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New Generation Inventory

New Generation Inventory. Jean-Michel Sauvage Software Development Unit Manager AGIFORS Conference, Berlin 17 April 2002. Outlines. Overview System Feeds Revenue management features Class control Revenue buckets control O-D control Cross-cabin control Cross-flight control. Overview.

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New Generation Inventory

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  1. New Generation Inventory Jean-Michel Sauvage Software Development Unit Manager AGIFORS Conference, Berlin 17 April 2002

  2. Outlines • Overview • System • Feeds • Revenue management features • Class control • Revenue buckets control • O-D control • Cross-cabin control • Cross-flight control

  3. Overview NGI • Benefits from a community system • Implements private availability calculation algorithms • Leaves airlines responsible for optimization • Provides generic interface for use with different optimizing systems • Is independent from PNRs

  4. SchedulePlanning Other Airline GDSE-Commerce Operations Seat Map Request Seat Reservation Dynamic Availability Interactive sell Optimizing System ATO / CTOTravel Agent Overview:System Overview Amadeus System Airline System Reservation system NGI SSIM Schedule Flight Schedules N/AVS Inventory N/AVS Yield PNRs Seat NGD

  5. Overview:System Feeds • From airline to inventory • Inventory controls (booking limits, nesting) • Inventory classes subdivision (POS, code-share) • Overbooking controls • Yields • Bid-prices • Revenue buckets (discrete EMSR curve) • From inventory to airline • Scheduled full and partial inventory dumps • On request ad-hoc flight inventory

  6. Revenue Management Features: Booking Class Control • various criteria divide inventory’s booking classes Example: YY9762 class B divided in: B1= (class B sold in US or in PAR)or(B sold in SIN and under flight# XX25) B2= all other B class bookings • Classes and subclasses can be nested • Standard min/max/booking limits inventory controls

  7. Cabin Capacity Yield AV04 Y4 AV03 Y3 AV02 Y2 AV01 Y1 Seats Y0 Revenue Management Features: Revenue Buckets Control • No fix relationship between fare class and revenue • Set of “revenue buckets” {Bi} assigned on leg/cabins • {Bi} represent discrete approximation of EMSR curve At t = 0, Bi defined by: • Initial availability AV0i • Yield range Yi-1Yi

  8. AV04 Yield AV14 AV03 AV13 AV02 AV12 Seats Revenue Management Features: Revenue Buckets Control • Sell activity’s yield estimated and mapped in a bucket • E.g. • n bookings at yield y  bucket B3 ,Overbooking is 20% B3 now defined by: • Initial availability AV03 • Yield range Y2Y3 • Current availability AV13

  9. Revenue Management Features: Revenue Buckets Control • Compared to standard bid-price inventory control AV04 Yield Yield AV14 AV14 AV13 AV03 AV13 AV’12 AV02 AV12 AV12 Seats Seats

  10. Revenue Management Features: Revenue Buckets Control • Brings flexibility • Can behave exactly as standard bid-price control • Possible choice to always sell in lowest bucket • Needs less re-optimization than bid-price/gradient inventory control • Flexible algorithms left open to airlines for dynamics: • Where does bucket overflow go • Where does bookings cancel get counted

  11. Revenue Management Features:O-D Control • O-D sell activity estimated : O-D Yield (YOD) • Yield contribution deduced on each leg i : Ci(YOD) • Without displacement costs: • With displacement costs using leg bid-prices: • Leg contribution mapped on each leg’s revenue buckets to find availability

  12. Revenue Management Features:O-D Control • O-D control • Is compliant with leg-EMSR optimization model • Is applicable even if parts of O-D have no buckets defined • Uses “real-time” or “static” bid-prices

  13. Yield Yield Yield Yield Business Extra potential space for Economy Economy Remaining cap. Physical cap. Revenue Management Features:Cross-cabin Nesting • Automatic access to another cabin’s available space when yields overlap

  14. Revenue Management Features:Cross-flight Nesting • Cross-flight nesting designed to be used for • “flow-forward” situation e.g. a frequent service on which business passengers booking the late flight and actually flying earlier afternoon flights. • “similar flights” situation Distinct similar services (same time) created to work-around with aircraft capacity restrictions.

  15. Revenue Management Features:Cross-flight Nesting • Cross-flight nesting • Works by defining a “range” of nested flights • Shares cabin capacities in a similar way to cross-cabin sharing • Can be combined with cross-cabin nesting

  16. Revenue Management Features:For the future • System infrastructure designed to handle • Piecemeal constructed O-D bookings • Alliance revenue management models • Customer based availability

  17. New Generation Inventory Jean-Michel Sauvage Software Development Unit Manager AGIFORS Conference, Berlin 17 April 2002

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