Amadeus launches Active Valuation for airlines

Amadeus has launched Active Valuation, a new IT solution that enables airlines to maximise revenues across multiple channels. Lufthansa, Air Baltic, Singapore Airlines, TAM and Etihad are all Active Valuation contracted customers.

Active Valuation works by enabling the application of sophisticated business logic to dynamically adjust the yield (revenue expected) of an airline product, according to the context in which a booking is made. These yield modifiers are used in a seamless manner in order to perform an origin and destination (O&D) calculation. This allows a dynamic segmentation of customers, taking into consideration their characteristics, the point-of-sale used and any connecting flight data, in order to better capture their willingness-to-pay. At the same time, Active Valuation can also be used to incorporate cost considerations into the availability decision process, for example costs related to the sales channel or to any fuel surcharges that may be applicable. In addition, this allows the airline to consider the indirect contribution of a given customer, such as loyalty, and the contribution to the network by looking at return trip criteria.

The new solution is designed to complement Amadeus’ existing Revenue Availability solution which has already been implemented by more than 10 airlines worldwide including Air France-KLM, Lufthansa and Austrian Airlines.

Revenue Availability works by allowing an airline to intelligently optimise its inventory in order to generate maximum return on a booking.

For example, when a customer requests availability information for a multi-leg journey, the solution automatically considers the complete value of the trip and delivers appropriate availability information to the customer.

“We believe that Active Valuation will enable us to define and implement strategies in real time that can be applied dynamically on top of the revenue management controls. Through Active Valuation we will be able to apply decisive segmentation and differentiation strategies. This amplifies the benefits of using our revenue management system optimisation module,” said Günter Friedrich, VP Information Management, Sales and Customer Processes at Lufthansa.