Amadeus Provides Alaska Airlines with New Revenue Forecast Model
As airlines address dramatic changes in passenger demand and scheduling, an adaptable revenue management system is essential to effective business recovery. In that context, Alaska Airlines has become the first airline in the world to implement Amadeus' revenue management solution as a non-Altéa passenger service system carrier.
With its superior data quality, demand forecasting and scalability, the Amadeus Revenue Management solution will enable Alaska Airlines to optimize business processes and better understand customer behavior, improving revenue performance. It will also allow better alignment with commercial practices to navigate the new normal.
Additionally, Alaska Airlines is among the first airlines in the world to benefit from a new revenue forecast model created by Amadeus - Active Forecast Adjustment (AFA), which helps airlines adapt their revenue management systems to fluctuating air travel demand.
When Alaska Airlines began deploying Amadeus Segment Revenue Management, little did the two companies know that there would be a bigger challenge to overcome. In fact, in the midst of implementation, COVID-19 travel bans were issued around the world. Because revenue management solutions traditionally rely heavily on historical data to create forecast models, the crisis made the historical data suddenly irrelevant. As a result, Amadeus researchers created a new forecast model to capture the most up-to-date demand patterns. Unlike the previous model, AFA automatically adjusts forecasts across all departure dates based on the latest live sales data. With the uncertainty of future demand, airlines need a forecast model that ensures rapid reaction to market changes, increasing forecast adaptivity while retaining robustness and stability.
Despite the enormity of the disruption to operations, the Alaska Airlines and Amadeus teams achieved an on-time implementation of a new revenue management system ready to meet the new challenges of passenger travel and accelerate the path to recovery.
"When travel volumes significantly changed, we had to adjust quickly on revenue management. The implementation remained on schedule even as we changed course and conducted what is typically weeks of hands-on training, in a remote environment,” said Kevin Ger, vice president, revenue management, Alaska Airlines. “The Amadeus revenue management solution with the new forecast model will enable us to be more flexible and agile in monitoring changing market developments and the variance between planned scenarios versus real passenger behavior. This is critical for us to quickly adapt and evolve our commercial strategies."
"Whether it was creating a new solution for unexpected and drastic market changes, or adapting our training methods to accommodate stay-at-home orders, our teams haven’t missed a beat,” said Elena Avila, executive vice president, airlines, Americas, Amadeus. “This has been a highly strategic deployment to demonstrate that any airline with any passenger service system can benefit from the advantages of Amadeus’ revenue management solution. We look forward to continued collaboration with Alaska Airlines on its path to recovery.”
The revenue management system is in operation now, and the AFA functionality will launch in Q4 2020 and will be available for Alaska Airlines and our 35+ Revenue Management customers globally.
