Airline and Revenue Management

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Airline management is an essential aspect of operating airlines and airports responsible for many aspects of the activity of airlines, including financial, informational, and operational supervision. The commercial side of airline management is especially complicated, so it requires another manager to supervise it, a revenue manager. With time, the circumstances of airline management have changed considerably, and more adjustments might anticipate managers in the future. This paper will summarize airline and revenue management, the issues they are facing, and their potential future.

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An airline manager’s work is multifaceted and concerned with many variables that determine the success of a given airline. Airline management includes such components as planning and scheduling, marketing, or product offering, and other aspects connected with them. There is also safety management that works to predict and prevent risks that may occur during airline operations, although this particular type of management is berated for being inaccurate (Chaves, 2019). However, risks accompany all aspects of airline management, especially financial risks, and careful steps are required to ensure the airline’s proper work. An airline manager should also consider constant alterations, for example, flight delays, weather conditions, and the human factor. The current situation would not probably affect a manager’s workload, despite some countries being unavailable, as the focus would be on maximizing efforts to make the most out of the scarce routes. Overall, airline management is a complex process that should consider many aspects and factors; it involves risks but also leads to success.

Revenue management is concerned with pricing and seat management as the means of generating revenue for an airline. A revenue manager is mostly responsible for setting prices and allocating seats that would lead to revenue maximization (Rose, 2016). According to Rose (2016), proper coordination in such areas as analysis, fare structure, policy and process, control environment, and RBD structure ensure maximized revenue. However, the work of revenue managers seems to be moving in the direction of forecasting, which would be split into calculating adjusted fares and bid-price calculation (Carrier and Figg, 2018). The change in their role would allow revenue managers to remain relevant in the age when technologies are able to execute the same job. It also remains to be seen if technologies can settle such issues as overbooking and overselling, which often accompany revenue management. In general, revenue managers focus on maximizing an airline’s revenue, although their function may be further adjusted in the future with the advance of technology.

It appears that airline management and revenue management may join forces as far as marketing is concerned. Prices are important in drawing customers, and a revenue manager should consider this point when setting prices and allocating seats. Cooperation between the two types of management would probably need to focus on calculating gains and profits and finding the best solution to maximize revenue without suffering many losses. A new subscription model might be one of the ways to tackle it, as it removes the need to constantly attract new customers and shifts the focus to maintaining existing customers (Sachin, 2016). Whether it will be more resource-consuming than the traditional model is unclear, although it might make the management work more long-term and allow better planning. Simultaneously, a subscription model would still have to be amended in case of situations such as Covid-19. Ultimately, both managements should work to make their airline appealing, customer-friendly, somewhat affordable, but still profitable.

The future of airline management is closely intertwined with the way airlines will operate in general. First, whether the information will be open and available may determine the way airlines will operate, but the implications are not black and white. As it has been stated, technologies can perform some of the manager’s tasks, and in the future, they might reach the level of development that may oust human managers. On the other hand, if privacy safety issues become more alarming, it may lead to an old-fashioned way of procuring and analyzing customers’ data. Additionally, airports might transform into something more than points of destination, and a manager’s work might involve making facilities appealing to customers (“The future of the airline industry,” 2017). More variables will, perhaps, influence an airline’s prosperity, and an airline manager, together with a revenue manager, will have to decide on what to invest. For example, if they invest in making facilities multifunctional and equipped with the recent technologies, will that justify higher prices? There will be many urgent questions for airline managers to consider in the future.

To summarize everything, airline and revenue managers perform vital tasks that sustain airlines. The management work is dynamic and should respond to any changes that may occur, as well as be ready for potential risks. Technologies greatly assist managers, but they might also replace them in the long run, so it is important for managers to offer new strategies and make their airlines both lucrative and safe. The future is uncertain and may go several ways, some of which will be beneficial for managers and some of which will complicate their work. Still, as managers are able to adapt to changes quickly nowadays, they might be able to do the same in the future.

References

Carrier, E., & Fiig, T. (2018). Special issue: Future of airline revenue management. Journal of Revenue and Pricing Management, 17, 45-47. Web.

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Chaves, F. (2019). Airline safety management system issues: a practitioner’s perspective. Aircraft Engineering and Aerospace Technology, 92(2), 117-127. Web.

Rose, P. (2016). A lifetime in airline revenue management. Journal of Revenue and Pricing Management, 15(3-4), 197-202. Web.

The future of the airline industry. (2017). Airlines. IATA. Web.

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BusinessEssay. 2022. "Airline and Revenue Management." May 31, 2022. https://business-essay.com/airline-and-revenue-management/.

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