Lessons from the Airline Industry


I went to a website to look at the available flights and times, selected the flight that fit in my schedule, then purchased my ticket online. The entire process took a few minutes.

But it wasn’t always that easy.

If you wanted to take a flight 70 years ago, here’s how the process worked: You visited a travel agent. Your travel agent called the ticketing office. The ticketing office called the booking office that had a rudimentary system that looked up the status of a flight, and then the results were reported back over the phone.

Then, in the late 1960s, American Airlines and IBM developed the Semi-Automated Business Research Environment (SABRE). This system revolutionized the airline industry because it was much more efficient. The ticket agent could check seat availability and flight status on their own. It became a competitive advantage for American Airlines because they could issue a ticket faster and less expensively than their competitors. As a result, this disruption in the industry forced all airlines to turn to technology to stay competitive.

The next evolution of this technology was to remove the ticketing agent and travel agent from the process. SABRE launched Travelocity, a website that provided travelers like you and me the ability to book our own flights. Ticketing became even less expensive. Access to flight availability became instant.

Do you remember what happened next?

We began to learn when was the best time to purchase a ticket. Twenty-one days, right? We learned what day of the week people tended to fly. Monday mornings? Thursday evenings?

How did we learn this?


The technology has created efficiencies in the process and delivered data to enhance the experience and ensure success.

There’s another area in the airline industry where data plays a significant role, and that’s in yield management. Yield management has to do with the pricing strategy related to the availability of inventory, like seats on an airplane. The goal is to maximize revenue through a series of price changes based upon a history of consumer and industry data.

Each seat on an airplane is a perishable asset. Every seat that doesn’t get purchased before the flight takes off represents lost revenue. That’s why you’ve probably heard that the best deals come right before the flight leaves, but before you risk missing a flight trying to wait on a last-minute deal, consider the fact that the airline has the ability to make price changes on the fly because historical data isn’t all they use.

As the flight fills up, their business rules change to accommodate demand. If the plane fills up faster than expected, the price increases, or if there is excess supply, the price will drop. Thus, they are able to charge the maximum price the market will bear at any time based on millions of observations conducted over decades.

What does this say about the event registration process?

Online registration has created efficiencies in the event process, but what the industry lacks is the knowledge based in data that enhances the experience and ensures success.

When’s the best day to hold an event? Saturday or Sunday? The Boston Marathon runs on a Monday. You may have a preference, but it’s a personal one. There are hundreds of events throughout the year that take place and no single event organizer has visibility to determine whether their choice is the right one.

In the event management industry, pricing strategies are built around creating urgency, not maximizing revenue. Our event capacity is just as perishable as an airline seat, but how do we create urgency to fill the spots while retaining as much revenue as possible? We know that 3-4 price increases are standard, but when should those price increases occur? By how much should they increase?

How do you pick your price points? $50 sounds nice. What if I told you that the data suggests that there would be no impact on registration as long as you stayed under $64.20? By how much would you increment then? The future of our business lies in harnessing this data to be able to make decisions that are fact, not experience-based opinions.

With ACTIVE Network Activity Cloud™, to be launched later this year, you will have the tools to analyze events, uncover insights and recommendations, and immediately act on these insights to optimize your revenue potential.

To learn more, visit http://www.activitycloud.com/contact-us to talk to an ACTIVE Network Activity Cloud™ expert.