Synchrona developed a low cost revenue management system for small airlines.

Revenue management is of paramount importance to airlines. The first step is to introduce booking classes and set booking limits to each of those classes. This already results in significant revenue improvement, some 7-10% over "first come - first serve" is likely. In revenue management terms this is called the "Fixed Threshold" method.

A next level is to manipulate these booking limits. The classic way is to develop a forecast for each fare level and distribute the seats according to the so called EMSR-method (Expected Marginal Seat Revenue) on a flight-leg level. Introducing such system leads to another 4-8% revenue increase.

Beyond that there are several methods to optimize revenue on the network level. These so-called O&D systems (Origin & Destination) are resulting in an additional 2-4% of revenue, provided that there is considerable through the hub (connecting) traffic.

The high end EMSR systems and the O&D systems have two things in common: they are complex and expensive. Therefore they are less suitable for smaller, regional airlines: they are just an overkill.

Synchrona set out to fill that gap at the lower end with a simple EMSR-based revenue management system. It applies a simple forecasting and demand distribution model to drive the EMSR seat distribution algorithms. The system can easily run on a PC and requires only simple booking data downloads. The system makes use of SAS® software. So a license of that software is required, but you can use that software for a wide range of other applications as well (planning, business reporting and so on).

For more information do not hesitate to contact us.