Improving revenue through fare rationalization and a new business process between revenue management and sales

An airline's multi–class hierarchy fulfills a number of very important functions within the organisation. It can be a powerful strategic and tactical tool when used to address business process disconnects, especially between the Revenue Management/Pricing and Sales departments. This article describes a fare stratification process to address these issues, where the intent is to refocus the multi–class hierarchy in terms of network revenue priorities. The article also includes simulation results to substantiate the merits of this process improvement, and it reveals that Multi–class Fare Rationalisation must be an integral part of any network–wide organisational strategy that incorporates the overarching mission of revenue maximisation.