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Skip to 0 minutes and 16 secondsHi Bill Hi Christophe Is there a fourth mistake that could help us to some improvements. Well, I don't know. Probably in the hallways of the operations research departments of a major airline somebody has already figured out what the fourth mistake is and is busy fixing it. But if I were to make a guess the next big step will be to push the information from the revenue management system into the scheduling. Because three months out, you have to decide the schedules. And you should decide the schedules to put the airplanes with the bigger number of seats in the places where the discounts were not very big, where the last fare you sold was a pretty high fare.

Skip to 0 minutes and 54 secondsBecause that's where the underlying demand is. Because today when you look at the flights they're all full you don't know where to put the big airplanes and the little airplanes. So you should be putting the big airplanes with the going discount, the flights with the going discount at the highest. And the little airplanes with the flights for the going discount are the lowest. So we push that information back into the scheduling process and then ideally back into the fleet planning process. So I would say the fourth mistake, if it's a mistake, is that revenue management and the pricing management that goes with it, pushes information back into the schedule planning and fleet planning.

Skip to 1 minute and 29 secondsLong time in advance and try to fit the planning in advance. Use the day to day information accumulated over the year and use that information to re-cut your schedules once a month and re-cut your fleet once a year. Thank you very much, Bill. Polite applause…

Business talk: the future of RM in the airline industry

Will there be a “fourth mistake” that will, as for the first 3 big mistakes, improve the revenue management in the airline industry? How will revenue management evolve in that pioneering sector?

In this short video, Bill Swan proposes his vision towards a better approach of revenue management in the airline industry.

He suggests the cooperation of the revenue management operations with another operational branch. Can you guess which one?

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In response to the question above, share your interpretation of Bill Swan’s explanations.

William “Bill” Swan is Chief Economist for Seabury-Airline Planning Group.

Previously and for many years, he was Chief Economist for Boeing Commercial Airplanes. He has worked for United and American Airlines in operations research and strategic planning. He holds a PhD in Transport Systems from MIT. He has been a researcher, an economist and an expert in air transport for many years. He has been one of the early revenue management developers and has followed the evolution of revenue management in air transport since the 70s.

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This video is from the free online course:

Manage Your Prices: an Introduction to Pricing Strategy and Revenue Management

École Nationale de l'Aviation Civile

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