Air India will move to better ticket pricing system in a few mths: MD & CEO

Air India, which was handed to the Tata Group in January last year, posted a loss of about Rs 7,000 crore in 2021-22

Air India will move to a better ticket pricing or the revenue management (RM) system in a few months to achieve profitability, said Campbell Wilson, chief executive officer and managing director of the airline, on Friday. The airlines will move to a network-based RM system, bringing it on par with the other top airlines of the world.

Currently, Air India works on segment-based RM system that forecasts demand and sets ticket prices for each leg of a passenger's journey. On the other hand, the network-based RM forecasts demand and optimises ticket prices keeping in mind the entire journey of the passenger. 

For example, if a passenger has to travel from New York to Lucknow via Delhi, then the network-based RM system will calculate the demand forecast and optimise ticket prices, keeping in mind the entire journey (New York-Delhi and then Delhi-Lucknow). Therefore, the network-based RM system is used by large airlines as it suits their hub-and-spoke model.

"Hearty congratulations to our RM and IT colleagues for the successful cutover of the Altea RM System. This, together with transformative projects underway in loyalty, pricing, sales and distribution and cargo, is a very significant step toward achieving our revenue and profitability ambitions," Wilson told employees in a message, which has been reviewed by Business Standard.

"The cutover of this segment-based RM system is a precursor to a further upgrade to network-based RM in a few months’ time, at which point Air India’s pricing and revenue management capabilities will be on par with that of other tier-1 airlines," he added. 

Air India, which was handed to the Tata Group in January last year, posted a loss of nearly Rs 7,000 crore in 2021-22. The company is yet to declare its 2022-23 results.

Wilson said that the company is now in the ‘take off’ phase of its transformation project "Vihaan". Therefore, Wilson, senior executives, and project teams will be traveling to cities around the country to meet employees from June.  

"We’ll be sharing details on what is being worked on, seeking your thoughts, suggestions and help to take our mission forward, and provide updates on what is happening in the company. These will help ensure we all share the same direction, purpose and energy," he mentioned.

Wilson congratulated the employees for making Air India the country's most punctual airline after Akasa Air in April.

"April was the first month when all the hard work put in by our operations team and IOCC (integrated operations control center) folk was fully complemented by the schedule, ground- and block-time refinements designed last year for the northern summer 2023 schedule. With our cabin crew and pilot pipeline now flowing well, improvements to the AEP (airport entry permit) process ongoing and (slow but) steady improvement in aircraft reliability, there is no reason why we can’t retake our place back at the top of the OTP charts in the months ahead," Wilson noted.

THE TWO SYSTEMS

• Segment-based RM system forecasts demand and sets ticket prices for each leg of a passenger's journey
   
• Network-based RM system forecasts demand and optimises ticket prices keeping in mind the entire journey of the passenger