Airline revenue management and operations thrive on a baseline predictability of demand and passenger flows.  Certain seasons are busy, others less so.  Prior to the COVID crisis most airlines had a good handle on no-show rates and cancellation rates - while  there was always some variability they typically followed a pattern, and they could plan around these patterns.

Obviously the current COVID-19 crisis has changed all of this:

• Demand is highly volatile - Regional outbreaks move at a rapid pace, and have a quick and sometimes unpredictable impact on demand
  
• Passengers are cancelling more frequently - Enabled by relaxed cancellation rules and rapidly changing health and safety considerations
  
• No-show rates are highly variable - There is no guarantee that confirmed pax on the day of departure will ultimately show for the flight

Our airline partners are employing a few solutions to address this demand variability challenge:

• Gauge changes - They may book a flight assuming a larger aircraft type, but downgauge the aircraft if demand does not materialize.
  
• Overbooking - Some of our partners are overselling flights (in many cases based on a reduced load factor cap) by 200% to 300%, due to the huge unpredictability of cancellations

While both of these solutions address the demand variability challenge, they both come with significant costs.  Gauge changes and overbooking often result in situations where passengers need to be re-accommodated on other services.  Yet the processes to handle such re-accommodations are costly, manual, and frustrating - both for airlines and customers.  Call center agents often have to call the flight manifest PNR by PNR, hoping to catch someone on the phone and then hoping to convince them to change their flights.  Customers are put on the spot, creating anxiety.  This is costly and ineffective.

Volantio's Oversell Protection module is helping airlines reduce the costs incurred via demand variability by fully automating the entire process to resolve oversold flights.  The resolution process can commence days prior to departure, or even up to the minute at the airport.

Curated offers (powered by intelligence from GreenLeaf) are automatically sent to all passengers on the flight.  Passengers can accept automatically via their mobile phones, eliminating the need to connect in real time with an airline agent.

We've found the results from Oversell Protection to be extremely compelling.  The above table outlines flights on which we took action recently.  On 5 out of 8 of the flights, the resolution automatically occurred in 1 hour or less, with 100% success.  Obviously results will vary situation by situation, but the passenger response was overwhelming (in most cases the system received more volunteers than were needed), and the airlines were able to avoid significant manual work.

Demand variability and volatility is here to stay for the near term.  Dealing with this could be costly.  We believe that Oversell Protection can help.  Please contact us to learn more.