Cargo revenue optimisation

Long a cornerstone of passenger airline strategy, revenue management has yet to be embraced by the cargo, freight and shipping establishment. While the business problems of maximising cargo profit differ from passenger airlines in circumstance, the business model contains numerous parallels. Cargo revenue management has come of age and, with automation, is now equipped to deal with the challenges associated with profit optimisation. But profit maximisation also requires a willingness to address fundamental issues such as cargo product definition, contract pricing, short–term booking controls and medium–term allocations, among others. In discussing specific system and business–process solutions, this paper confirms the imperative that cargo carriers must adopt revenue management or face the consequences of revenue opportunity loss and being competitively disadvantaged.