Key Points from IATA's Financial Monitor - June-July 2011

  • Financial markets have now marked airlines’ share prices down 15% this year on economic concerns;?
  • Early results for Q2 airline profits are showing the first year-on-year decline for eight quarters;?
  • Jet fuel prices rebound above $130 a barrel, as supply concerns offset worries about economic outlook;?
  • Air travel volumes trending upwards at 4-5% annual pace, so far, but air freight markets have stagnated;?
  • Capacity has outpaced demand so passenger load factors are down 1% on the 2010 peak, freight by 4%;?
  • Passenger yields have still not recovered to pre-recession levels, outside the US, and gains are slowing;?
  • Start of Q3 challenged by economic worries, softer utilization rates and squeeze on margins from fuel.

All of these indicators place enormous importance on revenue management and capturing opportunity.

RM Expertise Africa

I'm happy to announce that we have opened an office in Capetown, South Africa, to represent RM Expertise in the African continental region.

Mr. Corné de Waal, who will represent us there, has experience with Intercape, the largest privately owned intercity passenger transport service in Southern Africa.

His passion is revenue management and he has presented at numerous Revenue Management and Pricing conferences and for the past 3 years has been a visiting speaker at the University of Stellenbosch (Cape Town/South Africa) to address their post graduate students from the Transport and Logistics department, on the topic of Revenue Management.

As everywhere in the world, the volume of pricing decisions in Africa has significantly increased as the travel industry moves towards deregulation and globalization. The service industry needs to respond to the market swiftly in order to remain competitive.


Revenue Management for Small Airlines

The airline industry is often thought of in terms of full-service carriers and low-cost carriers, but in reality it includes many types of carriers from regional, commuter, remote flying, to island hopping, to name a few.

The practice of revenue management was originally created by the full-service carriers to better compete with the low-cost carriers. Over time, the low-cost carriers have been evolving and to allow for growth, their service and product offerings have been increasing to a point where revenue management practices make perfect sense.

And, there still remain the thousands of small airlines in the world, who don't have sophisticated revenue management systems, but who would definitely benefit from customer segmentation, differential pricing, and inventory control.

In response to this, and in consideration of the high cost of in-house revenue management solutions and analytically skilled staff, we have formed RM Service Group. (www.rmservicegroup.com)

We offer a solution with outsourced revenue management services staffed with our own team of experts.