Report

Teaser, summary, work performed and final results

Periodic Reporting for period 1 - AIRM (A Novel Bottom-Up Sales Channel Between Travelers and Airlines)

Teaser

It is of paramount importance for airlines to fill their seats. This leads to a more efficient use of resources, with positive financial, operational and ecological impacts. But the current paradigm is top-down: airlines estimate the future demand for a flight and continuously...

Summary

It is of paramount importance for airlines to fill their seats. This leads to a more efficient use of resources, with positive financial, operational and ecological impacts. But the current paradigm is top-down: airlines estimate the future demand for a flight and continuously monitor the price according to the flight’s occupancy, without the view of the real demand from travelers.
We propose to improve this model by introducing a novel bottom-up channel from travelers to airlines. Travelers will be able to place a bid on a seat, and Airlines will have access to these bids. They may accept a bid and thus immediately increase the occupancy of a flight, without the need for continuous fare readjustment. This would deeply change the dynamics of the market, providing airlines with real-time information about the demand. Our ultimate goal is to improve revenue management and increase occupancy rates.

Work performed

According to our study, many airlines are interested by a novel bottom-up sales channel with bids from travelers, mainly to better fill the under-loaded flights during the low or medium season. We have focused our work on the different technical solutions to implement this new solution, and we have succeeded to define an achievable model with the existing technical constraints. Our solution is simple, profitable, and matches our goal to improve revenue management.

Final results

The main impact of our project is to increase the average occupancy rate of the flights, leading to a better use of resources in order to limit the ecological impact of each traveler. The project has also a positive impact for airlines by improving their revenue and for travelers by saving money. For Option Way, this project is an opportunity to growth and develop our business.

Website & more info

More info: http://www.optionway.com.