Can Airlines Wing It Without Revenue Leakage?

Summary

The complexity of airline operations leads to various opportunities for revenue leakage. Interline agreements and partnerships further add to the problem. Plugging revenue leakage hence calls for a completely different approach. Formulating the problem is the key to arriving at an effective solution.

While multiple factors cause revenue leakage, it’s important to understand the entire revenue production and realization value chain to identify the sources of revenue leakage. There are three stages in the revenue production and realization value chain:

• Product creation (network planning and scheduling)

• Value assignment and distribution (revenue management)

• Channel management (sales)