Air Transport World

To rein in those CRSs. (computer reservation systems)

Airline yield managers have a problem: The automated programs designed to maximize revenue work fine in their own reservation systems but not in travel-agent CRSs. Carriers want CRS vendors to do something about it.

The systems are variously labeled yield, revenue, capacity or inventory management. Ronald Woestemeyer, president of Seabrook Marketing, explains the name variance as follows: "Yield is like Kleenex for facial tissue. It's become generic."

Whatever they are called, the systems get high marks from numerous airline managers and analysts. Users claim 2-7% revenue increases. Aeronomics President Robert Cross suggests -4%, with the worldwide mean 2%." The size of increase depends on many factors: An airline's complexity of operation, the interrelationship with other airline departments and what might have happened if the old method-overbooking-by back-of-the-envelope-continued.

But to achieve such increases requires sophisticated forecasting of market behavior and control over seat sales. While some airlines exercise that control over their own res systems, managers have no such control over external sales. They are seeking the so-called seamless connection.

The depth of the problem varies. Airlines with hub-and-spoke networks, lots of competition, foreign-currency earnings or significant CRS sales need more-sophisticated booking controls. For example, British Airways, which increasingly is subject to competition and CRS sales and 40% rising-is a leading proponent of CRS changes. As part-owner of both GaMeo and Covia, it can exert pressure to that end.

BA says capacity management-its phrase for the discipline-has boosted revenues 6-7%. Liam Strong, formerly director of marketing and operations, says average yield on the Atlantic routes is significantly higher" than for other carriers. Strong, who left BA in September, was particularly pleased with economy class yield, where fewer differences exist between airlines. BA's deep-discount seats are only 10-20% of the total, he said, compared with 40-50% at other carriers.

But BA's primary success in yield revenue /performance was achieved at a time when it sold most tickets through its own reservations and distribution system. Travel-agent CRSs that are partially removed from direct airline control are taking over around the world.

As a result, BA is convinced it must protect its yields in external sales, too, by controlling, as much as possible, how many seats are sold, to whom and at what price. …

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