When it comes to overbooking, multiple positions, various debates, arguments, and strategies surface, all of which hold validity. However, two undeniable truths persist: Overbooking exists, and airlines are not likely to cease this practice. With this acknowledgment, the need becomes abundantly clear: we require strategies to render overbooking efficient for airlines while safeguarding the customer experience from harm.
Ok. The challenge is clear, but how do we make it happen? Easy, with OVBO.
OVBO is an innovative revenue management tool that takes the most from edge AI, big data, and web cloud technologies to provide accurate boarding forecasts for overbooking. OVBO works plug & play for Navitaire and Radixx and It’s the result of a partnership between FlywareLabs and Tarmac that made OVBO possible through Engineering experience; Data Science; RM know-how; and Consultancy Services.
The Challenge
To amplify the challenge described in the introduction, we present the challenges we’ve identified regarding the overbooking strategy, which revolve around these pain points:
- Denied boarding incidents can lead to negative PR, customer dissatisfaction, airline staff frustration, and costly compensation payments.
- Unpredictable passenger no-show behavior makes it difficult to manage overbooking and balance both revenue and customer satisfaction.
- Airlines face significant revenue loss due to conservative overbooking strategies that result in unsold seats.
Technology
Those challenges aren’t easy to tackle, that’s when innovation steps in. Our technology helps RM teams to automatically optimize their overbooking strategy and stay focused on the core RM business. There are three key aspects of how this technology works:
- Efficient: Our AI Algorithm predicts each PAX no-show probability so we can recommend an optimal lid for each flight.
- Automatic: Fully integrated with the PSS to provide a proactive recommendation daily.
- Flexible: RM teams can customize business rules to adapt OVBO to markets and business requirements
How it works
Now yes, taking that into account we can explain how the tool works:
- OVBO process and store the airline data from the PSS
- Based on flown data, OVBO train an AI algorithm to predict future no-show
- The algorithm predicts every PAX probability of no-show for all upcoming flights
- OVBO sends the lid recommendation directly to the PSS
- Based on the RM analyst inputs in our UI, OVBO generates an optimal lid recommendation for every flight
Numbers speak for themselves
The results manifest swiftly following the implementation of the tool. However, it’s crucial to note that when we mention “results,” there are various ways to track them. This is because there are economic objectives that can be attained, but there are also objectives centered on customer experience, which are sometimes invaluable.
OVBO’ s error distribution is clearly lower than the one with a traditional approach.
And if these are not the numbers that you were waiting for, we have good news, OVBO can increase your RASK by 3%.
In conclusion and to respond to the title of the article… Nowadays the power behind a successful overbooking strategy remains in how you use technology in your favor. The good news is that now, you can rely on our hands, and in OVBO to do the correct use of technology. So don’t doubt it, get in touch and boost your overbooking strategy to the next level.