Branded fares product design and pricing

In 2009-2011, Sabre Research worked on an airline decision support prototype to optimize the revenue performance of branded fare bundles and their pricing • Initial results show that effective branded fare product design and pricing can improve profitability (often by several percent for the examples we solved) • Have had discussions with several airlines and are now using this work as part of our ancillary and branded fares consulting • During the past year, we have enhanced the prototype to support end-to-end processing • A web survey tool was tested internally at Sabre to demonstrate customer willingness-to-pay estimation • Latest models incorporate price elasticity, competitor attractiveness and 'air right to travel' attribute • New genetic algorithm optimizer runs in only a few hours and allows our consultants to (iteratively) constrain the product design to match airline marketing objectives • This presentation describes the modeling approach, methods and application.