Effects of the application of Revenue Management in the aeronautical industry

Abstract

Airlines around the world have been affected by the challenges of profitability, market share and demand behavior, which has contributed to the development of revenue management or Revenue Management. The management model seeks to maximize the level of income in companies with demand management. The application of this model in companies of various sectors has generated an increase in their annual income in order of 4 to 5% favoring business opportunities through the development of new markets based on business profitability. The aviation industry was one of the pioneers in applying this management model worldwide. On this occasion, the case applies the model in a dynamic market with new restrictions: regional market, short flights, deregulated fares and impact of low-cost airlines.