding how the business will adjust to the new functionality.
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•          During education sessions we stress the importance of communications, and that the RM team cannot effectively operate in a vacuum. Methods of information sharing are identified, and suggestions made for keeping all aware of what is going on within RM.
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•          After go-live, we pride ourselves on maintaining communications with clients, allowing us to garner feedback, understand their business and changes for which we may be able to offer advice.
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•          Our annual user summits allow for further, interactive communication between ourselves and clients, but additionally between clients, and prove very beneficial.

Even the rare negative feedback is still positive communication, as it helps us improve our People, Processes or Technology.

And there we close the loop. A blog is communication in a short(ish) chunk. It allows us to communicate with you, the audience, on a regular basis, giving an insight into who we are and how we think. So, how about “communicating” with us, to let us have your thoughts and feedback on this or any of our other blogs, and make this a truly 360 degree experience.

Jason Codd

VP Services

What exactly is in it for me? - Measuring the Value of a Revenue Management System

Every consumer wants to be reassured that their purchase is performing to the best of it’s ability and they are doing everything possible to maximize the utility of their investment.  Revenue Management departments at transportation companies globally are no exception to this. Though it is widely accepted in the airline and cruise ferry world that a Revenue Management System (RMS) can boost the top line, the challenge frequently encountered is in determining how significant these revenue benefits are.  So while the why and how Revenue Management can positively affect a company are taken for granted, by how much is a question that every Revenue Management manager spends many a sleepless night contemplating.   

Obviously, during the procurement process, an airline or cruise ferry will have to make the purchase based on empirical evidence and results reported by earlier adherent of RMS in order to justify their investment.  However each company has it’s own distinct operational and strategic objectives that impact revenue and so empirical results at other companies are understandably received with a bit of skepticism.  However, once an RMS has been deployed, companies have the opportunity to measure the value the system is providing. Savvy algorithms that strive to provide an indication of how much revenue opportunity has been realized through automation and optimization sciences are present in a number of sophisticated RM systems.  These models typically tend to simulate two scenarios – one with no or completely inoptimal revenue management – this reflects the worst case scenario. The second scenario is diametrically opposite to the first and is best case scenario that assumes that optimal revenue management principles have been employed. These models are typically run after the departure on historical data so the revenue minimization and maximization algorithms can be applied with the benefit of hindsight.  The third component used in these models is the easiest to compute as it is based on the actual observed results.  Using these statistics, supervisors get invaluable insight into the available revenue opportunity, the amount realized, and that unrealized due to various reasons including spoilage, dilution and overbooking.  Identifying and analyzing poorly performing departures along with associated causes can greatly help guide informed decisions on future departures as there exists the opportunity to learn from missteps of the past.

However, a word of caution is very much in order regarding these approaches to determine revenue performance.  As with any system, and especially in the case of a data intensive discipline like Revenue Management, the quality of the results is heavily dependent on the robustness and reliability of the input data. As the saying goes, Garbage in, Garbage out. So a great deal of care should be taken to ensure that the inputs are accurate and outliers are detected and ignored.  Supervisors should also be cognizant of some of the assumptions that these models make which may not totally reflect reality and also be wary that system recommendations may not be taking into account external factors that are invisible to the system. However, it is still possible to glean valuable inferences through intelligent analysis of the figures. It is also extremely important that the RM departments realize that the value of these exercises lies in learning from historical performance and any attempt to engage in a blame game where analysts are being targeted as reasons for less than satisfactory revenue performance in the past is not only unfair but obviously can be counter- productive.

How does your company quantify revenue benefits? Please share your experiences and thoughts with us.  If you require more insight into this process, please don’t hesitate to reach out to me at Pradeep.bandla@rtscorp.com. 

Pradeep Bandla

VP, Product Management and Marketing

Turn your customers into partners...

Partnership is one big mantra that I have learned over the years. It works everywhere.  It works at home. It works with my colleagues. And, of course it does magic with every customer I have worked together so far.  While developing and maintaining a partnership with customers is essential in every business, I find it to be lot more important and imperative when you provide innovative solutions, especially which involve analytical and scientific models. Practitioners and veterans in the industry oftentimes dismiss innovative solutions citing their longevity in terms of experience and expertise in that area of business and providing reasons such as lack of good data, uniqueness, and customer acceptance.  I have personally encountered these challenges when I first started working with experienced airline operations guys who have managed cargo capacities of flights for years.  Similar experience when I first worked with freight railroad operations planning folks who have worked on improving train performances. In both instances, developing partnerships at various levels tremendously helped me in gaining acceptance while successfully delivering innovative solutions.

Developing partnership with customers starts right from the time you make the first contact with the customer about how you can help the customer do things better and cheaper. It is about understanding their challenges and offering solutions that are mutually acceptable.  It is about being upfront and honest about what your capabilities are and only make the promises you can keep, be it functionality and quality of the solution, skill of the resources, time to implement, or after sales support.  It is a shared journey with compromises and tradeoffs to create a future for both you and your customer. It is about:  listening to your customers; involving them in your vision, strategy, and plans and maintaining ongoing communications on these items helps to forge it further; addressing and solving their problems completely; and developing personal relationships at all levels.

Creating a partnership with your customers has several benefits. We at RTS have seen it work and have experienced the benefits. Partnership creates a sense of ownership and accountability and turns naysayers into stakeholders by creating a common goal. Clearly, it helps to retain customers and get continued business from customers.  It helps to gain competitive advantage and drive growth. Your customers become your best advocates.  It assists in anticipating what the customer needs before even the customer knows it.  The end result is increased financial performance, enhanced customer satisfaction, and greater brand equity.

What does partnership mean to you? How do you execute it? Please share your experiences and thoughts with us.

Raja Kasilingam