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Adam Bockelie, Revenue Management Strategic PlanningAir Canada

What’s Next?Continuous Pricing and Dynamic OffersOur vision is to move toward continuously priced, dynamically created offers:– Customized offers dynamically assembled from individual components

– Continuous pricing for each offer and a la carte options, without RBDs

Aeroplan Miles Lounge AccessFood and Alcohol

Checked Bag Preferred SeatAdvance Seat Selection

Ticket Upgrades Ticket ChangeRefundability

Today we will share what we have learned implementing different combinations of static products and RBDs

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BQ

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Air Canada Implemented a Dual-RBD Structure in 2006• Wanted to always offer a basic product, and have a consistent

buy-across to better products

• Fulfillment based on RBD, so filed Latitude fares in B class that were are also controlled by lower Tango Plus RBD availability

Allowed more price points, but created challenges for RM forecasting because Latitude bookings had to be re-mapped from B to lower classes:

– Due to timing of extracts from RES, today’s Latitude bookings allocated

according to yesterday’s booking mix

– Bookings used for forecasting differed from bookings in RES and

business intelligence reports

Tango Tango Plus

Latitude

Web Fare Books in

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M B B

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GW WB B

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ET

Forecasting these bookings in B class would incorrectly inflate demand!

Simplified: not all classes shown

With OD RM Implementation, Remapping Bookings Would be Too Inaccurate• Air Canada moved from leg to OD revenue

management in 2014

• Dual-RBD approach for Latitude would be too complicated to replicate with OD forecasting:– Because OD/Point of Commencement bookings are

so sparse, allocating today’s bookings by yesterday’s

mix would be very inaccurate

• To increase number of price points, we implemented Branded Fares in 2017 and fulfill based on fare basis code, and can now sell multiple products in each RBD

Basic Standard Flex Comfort Latitude

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B

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S S S S

T T T TSimplified: not all classes shown

With this approach, no separately availability control for S Comfort vs S Flex vs S Standard, etc.

Where We are Going• We would like more flexibility with products, more price points, and more control– Our current branded fare approach does not provide real time control over availability of each

product/RBD combination

– Dual RBDs provide more control but have complex forecasting implications

• We plan on revisiting the entire revenue management process—forecasting, optimization, & pricing, for flights and ancillaries—to support a future that is classless, continuous, and dynamic

Evaluating performance on AC network of willingness-to-pay based classless forecasting models

Studying continuous pricing proof-of-concept to demonstrate distribution feasibility$150

$600

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