Mercator Blog

Managing Unforecastable Airline Demand

Consumer product companies, like airlines, regularly develop demand forecasts for thousands of products.  Retailers, for example, must forecast not just how many men’s shirts will be purchased but what styles, colors, and sizes, and at which locations.  In the case of airlines, we not only forecast demand for each of a thousand or so flights a day for the next year, but we often forecast 15 price points and 20 or more O&Ds on each flight. The numbers of individual forecasts can become overwhelming.

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Topics: Aviation, Revenue Management

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Adaptability, Speed, and Partnerships: The Keys to Air Cargo Success

The air cargo industry as a whole is set to undergo significant changes in the near future. The shift in the business environment will require shippers to use increasingly automatized systems, integrate production networks more deeply, use advanced algorithms to determine predictive air shipping routes, and utilize new delivery methods.

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Topics: Aviation, Cargo

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Silicon Valley & Aviation: Embracing Innovation

After a puzzling period of non-engagement, the airline industry is forging ties with the innovators of Silicon Valley. Over 500 companies from other industries have already set up field offices in town, hoping to benefit from the innovative thinking of the tech world. And airlines are finally jumping on board.

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Topics: Aviation

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'Segment of One' and the Evolution of Airline Pricing

Airlines, like e-tailers and virtually all other e-merchandising companies, aspire to marketing to a “segment of one,” or highly customized merchandising approaches that account for individual purchase behavior in forming offers and prices. The concept of “segment of one” replaces traditional, broad-based segmentation between “business” and “leisure” and other conventional marketing segmentation schemes. The evolution of the industry from one fare to “segment of one” has taken fifty years, from de-regulation of the airlines in the late 1970’s up to today.  

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Topics: Aviation, Revenue Management

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Blockchain: The Next Evolution in Airline Loyalty Programs

In the US alone, the average household has memberships in 29 loyalty programs, with airline frequent flyer programs being one of the most common. Consumers are navigating a confusing maze of disconnected points and rewards systems—and quite frankly it’s unsustainable.

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Topics: Aviation, Customer Experience

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The Rise of Air Cargo Communities

Demand for special cargo—like oversized items, dangerous goods, pharmaceuticals, live animals, and other time/temperature sensitive items—is on the rise. For air cargo carriers, this trend presents both challenges and opportunities.

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Topics: Aviation, Cargo

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4 Common Airline Revenue Management Roadblocks and How to Avoid Them

What’s the latest innovation in airline revenue management? What new algorithms or models are offered by vendors to help improve revenue forecasting or optimization - or better estimate price elasticity - or increase revenue integrity? Are you missing out?

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Topics: Aviation, Revenue Management

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Elevate Your Airline Marketing Game: 5 Trends for 2017 and Beyond

Despite political, economic, and security concerns, airlines have been doing quite well recently. The industry is enjoying highly profitable years (in 2016, net profits were $35.6 billion overall). Also, 2016 was the second safest year in air travel history.

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Topics: Aviation

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Machine Learning in Air Cargo: 3 Potential Applications

Let’s imagine an air cargo warehouse that runs on its own with minimal human monitoring. Stock inputs would be captured with drone-fitted cameras and machine learning algorithms. Having this type of “smart-warehouse” isn’t that far off in future. We are on the verge of using the next evolution of artificial intelligence for air cargo supply chain management. Machine learning will enable the intelligent value chain. Read on to learn more about machine learning and the implications it has for the air cargo industry.

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Topics: Aviation, Cargo

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Airline Revenue Management Strategy 101: It's All About Alignment

Revenue management has been long been touted as a strategic tool but what exactly is the “strategy” that is being referred to?  When it was initially introduced, the airlines which invested in revenue management technology pursued a quantitative and analytical approach that differentiated them from airlines with simpler pricing. But are “analytical” and “quantitative” still defined as a “strategy” that differentiates an airline from its competitors?

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Topics: Aviation, Revenue Management

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API-First: What It Means for Airlines and Why It Matters

An Application Programming Interface (API) is a set of routines, protocols, and tools for building software applications. It’s typically used to expose a specialized function that can be consumed by other applications. Online stores, for example, use APIs to allow buyers to enter in their payment information.

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Topics: Aviation

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Customer Spotlight: 3 Ways Swiss WorldCargo is Driving Innovation Through Agility

The emergence and rapid rise of e-commerce has brought with it a surge in demand for big data and logistics. In October 2016, the freight tonne (FTK) terms for air cargo traffic grew by 8.2%. This was the highest increase recorded since February 2015, when the closure of West Coast US seaports gave the industry a boost.

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Topics: Aviation, Cargo

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The Race is On: The Air Cargo Industry's Game of Drones

In December 2013, Jeff Bezos appeared on 60 Minutes and made a promise that not only sparked a lot of interest but was also deemed by many as a mere publicity stunt to get Amazon on the mouths and minds of Christmas shoppers: deliveries by drone. “I know it looks like science fiction. It’s not,” he assured.

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Topics: Aviation, Cargo

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The Overbooking Debate: A Step Backwards for Airline Revenue Management?

There have been two major elements of airline revenue management from when the concept was initially introduced in the 1970’s: inventory controls and overbooking. Together, these are calculated to drive over 5% more revenue and are now considered a fundamental practice for airline revenue management. Both remain long-standing examples of airlines’ leadership in the application of big data analytics to drive improved profitability, and both rely on a combination of forecast algorithms and optimization models.

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Topics: Aviation, Revenue Management

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Harnessing the Power of Artificial Intelligence in Aviation

Artificial intelligence is changing the status quo for all industries, air travel included. We’re already seeing instances of Google creating a neural network to translate between some of its most popular languages. And, if you’re a journalist, chances are, you’ll be working side-by-side with computers. In fact, at the AP, it’s already happening.

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Topics: Aviation

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3 Ways to Stand out in the Skies with Service 4.0

In the airline industry, like most other industries, customers are increasingly demanding a simple, intuitive, and personalized experience. For most airlines, meeting these demands will give them the competitive edge they need in a sector where margins are slim.

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Topics: Aviation, Customer Experience

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Offline and Online: The Customer Experience Merger Airlines Need

From Virgin Atlantic’s fully connected Boeing 787s to Qantas’ VR headsets, airlines have been embracing digital transformation. Many of these moves have been the right choice. For airlines, going digital is no longer a mystery, but rather something they are learning to navigate.

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Topics: Aviation, Customer Experience

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How They See It: 4 Things Air Cargo Leaders Are Saying About Innovation

Air cargo carriers are operating in an industry that transports $6.8 trillion worth of goods annually. Competition is fierce, margins are slim, and there’s no time to wait for change. The industry needs to make that change happen now.

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Topics: Aviation, Cargo

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Third-Party Services: The Next Growth Opportunity for Airlines

Organic growth is very limited in mature air travel markets. In fact, most U.S. airlines faced unit revenue declines in 2016 as capacity outstripped demand in many markets. The largest U.S. airlines have embraced “capacity discipline” to keep unit revenue in check – increasing capacity in 2017 at 1-2% and shrinking in sectors experiencing limited demand growth. Acquisitions are of course, another vehicle for airline growth. The U.S. market has seen tremendous M&A activity over the past decade. In fact, it is now commonly believed that anti-trust officials would block further acquisitions by any of the four carriers that now represent 80% of domestic capacity (American Airlines, United Airlines, Delta Airlines, and Southwest Airlines).

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Topics: Aviation, Revenue Management

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Skyscanner’s Vision for Airline Distribution: What It Is and What It Means for the Industry

By 2020, digital travel sales worldwide are expected to reach $817 billion, with online travel agencies taking up a big piece of that pie. Overall, roughly 33% of leisure tourists prefer online travel sites like Expedia for airline ticket booking, and 53% of corporate tourists opt for such third-party sites.

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Topics: Aviation, Distribution

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Developing an Airline Innovation Culture: 4 Tips for Success

Every business emphasizes innovation. For the airline industry, which operates on slim margins, successful innovation is even more critical to staying profitable and ahead of the competition.

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Topics: Aviation

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4 Strategies for Mastering the Digital Imperative for Air Cargo

In every industry, from energy, to construction, to finance, the digital innovation is pushing forward at an incredible pace. That’s why 86% of all CEOs believe digital transformation will play a key role in their market. The air cargo industry is no different.

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Topics: Aviation, Cargo

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Delivering a Tailored Experience to Airline Customers

Did you know the average American spends an average 11 hours a day with electronic media? From radio to smartphones to television, people are always connected. For companies, this exposure is a huge opportunity to present a unified brand image to gain new business. Airlines can do the same.

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Topics: Aviation, Customer Experience

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Developing Competition-Driven Dynamic Airline Pricing

Dynamic pricing must incorporate a competitive view. Many times, for example, a weak competitor will engage in “stealth” pricing, introducing lower fares for very short periods of time to gain a pricing advantage “under the radar,” not easily detected by most pricers. A fully optimized pricing strategy monitors competitor pricing on a real-time basis and responds “accordingly.”

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Topics: Aviation, Revenue Management

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Embracing the Next Wave of Air Cargo Innovation

Last year the air cargo industry shipped 52 million tons of goods with a total value of US $6.8 trillion. As the volume of air cargo shipments increases, the movement of goods via air is becoming increasingly important for the health of the world economy. A more efficient air cargo ecosystem

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Topics: Aviation, Cargo

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Redefining Airline Customer Experience: 5 Examples to Inspire Your Brand

“Personalization” is the buzz word in travel marketing today. The goal is to connect with the individual traveler and offer a tailored experience. As McKinsey notes, "This issue of relevance in our era of instant gratification is particularly pronounced because consumers are bombarded with messages, most of which are off target. Personalization

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Topics: Aviation, Customer Experience

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5 Essentials for Airline CIOs to Navigate 2017

From VR entertainment on Qantas flights to automatic check-ins with JetBlue, the airline industry is evolving at a rapid pace. With such advancements, customer expectations are rising. In an industry where margins are slim, there’s no time to waste. Airlines need to make the necessary changes now in order to stay competitive for tomorrow.

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Topics: Aviation

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Airline Revenue Management: Maximizing Customer Experience Through Demand Management

Revenue management is not just about higher fares. Some view revenue management as a zero-sum game pitting spreadsheet-armed analysts against unsuspecting customers, where airlines develop complex algorithms to get as much out of passengers as possible.

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Digital Transformation in Air Cargo: Creating an Ecosystem

In 2016, the amount of cargo transported by airlines reached 52 million tons, with the total value of goods equal to about $6.8 trillion.  Clearly, the shipment of goods via air is vital to the health of the world economy. A more efficient air cargo ecosystem could improve profitability for carriers (air cargo generates about 9% of revenue for airlines),but also enhance transparency and predictability across the supply chain. 

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Topics: Aviation, Cargo

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The Role of Pricing in Look-to-Book Decisions: A Disaggregated Approach

Often for marketing purposes, travel merchandisers distinguish between “lookers”, customers who look at their product online, and “bookers”, those who actually end up purchasing the product. Such conversion rates might be between 1 and 5 percent, for example. One marketing goal is to decrease the ratio of lookers-to-bookers, driving more sales.

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Topics: Aviation, Revenue Management

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Breaking the Air Cargo Language Barrier

This January, the International Air Transport Association (IATA), published its 10 New Year’s Resolutions for Air Cargo. Among the ten was the call for “One Digital Language,” referring to the need for the air cargo industry to achieve an alignment of messaging standards.

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Topics: Aviation, Cargo

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Unlocking Total Customer Value: Are Airlines Missing the Point of Loyalty?

In 1981, American Airlines launched AAdvantage—the world’s first airline mileage program. The goal: build loyalty by offering customers a way to accumulate points and get free flights. While this is still the main purpose, frequent flyer programs have morphed into something much more complicated.

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Topics: Aviation, Customer Experience

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The Airline Customer Experience: 5 Predictions for 2017

In the airline industry, customer service matters. Look at Southwest Airlines: their customer focus made it one of the world’s most popular airlines. The low-cost carrier, which regularly ranks among the top in airline customer experience, would never have become a household name without superior service.

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Topics: Aviation, Customer Experience

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Why Air Cargo Carriers Need to Watch Out for Amazon Prime Air

Air cargo carriers play a vital role in today’s cargo supply chain. Not only do they serve as intermediaries between ground carriers, they allow companies to offer premium shipping services, like express and overnight delivery. This is a powerful incentive for customers who might not have time to wait and a great boon for the air cargo industry.

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Topics: Aviation, Cargo

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Why Branded Fares Aren't Just About Upsell

Airlines that offer branded fares love to talk about upsell. “30% of passengers choose to purchase one of the upsell bundles!” (Hurrah) They conclude by “Branded fares are working”. This, however, is not the best way to look at branded fares, and is typically not the main reason airlines are increasingly offering such re-bundling of ancillary services.

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A Look Into the Air Cargo Facilities of the Future

This March, the 11th Annual World Cargo Symposium will take place in Abu Dhabi. With one of this year’s themes - Cargo Facility of the Future - the conference will cover some exciting topics, ranging from the future role of cargo facilities to how technologies like wearables and augmented reality can transform the industry.

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Topics: Aviation, Cargo

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How They See It: 4 Things Airline CMOs Are Saying About Marketing

Marketing in the airline industry is changing by the second. From social media to data analytics, it seems everything reinvents itself every few months. This puts Airline CMOs in the hot seat. They must adapt to these changes, while simultaneously capitalizing on new opportunities.

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Topics: Aviation, Customer Experience

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What Airbnb Trips Means for Airlines

Airbnb announced in November the launch of Airbnb Trips, the new platform that aims to provide users with a complete travel experience. Dinner reservations, outdoor activities, and of course, accommodations, users will be able to book almost everything for their vacation within Trips.

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Topics: Aviation

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What It Takes to Be a Leader in Airline Revenue Management

Wall Street has been famous for paying highly-analytical “rocket scientists” millions in annual compensation to identify lucrative trades and to place high value financial bets. Arguably, airlines have an equivalent function in revenue management where complex algorithms are used to maximize revenue need to be managed,

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Topics: Aviation, Revenue Management

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Why Dynamic Pricing Is an Advantage for Air Cargo

Why do restaurants hold happy hours and late-night deals? Why does Uber surge? Why can the same airline trip vary by hundreds of dollars depending on when you book it? It all boils down to dynamic pricing, or changing prices based on market demand and contributing factors.

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Topics: Aviation, Cargo

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2017 Airline Distribution Outlook: A Break in Tradition with Disruptive Technologies

An American futurologist, Alvin Toffler, once said that technology is “the great growling engine of change”. For the airline industry this “great growling” could in fact be ear-deafening. As businesses now depend on new and cutting-edge technologies to keep up with the ever adaptable consumer market behavior, dated industries

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Topics: Aviation, Revenue Management, Distribution

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Seeing Airline Customer Experience Through the Eyes of Passengers

  This past October, a first-of-its-kind report was released called the Group XP Experience Index. The report leveraged data from BrandZ, the world’s largest brand equity database, to evaluate brands according to the strength of their customer experience. The Group XP Experience Index contains 30 global

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Topics: Aviation, Customer Experience

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O&D Revenue Management Systems and Processes for Hub Carriers

Airline academics estimate that O&D revenue management can further improve an airline’s revenue performance by another 2% above leg-based revenue management. But many airlines still utilize “leg-based” revenue management systems and apply crude tools to differentiate the value of customers “by O&D.”

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Topics: Aviation, Revenue Management

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How Airlines Can Become Players in the Platform Economy

The disruptive power of the platform economy has redefined the business landscape over the last decade. We’ve seen companies like Amazon, Alibaba, and Uber build multi-billion dollar platforms, and they continue to grow. The airline industry, however, has experienced the disruptive impact of the platform economy.

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Topics: Aviation

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6 Things You Should Know About (StB) Cargo

Last year’s Global Shipper’s Survey showed the air cargo industry received an average score of 7 out of 10. Not bad, but it also means the industry can improve across the board, from customer satisfaction to partner cooperation. IATA took the score to heart and launched the Simplifying the Business (StB) for Cargo initiative. This industry transformation program aims

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Topics: Aviation, Cargo

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When Pricing Strategy and Overall Airline Strategy Are in Sync

Every strategy expert advocates a holistic formation of strategy, resulting in the integration of operations, commercial, pricing, and branding. Each function is linked and inter-dependent, and so every decision must be aligned with an overall consistent customer positioning within the chosen marketplace.

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Topics: Aviation, Revenue Management

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How Evolving Distribution Models Connect Airlines to Customers at a Greater Level

How does a business connect with its customers? It goes back to an old marketing paradigm: "People don't want to buy a quarter-inch drill. They want a quarter-inch hole." In other words, it’s not about the product; it’s about getting to the outcome, faster, easier, and cheaper than before.

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Topics: Aviation

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Mobile Apps: Creating Unrivaled Airline Customer Experiences

“Do you have an app?” Chances are, if you’re a business owner (or even working in business), you’ve heard this question in the last year. Apps are the cornerstone of the mobile experience. Companies across all industries have created their own apps to offer their services in faster, more convenient ways. In short, they want to create a better customer

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Topics: Aviation, Customer Experience

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Taking Air Cargo e-Commerce to the Next Level

  The good news: the global B2C e-commerce sector is expected to hit 2.3 trillion USD globally by 2017. The bad news: today’s air cargo industry isn’t exactly ready to handle this growth. And it won’t be stopping anytime soon. The industry must reinvent itself to face the challenges of the new e-landscape. This means learning to collaborate and innovate, especially when it comes to faster, smarter technology. So what options are available for air cargo carriers? What bottlenecks does the industry currently face and need to overcome?

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Topics: Aviation, Cargo

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2017 Airline CFO Outlook: Embracing Change

Airlines – similar to many other industries – like to view themselves as unique; uniquely difficult, uniquely complicated, subject to unique regulatory, competitive, or market forces. They are therefore cautious in adopting practices from other industries. As CFOs take on new change management

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Topics: Aviation, Revenue Accounting

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How Airlines Can Tap Into The Emotion Of Customer Experience

Are price and convenience the two biggest factors for customers when it comes to flying? Possibly, but there’s certainly more to it than that. There are also airline loyalty programs, although those have inconsistent numbers and not everyone flies enough

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Topics: Aviation, Customer Experience

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5 Airline Technology Trends That Will Fly Higher in 2017

How the world has changed. Now, you can do things like order a pizza by texting an emoji, let the car drive itself, and get a drink poured by a robot bartender. Technology’s presence can be felt everywhere. And its influence is only going to grow.

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Topics: Aviation

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On Your Tracks: Air Cargo Tracking By GPS

Air cargo is in the middle of a technological revolution. Advancements brought about by technology 4.0 and digitization allow carriers to improve delivery times and increase customer satisfaction like never before. This is important, as high-value, fragile and sensitive packages can translate into expensive liabilities.

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Topics: Aviation, Cargo

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How Data Fragmentation Puts Airline Revenue at Risk

Much is written about siloed departments at airlines. At the largest airlines, each major function could have hundreds of employees housed on different floors – or in different countries, with different sub-cultures, and very various focuses. Sales and operations in particular, have disperse workforces spread across the global network.

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5 Things Airlines Need to Succeed in a Digital Future

Thanks to digital technology, customer expectations border on perfection. Travelers expect constant updates, instantaneous solutions to their problems, and a superior flying experience.  Digitization is the key to delivering great flying experiences, but it’s also a top business challenge. It’s not just about customer satisfaction, either; airlines need to recognize that digitization can transform internal operations and logistics.

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Topics: Aviation

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Merchandising Economy Class in the Age of Airline Differentiation

Flight data website Routehappy, which provides seating and amenity information to large metasearch engines and airlines, now categorizes the markedly narrower, ten-abreast Boeing 777 seats as “standard”. The operating economics of 17-inch wide seats onultra-longhaul aircraft are clearly

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Topics: Aviation, Customer Experience

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Social Airlines: Leveraging Social Media into Everyday Customer Interactions

Creating a seamless customer experience is a top priority for every airline. And social media can help fill in technological gaps by providing real-time updates, promotional channels, and customer service. Nevertheless, social media management is still a widely misunderstood concept. Many people believe tweeting and posting on Facebook is all it takes. Just like other aspects of marketing, you need a strategy to ensure you’re getting the desired results.

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Topics: Aviation, Customer Experience

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The Value Shift: Why Airline CFOs Should Lead Change in the Digital Age

    A key metric for CFOs is, of course, “enterprise value” - the total market value of the firm. CFOs seek to increase the value of their airlines through profit growth and prudent risk management, but the most highly valued travel-related companies in the world are no longer airlines or hotels.

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Topics: Aviation, Revenue Accounting

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Shifting Patterns of Disruption Transforming the Air Cargo Landscape

  Like most industries today, air cargo is witnessing a technological revolution. Logistics companies, in particular, are disrupting the industry in new and innovative ways. Streamlined processes and smart technology are at the core of this revolution, helping to create safer, smarter, and more cost efficient means of transporting air cargo.

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Topics: Aviation, Cargo

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Turning Valued Airline Passengers into Valuable Customers

  The IATA World Passenger Symposium (WPS) which took place in Dubai from October 18-20 was centered on the theme “Innovating better, together.” More than 800 delegates gathered here to ‘innovate’ and explore ways to pave the future of airline distribution and services.

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Topics: Aviation, Revenue Management, Distribution

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A CIO's Take on Technology and the Airline

  There’s no way to deny it, technology is transforming jobs across the world. These days, you need to know more, be responsible for more, and be able to understand more complex technologies. Nowhere is this more apparent than with today’s airline Chief Information Officers (CIOs). 

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5 Air Cargo Supply Chain Management Trends to Watch

  Air cargo supply chain management has evolved rapidly in recent years. It seems like every week, new technologies are emerging that make the source-to-settle process more efficient for both the carrier and the customer. For air cargo carriers, it boils down to more than just increasing the bottom line (although of course that matters). It’s about streamlining processes, garnering new insights,

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Topics: Aviation, Cargo

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What You Need to Know About Turning Airline 'Lookers' Into 'Bookers'

The standard metric for customer conversion on travel websites is the look-to-book ratio; how many site visits does it take before someone actually makes a purchase? If a travel supplier can just get more lookers to actually book, its revenue will increase and the unit cost of distribution will fall. Thus airlines, hotels, and travel distributors track look-to-book and are constantly seeking initiatives that can improve booking performance.

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Topics: Aviation, Revenue Management

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Measuring Airline Customer Experience Value in Qualitative Terms

Making evidence-based decisions is important. As a result, and for many other reasons, airlines are thirsting for quantitative data: the hard numbers that say how the airline is performing and what passengers think about their service. Finding an objective truth is hard: are we doing better than our competitors? Are we doing well enough for the customers we want to attract and retain?

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Topics: Aviation, Customer Experience

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Big Data & Airlines: Improving the View in the Skies

  Chances are, if you’ve traveled with an airline, you’ve also received a slew of promotional e-mails. Most of these probably weren’t poor offers so much as they were poorly timed offers. Maybe they’ve sent you a pitch to redeem your points for a hotel (after you just booked an Airbnb). Perhaps it’s a travel promotion that’s ending in two hours (but you just got back from vacation).

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Topics: Aviation, Customer Experience

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How to Use Segmentation to Personalize Airline Offers

There is increased need for travel merchandisers to “personalize” travel offers for their customers.  However, “personalization” is a bit of a misnomer given that airlines have little information on most of their travelers. Thus, personalization must:

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Topics: Aviation, Revenue Management

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Data Science And Predictive Intelligence: Taking Air Cargo Efficiency to New Heights

Even with the use of advanced technology and innovative business models, air cargo services are facing operational challenges in the 21st century.

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Topics: Aviation, Cargo

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Why Airlines Need to Get Personal

Consumers crave personalized experiences. And businesses couldn’t be happier. Between loyalty programs, purchase history, and e-mail marketing, airlines can now reach customers on an unprecedented level of personalization.

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Topics: Aviation, Customer Experience

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What Would Industry 4.0 Look Like for Air Cargo?

Over the last three hundred years, we’ve seen the evolution from Industry 1.0 to 4.0. Never before in human history has innovation come so rapidly.  From the advent of the steam engine to advanced robotics, industries have grown by leaps and bounds to improve performance.

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Topics: Aviation, Cargo

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How Personalized Offers Benefit Both Customers and Airlines

Offer management entails a personalized approach to customer engagement. Increasingly, travelers – like customers across industries – expect more customized merchandising. Most generic offers don’t meet their needs, hence leading to conversion rates of 2-3% or lower.

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Predicting and Planning for the Customer Experience of the Future

As the commercial aviation world revs up for the northern hemisphere autumn passenger experience conference season with IATA’s World Passenger Summit in Dubai and the combined APEX Expo-Aircraft Interiors Expo Asia - Future Travel Experience Asia in Singapore, industry minds will be turning to the future.

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Topics: Aviation, Customer Experience

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What Air Cargo Can Learn from Amazon's Customer Obsession

Amazon is no stranger to innovation. One of the pillars to their success has been the ability to revolutionize their delivery systems over and over again. This past year has continued this tradition, with Amazon’s launch of several new initiatives that guarantee faster delivery and superior supply chain capacity.

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Topics: Aviation, Cargo

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IATA WFS 2016: Five Takeaways for Airline Finance Executives

Last week, airline finance executives gathered from around the world at the IATA World Financial Symposium in Singapore to hear industry experts and peers share knowledge and best practices to support sustained airline financial health. Key themes included airline retailing, enterprise and financial risk management, FinTech, and simplicity as the key to cost efficiency. Here are our top takeaways:

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Capitalizing on the Power of IoT in the Air Cargo Supply Chain

By 2020, according to research by Gartner, there will be 25 billion connected things. Without a doubt, IoT is going to transform many industries—including air cargo. How far its impact will go remains to be seen.

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Topics: Aviation, Cargo

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The Power of Real-Time Feedback in Transforming the Airline Customer Experience

  When 66% of consumers that switch brands say they do so because of poor customer service, it’s clear that airlines should place emphasis on perfecting the flying experience, and allocate resources accordingly.

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Topics: Aviation, Customer Experience

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The Evolving Role of the Airline CFO In a New Era of Marketing

Traditionally, the relationship between finance chiefs and marketing departments has not been the smoothest. CFOs demand cost discipline and quantitative justification for spending - both for the airline as a whole, as well as any particular investment that must meet certain ROI objectives. Marketing on the hand has historically been regarded as a creative and image-oriented discipline, which can be a source of tension as the marketing department touts brand while finance demands the numbers. 

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Mercator Clients Top the FTE Airline Passenger Experience Power List 2016

  Future Travel Experience, an online media company that analyzes the end-to-end passenger experience, recently came out with its Airline Passenger Experience Power List for the year 2016. The list was designed to honor employees at specific airlines who have led enhancements in the customer experience with great service and excellent use of technology.

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Topics: Aviation, Customer Experience

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Fast Fashion: An Opportunity for Air Cargo

  These days, fashion never stops moving, especially with the rise of fast fashion—the phenomenon of fashion trends moving from catwalk to store quickly and cost effectively through expedited production processes.

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Topics: Aviation, Cargo

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Top 5 Takeaways from the Aviation Festival 2016

Mercator and RMS joined global airline leaders at the Aviation Festival 2016 to discuss how we can improve the end-to-end passenger experience. Here are some of the key takeaways from the event.

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Attracting High-Value Customers in the Age of Airline Disloyalty

As airlines continue their move to revenue-based frequent flyer programs, most notably in the US, and carriers worldwide seek to balance the profit center benefits of attracting and retaining high-spending loyal flyers with the cost center aspects of providing them with perks, the commercial aviation industry is in uncharted loyalty water. Yet loyalty is still a vital part of many airlines’ strategies.

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Creating an Intelligent and Predictive Air Cargo Supply Chain

Digital disruption presents the most significant threats and opportunities the air cargo industry has faced. Being truly digital means moving from surface-level efficiency plays to true transformation that drives business advantage. In this dynamic environment, data mining, analysis, and prediction are imperative. The air cargo supply chain must develop proactive business processes that are fueled by real-time intelligence to allow for constant development, change, and iteration.

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Enabling Choice - And Thus Satisfaction - For Business Travelers

Airline passengers have more choice of product than ever before, whether the proliferation of better-than-basic economy products or numerous upmarket business products. Yet this proliferation means that determining the best option for a business traveler, while ensuring that the reins of a corporate travel policy are kept tightened, can be difficult. Airlines need to make it easier for customers to compare rather than making the situation more opaque.

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Driving Airline Revenue With Offer Optimization

It's a hot topic in the airline industry today; how to engage with customers and offer a more personalized experience - as the leading e-merchandisers do in other industries. "Choice" is the keyword for airlines as they embrace new ancillary services. The argument is that those who don't check bags shouldn't bear the cost of bags, and those who want a wider seat should have that option. And pricing can become even more customer-centric, offering a discount for purchase of a bundle of such services.

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Topics: Aviation, Revenue Accounting

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Expanding the True Single View of an Airline Customer

Airlines have the opportunity to map a customer’s lifecycle — to go through the entire journey and learn about their needs at each touch-point. But corporate buzzwords aside, getting to know a customer has been key to driving loyalty since before the days of electricity, let alone the commercial flight. And with the increase in portable and wearable devices, both for the customer and airline staff, the opportunities have increased exponentially.

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5 Great Ways Airlines Are Using the Internet of Things

The Internet of Things is here. In short, it’s the ability for everyday objects to be connected via a network, so they can be run smarter, safer, and more intelligently.

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All-In Rates: The Future of the Air Cargo Industry?

There is a reason why major travel sites like Kayak and Expedia display plane ticket prices after all taxes, fees and surcharges have been added: it’s because customers don’t want to see what they thought was a $200 ticket turn into a $300 ticket at checkout, thanks to the addition of fees and surcharges—which are sometimes vague and questionable.

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The Fintech Revolution: An Opportunity for Airlines

Financial technology - more popularly known as Fintech - is a madly exciting and booming field that impacts every aspect of business and personal life, from loans and fundraising to mobile payments and asset management. The sheer amount of promising startups is tantalizing. But what these companies can do is even more exciting.

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Predictable Disruption: Why Airlines Need to be Proactive to Spot the Next Wave

Predicting future disruptions is a game-changer for industries in the 21st century, especially airlines. The cost (and size) of technology is shrinking while output is expanding at a rapid rate. This increase in productivity opens new doors to revolutionary levels of efficiency, comfort, and sales.

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Brexit: What Does It Mean for Airlines and Travelers?

The vote is in. The United Kingdom is leaving the European Union. And everything and everyone from the stock markets and the pound to David Beckham are anxious. Where the effects may be felt most acutely is in the air travel industry. For now, so much remains uncertain. One thing is for certain, though: travel rules and agreements between the UK and the EU and between the UK and the rest of the world will undergo a transition that will most likely cause noteworthy changes for airlines and travelers.

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How Blockchain Technology Can Revolutionize Air Cargo

Air cargo transports over $6.4 trillion dollars worth of goods annually. With so much capital changing hands, the little things matter. Even the smallest innovations can save millions of dollars. Likewise, even minor acts of fraud can account for millions in losses.     As such, blockchain technology could be the most dynamic innovation in air cargo in years. Its ability to increase efficiency, cut down on costs, and reduce fraud could transform how air cargo is managed.

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Effective Airline Cross-Selling Using Market Baskets

“Customers who purchased x typically also purchased y.” We’ve all seen this pitch in e-merchandising.  And often times this can be useful information for customers. Yes, having purchased 'x', potentially 'y' will be something I will also want.

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Differentiating Touchpoints for the Premium Airline Customer

Premium passengers remain the lifeblood for many airlines services and routes, that much is clear. Airlines continue to invest billions of dollars in the hard product — seats, entertainment, WiFi, lounges — to win and retain high value passengers.

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Why Real-Time Piece Level Tracking is a Competitive Advantage for Air Cargo

We live in a world that values transparency and convenience. We don’t want delayed information; we want it all in real-time. With just the click of a button, you can see how your investment accounts are rising (or falling), if your lunch order has been sent out for delivery, and whether the money your friend transferred you for concert tickets has reached your bank account.

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Topics: Aviation, Cargo

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Harnessing the Power of Air Cargo Analytics to Improve the Supply Chain

  FedEx, the world’s largest cargo airline, shipped 16 billion freight ton-kilometers (FTK) in 2014. That’s a lot of weight. Simply put, air cargo is one of the quickest and most used ways of transporting goods from warehouse to customer, and its efficiency is crucial to the success of the global economy.

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How Data Can Drive Airlines to a Prosperous Future

  Whether it’s lost luggage, waiting on the plane for a mechanical problem to be fixed, or a last-minute gate change, we’ve all been there. One airline or another has let us down. What’s alarming is that many of the most common complaints, such as ticketing issues, overbooking, and delays, could be easily handled with better use of technology. Or, at the very least, the situation could be made less stressful for the passenger.

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Improving the Airline Customer Journey with Real-Time Personalization

  As crucial as marketing is to the customer journey, our ability to analyze its effectiveness is oftentimes deeply flawed. This is as true for the airline industry as it is for any other. One of the biggest mistakes airlines make when trying to tease out the causes behind a customer’s decision-making process throughout their purchasing journey is to view each stage and each medium separately.

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4 Airline CFO Concerns During Record Earnings

  According to IATA, airline equity owners will see a far better 2016 than ever before - a 9%+ average return-on-invested-capital. With fuel prices down, the industry is realizing record earnings performance, with U.S. airlines doing especially well.

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Talking to Airline Customers in the Places Where They Are

Airline travel remains one of the most emotive experiences in our modern lives. Yet so much airline marketing is general, untargeted and uninteresting to modern consumers. Part of that is understanding the goal, and part of it is how to get there.

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Digitization in Air Cargo: The Time is Now

  Three years ago, the initial e-AWB kick-off promised air cargo documents would be completely digitized by the time 2016 rang in. But we're nearly halfway through 2016 and digital penetration has yet to hit 40%.

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4 Ways Airlines Can Use Big Data To Make Customers Love Them

  In an excellent piece on how Amazon uses big data to win over customers, Sean Madden explains exactly what Amazon does right that so many of its competitors do wrong: “In order for interactions to feel individualized and human, they must be well informed.”

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Revenue Accounting Standards for Customer-Centric Airlines

What does a new airline customer-centric revenue accounting system look like? IATA’s New Distribution Capability (NDC) offers an industry protocol for ancillary fees. IATA also has proposed replacing airlines’ current parallel, but separate, airline booking/payment systems with an integrated one built around the customer; this is their new proposed “One Order” initiative. Combining these two initiatives can offercustomer-centric revenue accounting that facilitates personalized offer management and customer profitability tracking. What would such a new system entail?

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5 Airline CEO's Rising to the Innovation Challenge

In an era of digital disruption, an on-demand economy, and fierce competition, global airline CEOs are looking to dramatically improve the way they listen to, understand, communicate with, and serve customers. Despite the airline industry boasting many more high-profile brands globally than any other area of commercial activity, very few CEOs  push themselves forward as outstanding leaders in today’s market.

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3 Air Cargo Carriers Keeping the Cold Chain Cool

 The air cargo industry is facing transformational change due to the growing demand in the secure and reliable transportation of temperature-sensitive goods. Given the increase in quality standards, growth in volume of products, capacity constraints, and mounting regulations, air cargo carriers face a constant challenge of adapting their cold supply chain processes to achieve compliance and maintain product integrity.

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6 Characteristics of High-Performance Digital Airlines

 In an industry that makes just $8.27 for each passenger that boards a flight, there’s not much room for error when it comes to building an integrated digital strategy. Before launching any digital initiative, consider these six tactics to ensure effective deployment, future-proofed technology solutions,and smart, innovative uses of new-generation digital platforms. The final goal is simple, build profits with every every transaction and customer.

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Which Cabin Class Is the Most Profitable for Airlines?

 Lufthansa is introducing the Airbus A350 early next year. The announced configuration for this aircraft is 48 business, 21 premium economy, and 224 economy seats – no First Class. The aircraft it will replace has 8 First Class seats and fewer economy seats.

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It's Time for Airlines to Take Data Science and Artificial Intelligence Seriously

The big data revolution isn’t just about understanding customer experiences, diagnosing pinch points, and adapting business practices, it’s about using

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Topics: Aviation

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CMOs and CIOs Collaborate to Re-Define the Airline Customer Experience

When airlines started un-bundling their products, customer frustration mounted and loyalty declined. To address the problem of waning loyalty, airlines have significantly increased their spending

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How Much is Your Airline Revenue Database Worth?

For many companies now, the customer database represents the entire basis for the continued financial success of the business. For internet orvirtual companies, this is more obvious. Google is able to

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Driving Uptake by Making the IoT Useful to Airline Passengers

The Internet of Things: it sounds exciting, is a little reminiscent of a dystopian movie title, and means many different things to many different people.Gogo calls it “the framework of sensors virtually connecting the physical world with processes that

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From Touch-points to Journeys: Seeing Through the Lens of an Airline Customer

Customer journey mapping, a methodology that helps visualize a brand’s customer experience through the eye of the customer, is growing in popularity

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4 Ways to Drive Airline Revenues

  Venture capitalists in Silicon Valley speak of “unicorns,” or extremely rare start-ups that will, in time, turn into $1 billion enterprises. They invest in a variety of businesses, with the intention that potentially one will become the big winner, like a Facebook or Google, justifying the investment, not just in that specific company but in the many other investments it took to find “the one.”

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Conversational Commerce Takes Off for Airlines

  In the retail space, 2016 has been dubbed the year of conversational commerce. But the desire for airlines to meet customer expectations while still optimizing business processes is also driving the deployment of conversational commerce across our industry.

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Topics: Aviation, Customer Experience

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5 Ways Air Cargo Carriers Can Compete in an Era of Digital Disruption

Digital disruption is a catalyst for change in just about every industry today, and the air cargo sector is no exception. But is this type of disruption just an over-hyped concept, or can the air cargo industry truly benefit from embracing it?

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Topics: Aviation, Cargo

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Creating an End-to-End Air Travel Experience

To enhance the flying experience and meet ever-increasing consumer expectations, airlines have started to focus on creating a customer-centricand door-to-door experience for their passengers. They seek to harmonize the entire customer journey to make air travel smoother, less stressful, and more personalized.

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The Quality of Airline Earnings Depends on Quality Revenue

When financial Accountants talk of "Quality of Earnings," they are referring to an analytically-intensive process by which they assess sustainabilityof earnings – not just whether corporate earnings adhere

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Topics: Aviation, Revenue Accounting

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5 Ways to Increase Airline Ancillary Revenue

For the global airline industry, ancillary revenue reached almost $60 billion in 2015, according to IdeaWorks, a consulting firm that tracks airline ancillary revenue.  This revenue source for airlines has been said  to be critical to current airline profitability. But, from an industry standpoint, there is still not a clear definition for "ancillary."

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How to Create a Customer-Centric Air Cargo Supply Chain

Carriers can leverage technology and a customer-first corporate culture to deliver outstanding service, but that’s not always enough - the entire supply chain needs to be equally as focused on and capable of meeting customer expectations.

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4 Ways to Boost Conversion Rates with Airline Content Marketing

Airline marketing has been turned upside down by the arrival of big data analytics. Where airlines could once do little more than make rough estimatesabout how effective their marketing strategies were, modern analytics tools can now provide precise data on customers on an individual level.

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How Real-Time Monitoring Has Altered the Air Cargo Landscape

The air cargo business is changing at an extremely fast pace, particularly for carriers. Clients, particularly larger ones, are demanding more capabilities from their shipping

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How Airline CMOs Can Grab Attention and Revenue in Seconds

Timing is everything in marketing, and recent research by Google shows that there are dozens of moments in a consumer’s day when they’re likely to pounce on offers. Google calls these “micro-moments,” and they’re changing the game for brands hoping to connect with customers and grab more market share by delivering sophisticated advertising and promotional campaigns.

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Topics: Aviation, Customer Experience

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How does an airline value its branded fares? (Infographic)

Branded fares refers to a re-bundling of ancillary services – otherwise purchased à la carte - into one easy-to-purchase fare. As with the bundling of products offered in other industries, including software offered as a “suite” and fast food items as a “meal,” these new re-bundled fares are theoretically designed as up-sells, driving more ancillary purchases.

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Topics: Aviation, Revenue Management

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Challenges and Opportunities in Air Cargo Revenue Management

  Revenue management has been utilized within a wide range of industries for over three decades. Passenger airline carriers were the first to leverage the benefits that revenue management brings to a business.

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Topics: Cargo, Revenue Management

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How to Use Customer Analytics to Create Personalized Airline Offers

  With the increased availability of big data, the notion of the customer has become more granular. Air travel marketers no longer segment the market based on gross demographic or purchase characteristics (age, total travel spend).

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The Anatomy of an Airline Digital Transformation Strategy

Adapting to the new realities of the digital world has been particularly challenging for the aviation industry. Air travel has always been an IT-intensive business, and most airlines were already heavily invested in legacy IT systems prior to the advent of modern digital platforms.

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Is Social Messaging the New Normal in Airline Customer Engagement?

  In previous decades, airlines only had to focus their attention on a limited number of media channels in order to make sure their message was heard. Radio, television, and print constituted the vast majority of the time

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The Top Announcements from IATA WCS 2016

  With the biggest event for the air cargo industry of the year officially behind us, we take a look at the most notable IATA WCS 2016 announcements that were made last week in Berlin.

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Look Out Air Cargo, Here Comes Amazon

The rumor that Amazon is creating its own air cargo network was confirmed in mid-March when the company announced that it has taken its first step into the air cargo market and leased 20 Boeing 767 cargo aircraft from Air Transport Services Group (ATSG) to handle its freight requirements for the next 5 to 7 years. 

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Creating Intelligent Airline Product Offerings to Maximize Revenues

Sales of ancillary products are a primary driver of an airline’s bottom line, making up 20% of its revenue, according to a study by IdeaWorks. Ancillary revenues were projected to reach $59.2 billion in 2015, up 18.8% since 2014. And while roughly 20% of ancillary receipts for U.S. carriers come from baggage fees, the remainder comes from sources such as on-board food and beverage sales, WiFi, seat upgrades, and priority screening and boarding.

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4 Characteristics of a Winning Digital Airline Strategy

By 2034, more than 1.15 billion people will be flying on U.S. airlines and IATA’s 20-year passenger growth forecast has predicted a global uptick to 7.3 billion by that year – an annual growth rate of 4.1%.

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Build Your Own Passenger Experience — The Future of Flying?

You can’t please all of the people all of the time — and nowhere is this more evident in an airline’s attempt to customize for the masses. Delivering the same slate of options to passengers regardless of individual preferences is an approach doomed for failure. Enter ancillaries. With slim profit margins on fares, many airlines have already unbundled their services, offering upgrades, VIP passage, and more as add-ons.

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Transforming Air Cargo Business Models with the Internet of Things

Over the past few years, the Internet of Things has become something of a buzzword in a number of industries. Referring to the network of connected and interlinking physical devices, largely driven by sensors and location-based services, IoT is a hot trend that is poised to become more the new normal than newfangled fad.

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Topics: Aviation, Cargo

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How 3D Printing Changes the Economics of Air Cargo Transportation

The recent collapse in oil prices has given the air cargo industry  some breathing room. With margins expanding, some air cargo carriers may be tempted to rest on their laurels. But airlines should instead take the recent calm as an opportunity to get a jump on the challenges that await the industry further down the line. Among the trends likely to impact the sector in the future is the advent of 3D printing.

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Unifying Airline Metrics: Avoiding Possible Misdirection?

How does one get an organization to march in the same direction in its entirety? How can airlines align objectives across a large and functionally diverse organization? With often competing objectives, can we really get marketing, operations, finance, and customer service on the same page?

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Topics: Aviation, Revenue Accounting

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5 Ways Airlines Can Deliver an On-Demand Customer Experience

If you’ve heard of Uber, you’re likely familiar with the mechanics of the on-demand economy. The on-demand economy is defined as “economic activity created by technology companies and digital marketplaces that fulfill consumer demand via the immediate provisioning of goods and services.” Also known as the gig economy or platform economy, it essentially refers to the task of matching service supply with consumer demand via software and mobile devices.

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Developing a Disruptive Mindset to Improve the Air Cargo Experience

One of the biggest challenges that incumbents in the air cargo industry have faced in recent years has been the appearance of new competitors expanding into the industry from other sectors. Companies like Amazon and Alibaba have leveraged their experiences in supply chain management, customer relationship management, and various other competencies to radically alter the competitive landscape. 

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Topics: Aviation, Cargo

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Metasearch: Friend or Foe for Airline Ancillary Revenue?

With the ability to show consumers a number of flight choices and compare and contrast airline offers from a single screen, metasearch engines like Kayak, Skyscanner, and Momondo are becoming one of the most popular ways to book travel.

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Topics: Aviation, Revenue Accounting

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Airline Profit Management: Moving Beyond Revenue Management

Now is the time for airline “revenue management” to evolve to “profit” management. Post-purchase ancillary revenue, including on-board meals and change fees, has led many managers to consider “total” revenue management as opposed to only managing the base fare.

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Airline Retailing Starts with Understanding the End-Consumer

The airline industry’s adoption of the New Distribution Capability (NDC) promises to be one of the most significant developments in marketing and customer experience in decades. The deployment of NDC can be seen as part of a broader shift within the air travel sector to move toward a more traditional retail model, where travel providers consider all of their passengers’ needs.

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Increasing Collaboration in the Air Cargo Perishables Supply Chain

The delivery of perishable goods to retailers and supermarkets has become one of the most important services air cargo companies provide. Perishable goods can represent as much as 40% of the revenues generated by grocery chains. But as lucrative as perishables may be, they represent some unique challenges to the logistics supply chain, including air cargo carriers.

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Maximizing the Potential of Next-Generation Airline Merchandising

Airlines’ ancillary revenue has grown dramatically in the last decade. From $2 billion in 2007, it has since increased to an estimated $43 billion in 2013, and has become representative of a major driver of profitability for most carriers. But despite this rapid growth, airlines have likely only seen the tip of the iceberg when it comes to the potential of ancillary revenues.

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Increasing Air Cargo's Share in Pharmaceutical Transportation

The global pharmaceutical industry is booming, with expectations that it will continue to do so for the foreseeable future. The market for temperature-managed services, such as pharmaceutical shipments, was estimated to be $8.36 billion in 2014 and is projected to rise to $10.28 billion by 2018.

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Topics: Aviation, Cargo

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The Future of Global Distribution Channels: New Horizons for Airline e-Commerce

Earlier this year, Lufthansa announced that it was adding a surcharge to all bookings made via global distribution systems in an attempt to funnel traffic to direct bookings. But, this is a surprising announcement in an industry where even low-cost carriers in markets that have resisted using a GDS are coming around to the realization that they are missing a huge opportunity for revenue.

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One Order – Another Breakthrough in Airline Merchandising

In the new world of e-merchandising, airlines still lag significantly. Airlines have introduced much more choice - including various ancillary services, beefed up their websites and social media presence, and introduced targeted e-marketing campaigns. But they still don’t match the sophistication of many retailers. Amazon for example, and not American Airlines or Delta, is the e-tailer everyone is trying to emulate.

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Topics: Aviation, Revenue Accounting

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5 Things You Need to Know About Airline Mobile Marketing

Internet users are quickly transitioning from desktop environments to mobile devices. This shift is affecting all industries, and air travel is no exception. By 2017, 10% of airlines' revenue will come from mobile channels, accounting for $70 billion.

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C2K: Increasing Air Cargo Visibility from Airport to Airport

For the past 18 years, IATA's interest group Cargo 2000 (C2K) has worked to establish and enforce quality standards throughout the global air cargo industry.

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4 Benefits of Predictive Analytics for Airline Revenue Accounting

Predictive analytics takes historical data and searches for patterns that can be used to anticipate and respond to future events. By leveraging the huge potential of a predictive model, airline revenue accounting departments can minimize revenue leakage, increase profits, and build more efficient and effective financial processes.

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4 of the Best Airline Content Marketing Campaigns – And Why They Work

Airlines across the world have stepped up their content marketing game, leveraging website content, blogs, apps, and social media to engage customers, build loyalty, and promote new routes and benefits.

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Optimize Airline Merchandising with A 720° Degree View of Your Customers

What does it mean to have a 720° degree view of an airline customer? A 360° view includes all contacts a customer has with an airline regarding their travel

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The Importance of Getting Your Air Cargo SLAs Right Every Time

Service Level Agreements, or SLAs, outline the type and quality of service between carriers and freight forwarders. This single document can have profound ramifications for the technical and operational aspects of air cargo companies, including the format of electronic records to be used (such as Cargo-IMP or Cargo-XML),how shipment record information is to be recorded, and how to deal with instances where air waybill data is rejected by a carrier’s system due to syntax errors.

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Airline Merchandising Based on Traveler Intent

A hot topic in air travel merchandising – and in e-retailing in general – is the move toward personalization. Merchandisers are advised to know their customers and tailor their offerings to meet their specific needs.

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The Changing Role of Loyalty in Wider Airline Strategy

Loyalty has less of a role in the wider airline strategy than in earlier years. Customers have more opportunities to compare ticket prices between carriers than ever before, and are much more willing to cherry-pick offers with little regard to carrier loyalty.

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4 Things to Consider When Outsourcing Airline Services

One of the biggest challenges facing airlines in the current environment is the need to minimize operating costs. While air travel has never been a high-margin business, the pressure to lower costs in order to better compete on price has never been higher.

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5 Tips for Optimizing Flight Reconciliation

At any given time, there are more than half a million passengers in the air. And as anybody who has ever flown can attest, sometimes, the process is not as simple as showing up at the airport check-in counter with a ticket and boarding a flight.

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Unlocking the Revenue Potential of Your Infrequent Flyers

  Airlines have typically focused the majority of their attention on their most frequent travelers. Ever since American Airlines introduced the concept of traveler loyalty programs with its frequent flyer club in 1981, the amount and type of benefits accrued by members have been based on the number of actual miles flown.

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Increasing Direct Airline Bookings - One Step at a Time

Lufthansa‘s controversial plan to pass through GDS costs is intended to drive more direct bookings. By charging customers for GDS costs, passengers will have an immediate – and significant financial incentive – to book on Lufthansa.com rather than through third parties that don’t offer direct connect.

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Consumer e-Commerce: Is Air Cargo Ready?

People may be sending fewer letters, but they’re definitely not sending – or receiving – fewer packages. In the United States alone, according to FedEx Ground President and CEO Henry Maier, the e-commerce market is expected to top $300 billion in sales. And a report by eMarketer showed that the global B2C e-commerce sector is expected to hit $2.3 trillion by 2017.

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6 Ways Successful Airline Merchandisers Create Branded Fares

Branded fares refers to a re-bundling of ancillary services – otherwise purchased à la carte - into one easy-to-purchase fare. As with the bundling of products offered in other industries, including software offered as a “suite” and fast food items as a “meal,” these new re-bundled fares are theoretically designed as up-sells, driving more ancillary purchases.

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More Thanksgivings: Managing Peak Air Travel Demand

Thanksgiving has traditionally been a major annual event for U.S. airline revenue management departments. In the U.S., Thanksgiving always falls on the fourth Thursday of November and, traditionally, it is a major family holiday.

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The Ultimate Cheat Sheet on CRM for Millennial Travelers

 One of the most difficult challenges facing consumer-oriented industries today is engaging with millennial customers. This has been as true for airlines as any other business.

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Airline Loyalty Analytics Exposed – What Are Your Passengers Worth?

American Airlines was the first company in our industry to develop a program to reward frequent flyers. AAdvantage launched in May of 1981. United, Delta, and TWA introduced their loyalty programs very soon after American’s offer debuted, making 1981 the year of the Frequent Flyer.

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Sustaining the Value of Air Cargo for the Future

According to the International Air Transport Association, global air freight demand was on track to grow 4.5 percent in 2015 – outpacing global trade, which is forecast to increase 4 percent this year. This is partially due to growth in the Asia-Pacific region and the Middle East.

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Innovating at the Speed of Disruption in Aviation

Disruptive technologies, ideas, and businesses – not too long ago these were issues that airlines faced only once or twice a decade. Now, if you’re not continually moving faster than the speed of disruption, your business may be at risk.

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The Next Transformation in Travel Booking: Intelligent Search Discovery Systems

The power dynamic between passengers and airlines has changed significantly in recent years, thanks to new information technologies. Consumers in every industry, including air travel, are empowered to search through vast amounts of data to find the exact offer they want for the minimum price.

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Topics: Aviation, Customer Experience

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Competing with LCCs

The arrival of low-cost carriers (or LCCs for short) is one of the most significant developments the airline industry has experienced in the last several decades. Companies such as RyanAir and EasyJet in Europe and Spirit, JetBlue, and Southwest in the United States, have challenged established carriers by developing new business models centered on competing for customers on price rather than amenities. In a few short years, LCCs have gone from a niche business to a major force in the airline industry.

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Topics: Aviation, Revenue Accounting

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The Impact of NDC and One Order on the Air Travel Industry

Two initiatives within the airline industry, One Order and the New Distribution Capability (NDC), have the potential to affect both system providers and airlines by creating a standard for using NDC documents as the single, canonical record for customer orders, eliminating the need for a separate ticket or Electronic Miscellaneous Documents (EMD). The shift toward the One Order and NDC standards will serve to modernize the multiple and rigid booking, ticketing, delivery and accounting methods with a single, flexible order management process.

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Topics: Aviation, Revenue Accounting

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The Right Digital Tools Can Make Change Management a Breeze

Adapting to change is often one of the most difficult tasks for an organization to accomplish. Even the most innovative and forward-thinking enterprises can find it difficult to keep up with the constant rate of change in the modern business environment, particularly in a sector as dynamic as air transportation. 

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Airline IT Tools for the Digital Age

In the last two decades, digital technologies have transformed businesses as diverse as the medical, education, and transportation industries. The advent of the digital era has been an enormous benefit to many sectors, providing new ways to drive efficiency and increase performance. At the same time, adapting to the digital age has presented considerable challenges, particularly for legacy organizations that were already heavily invested in older systems and IT infrastructure. This has been a particular issue for legacy airlines.

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Bundling is Back at Airlines

Most airlines used to offer a “bundled” fare, which meant that the fare included free checked bags and ticket changes (customers to only pay the difference in fare).  Famously, in 2008 U.S. airlines collectively launched a new “ancillary revenue” strategy which unbundled the base fare and began charging for checked bags and changes -- along with standby fees, on-board meals, and assorted other optional services.  IdeaWorks, a global airline consulting firm, has tracked the growth in ancillary fees and reported that global airline ancillary revenue reached $50 billion in 2014.

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Topics: Aviation, Revenue Accounting

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Cargo Airline Alliances and Partnerships: Maximizing Value in a Challenging Landscape

Cargo airline alliances can improve speed and costs by creating seamless coordination and delivery throughout a global alliance network for international air freight services. Aided by a liberalized global environment, Open Skies agreements, and the prohibition of foreign ownership (leading most airlines to a joint venture rather than a full merger), cargo alliances and partnerships are the future of the industry, say industry experts.

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How Smarter Regulations Encourage Air Cargo Profitability

  Regulatory challenges have long been felt in the air cargo industry, with overzealous rules and laws hampering profitability and a maze of varying standards throughout the world complicating communication and compliance. Yet the call today is for smarter regulations – not necessarily stricter or more prevalent.

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The Quantified Value of Customer Experience

One of the most significant developments in the business world in recent years has been the increased ability of organizations to quantify and analyze an ever-increasing number of variables affecting their business. The ability to gather, collate, and manipulate new types of data has opened up new realms of possibilities and given management teams an unprecedented level of insight into the key factors in their operations.

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Topics: Aviation, Customer Experience

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Exploiting Risk for Increased Airline Profits

Recent stock market volatility, in China, in the United States, in other world markets, had many investors very nervous about their holdings. But volatility can be extremely profitable. In fact, in finance parlance, volatility or “risk” is associated with higher expected returns. Also, sophisticated traders rely on “puts” and “calls” and other derivatives to limit their downside and take advantage of large swings.

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Topics: Aviation, Revenue Accounting

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Customer Loyalty in the Digital Age

It wasn’t that long ago that travelers had only one or two ways to buy airline tickets. They might have contacted an airline directly or, more typically, made arrangements through a travel agent.

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Topics: Aviation, Customer Experience

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The Importance of Integrating Airline Financial Processes

Our industry is challenged to deliver excellence on a daily basis. To do so, an airline must successfully manage a multiplicity of operational challenges ranging from weather conditions, customer expectations, narrow profit margins, and efficient utilization of resources.

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Topics: Aviation, Revenue Accounting

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Key Takeaways from IATA WFS 2015

IATA WFS 2015 in Barcelona saw the gathering of industry thought leaders and financial experts united around the theme “Supporting Sustained Airline Financial Health”, and provided

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Topics: Aviation, Revenue Accounting

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The Interlining Capability of ULDs

Unlike the vast majority of highly valuable businesses assets, aircraft Unit Load Devices (ULDs) are rarely in the possession of their owners. During a single cargo movement, a ULD might be transferred between a dozen or so different parties.

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Topics: Aviation, Cargo

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Returning to Luxury: How Airlines Can Make Flying Fun Again

Despite investing millions of dollars to improve the passenger experience, the airline industry routinely sees itself ranked at or near the bottom of customer satisfaction surveys. Where

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An Insider’s Guide to IATA WFS 2015

With the second edition of the IATA World Financial Symposium (WFS) just a week away, and so much to take in during the event, it’s essential to plan ahead on how to best spend your time

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Topics: Aviation, Revenue Accounting

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How Airlines Use Digital Tools to Distinguish Themselves from the Competition

The world has undergone a revolution in digital technologies since widespread Internet use began to take off in the mid-nineties.As information technology has touched every aspect of our lives, airlines have had to adapt many of the ways in which they do business. 

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The End of the Airline Price Wars?

Over the past several decades, airlines have watched as their customers have grown increasingly price sensitive. This was partly due to the effect internet technology

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Strengthening the Value Proposition of Air Cargo

After a brief growth spurt at the end of 2014, the global air cargo market is slowing down again.According to the International Air Transport Association (IATA), air cargo measured in freight tonne

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Topics: Aviation, Cargo

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How Predictive Analytics is Reshaping the Airline Industry

Imagine being able to offer the most profitable package for any given traveler – one that they are most likely to buy and most likely tocome back because of. The catch is, this traveler has never flown with you before.

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Beacons: Transforming The Travel Experience

Among the various new technologies that promise to fundamentally alter the way passengers travel, beacons represent a particularly exciting opportunity for airlines, travelers, and airports. Beacons, which are just now beginning to be tested on a wide scale, have the potential to affect air travel in a variety of ways, making it easier and faster for passengers to get through the airport, increasing efficiency for airlines, and offering retailers the opportunity to market directly to consumers based on their location and preferences.

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Topics: Aviation, Customer Experience

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Best Practices for Air Cargo Receivables Management

Today’s market challenges require fast and accurate revenue accounting to support tactical operational and business decision making. Some of the challenges that arise with air cargo receivables are the need to quickly and accurately identify receivables, reduce airline revenue leakage, and minimize the need for manual intervention.

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Topics: Aviation, Revenue Accounting

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The 3 Biggest Loyalty Trends of 2015

Like all aspects of the airline industry, customer relationship management and customer loyalty programs are changing dramatically as new technologies become increasingly prevalent. Changes in customer behavior and expectations are also driving airlines to come up with more innovative way to inspire customer loyalty.

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Topics: Aviation, Customer Experience

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Transforming the Air Cargo Customer Experience with Mobile Technologies

Shippers opt to move their goods by air for one crucial reason: speed. Shipments of high value goods that require special handling while in transit are up, and delivery deadlines are tightening. Rapid transport is the key differentiator that trumps price, therefore the industry needs to deliver efficient service.

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Topics: Aviation, Customer Experience, Cargo

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Simplifying the Business: New Distribution Capability (NDC)

Simplifying the Business (StB) is an IATA industry initiative aimed at making it easier for partners and customers to do business with airlines in ways that also deliver value to our industry. StB primarily delivers on its mission through the development of new industry standards and supporting the industry in the implementation of these standards. 

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Topics: Aviation, Revenue Accounting

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Transitioning from Cargo-IMP to Cargo-XML

Many airline cargo departments are in the process of converting their systems from the existing Cargo Interchange Message Procedures (Cargo-IMP) format to Cargo Extensible Markup Language (Cargo-XML), the new preferred standard for electronic communications between airlines and other partners in the air cargo sector such as shippers, freight forwarders, ground-handling agents and regulators, as well as customs and security agencies. The new format has been endorsed by organizations such as the Cargo Committee, Cargo Services, and Cargo Agency Conferences, and supports multimodal and cross-border messaging.

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Topics: Aviation, Cargo

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The Impact of NDC on Airline Revenue Accounting

Over the decades, airline revenue accounting has evolved into a highly complex system, involving a significant number of processes and unique rules. These processes can produce silos separating finance and revenue accounting departments and associated inefficient duplication of efforts.

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Topics: Aviation, Revenue Accounting

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Expanding the Reach and Use of SIS e-Invoicing

Simplified Interline Settlement e-invoicing, or SIS e-invoicing for short, is a new electronic invoicing initiative designed to facilitate the exchange of billing data information and digital invoicing in the air transportation industry.

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Topics: Aviation, Revenue Accounting

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Shipping Temperature-Sensitive Air Cargo Requires Intelligent Cool Chain Solutions

Transporting delicate cargo that is sensitive to temperature changes is one of the fastest growing revenue streams for air cargo companies.As the pharmaceutical industry has expanded, so has its need to ship temperature-sensitive

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Topics: Aviation, Cargo

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The Impact of Emerging Technologies on Airline Service Delivery

Air transportation, whether for passengers or cargo, is one of the most technologically dependent businesses in the world.Aircraft represent some of the most advanced pieces of engineering ever designed, and are constantly being updated

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Topics: Aviation, Customer Experience

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Air Cargo Predictive Analytics

  The old saying “hindsight is always 20/20” is becoming increasingly dated in the business world. It refers to the fact that we can always see the past clearly, and know exactly what we should have done in retrospect.  But as we

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Topics: Aviation, Cargo

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Airline Merchandising: How Data and Innovation Can Set You Apart

Like it or not, air travel has become a commodity. There’s really no changing that. According to the American Customer Satisfaction Index, travelers want quality service at a fair price – emphasis on “service.”

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Managing Airmail with an Integrated Air Cargo Management Solution

  Airmail has undergone a significant transformation in the past several years. Like much of the sector, the businessof air postal service has quickly moved from a paper-based system of documentation and tracking to an electronic format.

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Topics: Aviation, Cargo

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Internet of Things and the Future of Air Travel

The practice of networking together collections of physical objects in the real world, broadly referred to asthe Internet of Things, has already had a major impact on sectorsas diverse as logistics, home appliances,

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Topics: Aviation

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The Future of Airline Partnerships – Revenue from Technology Enabled Interline Agreements

Partnership agreements between airlines provide an excellent opportunity for companies to generate new revenue streams. Interline agreements can expand an airline’s customer base while increasing the number of route options it can provide to existing clientele.

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Topics: Aviation, Revenue Accounting

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Air Cargo Asset Optimization: Enhancing Efficiency, Improving Safety, and Reducing Costs

After years of dire news about the state of a recession-battered air cargo industry, are the winds are shifting? Air cargo carriers are beginning to look at making new investments to secure their growth in a dynamic market.

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Topics: Aviation, Cargo

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Real-time Uplift Processing in Revenue Accounting

The second a flight takes off, the demands for financial data begin. Real-time reporting has always been a critical part of business intelligence for airlines. It’s obviously important to know how sales correlated with that flight’s reality, both for revenue accounting purposes and business decision making.

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Topics: Aviation, Revenue Accounting

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Why (and How) Airlines Should Go SoLoMo

SoLoMo is an acronym that refers to the convergence of Social, Local/Location-Based and Mobile marketing. It represents an opportunity to micro-target consumers who have demonstrated an interest in services or goods that a brand provides. A consumer’s interest triggers messaging with relevant content or a promotional offer that is designed to meet that consumer’s particular needs at the momentand be shared on social media.

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Topics: Aviation, Customer Experience

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Threats to Profitability in the Air Cargo Industry

It’s obvious to anyone in this industry that the air cargo business is in the midst of a major change. New players in the cargo space are rapidly acquiring market share, customers have increasingly sophisticated needs, and new ways of doing business – such as an increased reliance on near-shoring – are negatively impacting cargo capacity demand.

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Topics: Aviation, Cargo

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How Wearables are Changing CRM for Airlines

Fostering customer loyalty is an important challenge for modern airlines, but one that has grown increasingly difficult to meet. As travelers have become more sensitive to ticket prices and modern information systems have made it easier for them to shop around for the best deals, airlines have found it more difficult than ever to hold on to their existing clientele.

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Topics: Aviation, Customer Experience

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Disruption Management in Airline Revenue Accounting

Disruption management is a continual process in the airline industry. We are tasked with handling conditions that are often out of our control – weather, strikes, airport construction, connecting traffic, capacity shifts, just to mention a few. The logistics involved in managing these shifting issues are complex and challenging.

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Topics: Aviation, Revenue Accounting

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The Top Technology Priorities on the Minds of Airline Leaders

Airlines have certainly become smarter over the past few years, putting profits over market share and using technology to drive intelligent planning and more efficient business processes. Big data and airline IT solutions are playing a significant role in this matured business model. Rather than engaging in endless price wars, the focus now is on delivering customer-based pricing and personalized services.

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Topics: Aviation

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6 Factors That Influence Your Air Cargo Pricing Strategy

The complexity of the air cargo business demands a dynamic pricing strategy that allows carriers to quickly and efficiently adjust their rates in response to fluctuating market conditions. The carriers that learn to do this most effectively will have a distinct competitive advantage. How well is your airline using the following factors to set prices?

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Topics: Aviation, Cargo

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Growing Profit Margins with Ancillary Revenues

The ancillary revenues generated by services such as food and beverage sales, seat upgrades, and baggage fees, have increased dramatically in recent years. In 2014, ancillary revenuestotaled almost $50 billion for all airlines, almost double the $27 billion the industry generated in 2012. The use of ancillary services to grow revenues has been particularly important to the many low-cost carriers that have proliferated in recent years.

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Topics: Aviation, Revenue Accounting

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5 Ways Airlines Can Improve Business Efficiency with Workload Automation

Automation always sounds like a wonderful thing – letting go of unnecessarily time-consuming processes and handingoversight to a system that can free up your finance department for tasks and projects

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Topics: Aviation, Revenue Accounting

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Mobile and the Passenger Experience

In 2014, mobile traffic exceeded desktop traffic for the first time. That statistic underscores the fact that the world is increasingly mobile, and airlinepassengers are no exception. In fact, 97 percent of airline passengers carry a smartphone, tablet, or laptop, and 20 percent carry all three.

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Topics: Aviation, Customer Experience

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Handle With Care: Complying with Dangerous Goods Regulations for Air Cargo Safety

It is undeniably imperative that your air cargo department dot every “i” and cross every “t” when it comes to handlingand transporting dangerous goods.

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Topics: Aviation, Cargo

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3 Technology Trends Transforming Airlines

In the last several years, many new and emerging technologies have made a major impact on airlines. Whereas an airline’s IT infrastructure was once considered

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Topics: Aviation

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Better Interline Billing and Settlement: Managing the Complexity of Airline Revenue Accounting

Interline agreements represent a huge potential for revenue by opening partnerships with other carriers and expanding your customer base by offering travel with few limitations. The IATA Simplified Interline Settlement platform has opened up this market even more by encouraging the elimination of paper documents and streamlining the interline billing and settlement process.

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Topics: Aviation, Revenue Accounting

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Turning Big Data Into Smart Data: Using Information to Improve Customer Experience

Today’s consumers have plenty of choices when it comes to air travel and with so many options available, it’s now more important than ever to deliver an outstanding

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Topics: Aviation, Customer Experience

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Accelerate Compliance to Stem Airline Revenue Leakage

Compliance is rarely thought of as a profit center. But approached in the right way, compliance provides the airline industry with a detailed view across all critical

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Topics: Aviation, Revenue Accounting

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Increasing ROI through Business Process Outsourcing

Airline revenue accounting has changed considerably in the last several decades. Like all aspects of the aviation industry, revenue accounting has shifted away frompaper-based systems and legacy IT infrastructure to more robust electronic platforms with advanced data management and analytics capabilities.

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Topics: Aviation, Services

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Airline IT Implementations: 6 Essential Steps for Success

  There’s no denying that airline IT implementations can be demanding. But if you leverage lessons learned from your own experiences, and the best practices

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Topics: Aviation, Services

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Why e-Freight is Vital to the Air Cargo Industry

The International Air Transport Association (IATA) recently issued very specific guidance for air cargo carriers: Go digital or see your profit margins shrink even further.

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Topics: Aviation, Cargo

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Customer Service in the Cargo Industry

No matter how long you’ve been in the industry, the expansion of the air cargo market has likely had an impact on your revenue. With more airlines than

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Topics: Aviation, Cargo

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How to Maximize Revenue Recovery and Restrict Airline Revenue Leakage

In any business, it’s crucial – for obvious reasons – to get paid what you’re owed. While it takes a special kind of

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Topics: Aviation, Revenue Accounting

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Social CRM Strategies for Airlines

The vast majority of airlines already know that social media is a must-do for business success. But to get the best results out of your customer interaction project

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Topics: Aviation, Customer Experience

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Why Are Airlines Behind the Technological Times?

Airlines were among the first industries to wholeheartedly embrace IT solutions, in an attempt to improve safety

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Topics: Aviation

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Transforming the Air Cargo Industry for Future Success

Surprisingly, the air cargo industry has been losing market share to ocean carriers since the turn of the 21st century.

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Topics: Aviation, Cargo

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Enhancing Ground Operations for Specialized Supply Chains

It’s not for the faint of heart. Managing the logistics of the transport of goods and physical storage through a complex

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Topics: Aviation, Cargo

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5 Guiding Principles Our Customers Follow For a Successful Systems Migration

No company looks forward to moving a mission-critical aspect of its business system to another platform.Despite its anticipated benefits, the process of making the actual change is a challenge that becomes exponentially compounded when the system in question is as complex as an airline revenue accounting system.

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Topics: Aviation, Services

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Q&A with Sandeep Fernandes: Key Takeaways from WCS 2015

Mercator was recently the Principal Sponsor of the 9th IATA World Cargo Symposium in Shanghai. The event provided a great opportunity to meet with customers,

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Topics: Aviation, Cargo

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Best Practices for Managing Change When Implementing an Airline IT Solution

IT solutions and data analysis provide us with a wealth of information to drive profitable change. Change management

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Topics: Aviation, Services

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5 Ways Airlines Profit from Managed Services

Modern airlines are complex and vulnerable organizations, subject to rising costs, increasingly strict regulations, and a difficult global economy. All of this,

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Topics: Aviation, Services

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Tips to Maximize Your IATA WCS Experience

The IATA World Cargo Symposium will provide the opportunity for three days of intensive one-to-one meetings,

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Topics: Aviation, Cargo

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How the Air Cargo Industry Can Use Technology to Reinvent Itself

The air cargo industry may have reached a crucial point where a fast-track approach to digitalization is required to keep

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Topics: Aviation, Cargo

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5 Critical Questions to Ask a Potential Managed Services Partner

Strategic airline carriers know that outsourcing certain labor-intensive business processes can help free up resourcesand time to focus on growth. When choosing a partner to manage your passenger operations, cargo/logistics, loyalty/CRM, financial processes, and safety standards, however, you can face an overwhelming array of options.

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Topics: Aviation, Services

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3 Customer Retention Missteps That Will Cost You Money

With the proliferation of low-cost airlines and travel deal sites, the ubiquity of air travel, and the amplification that social media

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Topics: Aviation, Customer Experience

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Big Data and the Air Cargo Industry: The Five Keys to Success

The air cargo industry and Big Data are made for each other. In fact, it is hard to think of any other industry that can profit as 

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Topics: Aviation, Cargo

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7 Benefits That Drive Airline Managed Services

Until rather recently, cost-cutting was seen as the biggest benefit - and in some cases the only significant benefit of

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Topics: Aviation, Services

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Air Cargo in the Technology Age

One of the most important trends currently affecting the air cargo industry is the shift from legacy information technology systems to next-generation platforms.

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Topics: Aviation, Cargo

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Welcome to the Mercator Blog

Welcome to Mercator’s new thought leadership blog, a platform where we will share current and future challenges

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Topics: Aviation

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