Synergizing RM science and airline distribution technologies: A pricing example

Distribution (‘Distribution’ is used to represent both inventory and fare distribution technologies) and revenue management (RM) are two very crucial functions of the airline industry. Although RM has evolved significantly over the past many years, distribution has not evolved as much. Major improvements to distribution are expected to take several years. RM is heavily dependent on data provided by distribution technologies. The lag in sophistication of data compared with RM science could be limiting the effectiveness of RM science. Small improvements to data may be more gainful than similar improvements to science. This article uses a hypothetical pricing example to explain the same; using the current distribution and RM framework but by developing an auto fare filing engine, several key data inputs into RM algorithms could be improved significantly. The article proposes simulation tests for cost‐benefit analysis and urges the industry to explore similar concepts.