PERISHABLE ASSET REVENUE MANAGEMENT : INTEGRATED INTERNET MARKETING STRATEGIES FOR THE AIRLINES

This paper looks at ways to apply Perishable Asset Revenue Management (PARM) to airline operations, in particular, yield management and overbooking strategies, which airlines use to reduce losses due to empty seats, whose value "vanishes" as soon as the plane departs. Given all the constraints they operate under, the challenge is not just to simply sell seats, but to sell them at the right price to the right customer at the right time. The authors then propose the Integrated Internet Marketing (IIM) concept to achieve the PARM objectives. Advantages to airlines in using this concept are outlined as they affect pricing, inventory, promotion, distribution, customer relationship marketing, internal communications and data mining. The research also demonstrates the value of Internet-based shopping for airfares, which is especially valuable extremely close to departure time. This information is important to airline because a significant portion of their reduced revenues are derived from business travelers increasing their use of Internet shopping to secure lower ticket prices. Another element is the enhanced security taxes which now account for 25% of the typical low-cost ticket. IIM presents an opportunity to airlines to capture savings and practice PARM and also to reduce operational costs.

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00965013
  • Record Type: Publication
  • Source Agency: UC Berkeley Transportation Library
  • Files: BTRIS, TRIS
  • Created Date: Nov 3 2003 12:00AM