Feature of the Month
Germanwings Takes Off with SkyPrice Pricing Optimization Services
Navitaire is pleased to announce that Germanwings, a leading low-cost carrier based in Germany, has just launched SkyPriceTM, Navitaire's new hosted pricing optimization services. SkyPrice is an industry exclusive, next generation revenue management system for airlines, specifically designed to allow both low-fare airlines, and airlines that compete with low-fare airlines, to maximize revenue in today's low-fare environments. With the SkyPrice installation complete, Germanwings leads the industry by selecting the only pricing optimization based revenue management solution for airlines.
How Can Simplified Fares Be More Complex?
SkyPrice provides low-fare airlines using simplified 'no-fences' pricing structures with optimization tools to effectively manage their fares and inventory. When fare restrictions such as Saturday night stays and advance purchase requirements are removed, carriers can no longer segment leisure versus business demand, and must rely on their revenue management tools to estimate price sensitivity to develop seat allocation recommendations. Traditional revenue management systems were never designed to perform this more complex business problem. These traditional systems depend upon standard fare rules to segment travelers by automatically removing lower fare classes from sale as the departure date nears to ensure higher prices for last minute bookings. With no fare rules to enforce these system assumptions, traditional airline revenue management tools rapidly lose their effectiveness.
The SkyPrice Solution
SkyPrice addresses the new revenue management ‘problems' created by fare simplification with advanced science to simultaneously optimize price and inventory levels. The result is both an optimal price level as well as fare class authorizations levels which maximize revenue. With the prevalence of low-fares in many highly competitive markets, the ability to concurrently solve multiple variables and constraints using current and historical booking data is crucial. SkyPrice also offers the option to use a standard interface file to factor competitive airline prices into the price sensitivity calculation if desired.
A Strong Team Driving the Design
Germanwings and Navitaire worked closely during both the proof-of-concept and throughout the development and launch of SkyPrice. The collaboration between the teams has created a highly sophisticated product coupled with practical usability features which delivers high-performance results.
"In the highly competitive European environment with mature low-fare airlines, Germanwings is keenly focused on the benefits that price optimization can deliver," said Barbara Vega, Navitaire's director of revenue products. "With fares as low as 19Euro - there is little margin for error on pricing and seat authorizations in order to achieve an overall profit." She continued, "Germanwings has done a remarkable job managing this complex process to date, and SkyPrice will greatly enhance their capabilities using the power and speed of sophisticated optimization science."
What About Airlines with Mixed Fare Environments? Stay tuned!
SkyPrice is a perfect solution for airlines operating in predominately or exclusively low-fare simplified fare environments, however, many airlines in Australasia and the Americas face a mixture of traditional fare and simplified low-fare structure markets. We're pleased to announce that Navitaire's next SkyPrice release will target airlines with a combination of both restricted and unrestricted fare markets to specifically address this growing need. We believe this next release will be another innovative Navitaire optimization solution ‘first' to bring to market.
Germanwings Leads the Way - with More to Follow
Navitaire currently has two additional carriers in installation for SkyPrice, and has received high interest from additional low-fare and traditional carriers alike. We welcome the opportunity to share more about the value that SkyPrice can provide for your airline.
Want to Learn More? Navitaire's Coming to a Neighborhood Near You!
We look forward to an opportunity to share more information about SkyPrice, and hope to see you at one of our upcoming venues:
- Navitaire will host a special revenue management workshop on September 14th in Amsterdam as part of the Low Fare Airline Congress
- Come see us in booths 20 & 21 at the Low Fare Airline Congress in Amsterdam - Sept 15th and 16th if you can't make it to the special workshop day
- We'll also be in Dublin, Ireland for the IATA Revenue Management & Pricing Conference - Oct 11th to 13th
- As always, we're available via the Navitaire website