Case Study

MainTrend’s Air Cargo Revenue Intelligence system has been successfully implemented in an airline that operates both a passenger fleet and a dedicated cargo fleet. The company’s cargo business is spread among the designated aircrafts and passenger aircrafts on their nonstop flights to more than 50 destinations.

The Challenge

The airline was experiencing a profit loss as a result of low load factor (LF) in its cargo business. MainTrend analyzed the data, and found the following causes for operational and revenue mismatch:

  • FIFO based operation, with no revenue management methodology
  • Unknown capacity demand lead to low LF
  • An ambiguous pricing policy created customer confusion that lead to profit loss
  • Unmanaged allotted capacity and disorganized sales processes resulted in capacity and revenue loses
  • Incomplete price calculations left out operational factors
  • The lack of real-time flight development monitoring and cargo management tools were one of the key success factors missing to optimize flight revenues

The Solution

MainTrend’s team studied the companies operation closely, and adapted the Air Cargo Revenue Intelligence system to deliver optimum performance for the airline’s cargo operation.
The system enabled the airline to:

  • Divide flight capacity into fare classes and associate shipments with relevant classes
  • Update fare classes in real-time, based on demands and cancellation dynamics
  • Forecast capacity demand and pricing based on ongoing analysis, history data, customer behavior and publicly available data
  • Manage allotment
  • Carry out ongoing forecasting and recommendations based on all operational factors delivered through the system’s interactive dashboard

The Implementation Process

Once the project was approved, implementation was completed within a year. The main implementation phases of the air cargo revenue management system were:

  • Integration with the cargo operational system, including data collection interfaces
  • A 3-month pilot of 2 flights from a home station
  • A soft launch of improved flight revenue and load factoring for chosen flights
  • A systematic yet gradual addition of flights, in parallel with functionality expansion
  • Integration of transit shipments into RM processes and optimizing revenue management by integrating calculated marginal costs into contribution to flight income, relative to direct cargo

Business and Organizational Results

Implementation of Revenue Management led to significant benefits:

  • Improved flight revenue
  • Improved LF due to better capacity management
  • Improved operation due to interactive and efficient flights management
  • Proactive flight management using alerts, notifications and recommended actions to improve flight revenue and LF when certain conditions occur or revenue opportunities are identified
  • Optimization processes based on data and management reports on service failures, load factors, revenues and customer behavior
  • Improved customer service thanks to a clear pricing approach
  • Higher preferred customer satisfaction, thanks to prioritization features
  • The company connected to e-booking sites, and enabled customers to receive a price quote, alternative routes and to book their chosen flight

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