Revenue management is the process by which an airline distributes seats across price levels in order to maximise total revenue on a flight.
Revenue management is the process by which an airline distributes seats across price levels in order to maximise total revenue on a flight.
Also called: Yield management.
How it works#
The system continuously opens and closes fare classes based on demand forecasts, bookings to date and proximity to departure. Several things travellers read as random follow from it: prices rising and falling the same day, an empty flight staying expensive, and award seats vanishing for no visible reason. There is consequently no universal best time to book, only probabilities per market.
Not to be confused with#
Revenue management is not the same as personalised pricing: what is managed is inventory per price level, not an individual price for a particular person.
In German#
The German term is Ertragssteuerung. German version of this term
Related terms#
- Fare class: A fare class is the single letter on a ticket that identifies the fare and decides mileage earning, change rights and upgrade eligibility.
- Award availability: Award availability is the number of seats an airline releases on a given flight for redemption with miles, which is usually far smaller than the number of seats still on sale.
- Load factor: Load factor is the share of available seats that have been sold, measuring how full a flight or a network is.
Articles that use this term#
TopicEvery article and term onBooking and flight search.