ATPCO Reduces Barrier to Entry for Airlines to Adopt Dynamic Pricing
Industry leader aims to provide airlines dynamic pricing flexibility compatible with all channels, including NDC
Dulles, VA – 1 October 2019 – Today, at its annual Elevate Conference, ATPCO announced it has enhanced its model for dynamic pricing, now enabling airlines to complement their standard pricing (pre-filed fares) with a new, tested, dynamic pricing model. The new approaches will significantly increase the speed at which airlines can get more price points out to the market, including personalized pricing to consumers.
The new model enables an airline to implement one or more different dynamic pricing approaches based on each airline’s individual infrastructure and strategy. “With these enhancements, ATPCO is able to provide the benefits of dynamic pricing with the interoperability of traditionally filed fares,” said Rolf Purzer, CEO of ATPCO.
The model is made up of three different approaches. The first approach expands ATPCO’s standard pricing with pre-determined offers. It is now known as Optimized Pricing, which enables an airline to increase the number of price points with Dual RBDs or more frequent updates using machine learning and upload APIs. The second approach is Adjusted Pricing, which uses an airline’s Dynamic Pricing Engine (DPE) to choose pre-filed fares (DPE Predefined Price) or adjust a filed product (DPE Generated Price). Continuous Pricing, which is the third approach, enables fully personalized offers with minimum/maximum pricing or bid pricing. Specific terminology will evolve but the progression is as follows:
“The promise of dynamic pricing is to increase yield for airlines through targeted offers that meet consumer expectations. As an industry resource we’ve had the privilege of working with academia at MIT, industry bodies, pricing experts, and others to develop an approach that combines the best of this future vision with the interoperability of today’s systems. Our goal is to provide more value to airlines and systems by enabling more choice to consumers,” said Purzer. “We are now making this vision a reality.”
ATPCO initially began its industry-leading research into dynamic pricing with a white paper in 2015, and soon established the Dynamic Pricing Working Group, which includes more than 300 participants from 90 organizations. The group has defined and delivered into production over 30 implementations of dynamic pricing, with the stated goal of demystifying dynamic pricing through experimentation and trials that lead to implementation patterns that work across all channels, and are fully compatible with traditional pricing to ensure servicing, settlement, and support are not disrupted.
“Over the last two years we have supported airlines in their need to become more agile in their pricing and provide more structural support for their products. We have already seen over 30 airlines implement Optimized Pricing via the ATPCO infrastructure,” said Thomas Gregorson, Chief Strategy Officer at ATPCO. “This number will only increase with the new simplified model, giving airlines more flexibility and choice of what and how to price across a spectrum, instead of pigeon-holing them in only one system, by providing tested frameworks for each airline to innovate and change their individual pricing approaches.”
ATPCO also announced that its Adjusted Pricing Implementation Guide is now live with the full package of standards being defined hand-in-hand with the industry. ATPCO and its product teams have already started supporting the new approaches and begun the implementation of the standards. The guide explains in detail how airlines can implement different versions of Adjusted Pricing.
“The journey to personalization in the airline industry has begun, but this is a marathon, not a sprint, and we are just at the starting line,” said Aldo Ponticelli, Head of Distribution Strategy & Systems Support at Alitalia. “Airlines want more flexibility, but we are somewhat constrained with current systems. To see ATPCO leverage its resources to create a model and framework that gives airlines more choice means each airline can move at the pace it needs. With the help of ATPCO, the next 12 months in pricing should be an exciting one to watch and but be a part of.”
ATPCO supports the industry’s strong appetite to experiment, test, learn and enhance at a fast pace. To continue expanding the choices available to industry players, ATPCO is also calling all innovators in the travel technology market who have ideas or new technologies that could help airlines price more dynamically to be a part of building the future of pricing with ATPCO and will share its latest DPE schema and resources. To access, apply and visit ATPCO’s Bridge Labs program.