Mercator Blog

Tom Bacon

Tom Bacon is an airline industry consultant based in Denver, Colorado. With 30 years experience in a variety of travel companies and business situations, he has a track record of dramatically improving profitability through innovative revenue strategies. He has led successful restructuring initiatives at American Airlines, SABRE, American Eagle, Bombardier Flexjet, and, through bankruptcy, Frontier Airlines. His experience extends through a variety of airline industry sectors including travel agency distribution, regional airlines, fractional airlines, international airlines and domestic low cost carriers.

Recent Posts

4 Ways To Improve Long-Term Airline Revenue Management

As we all know, airline revenue management is generally not a long-term proposition. Fleet planning looks out 5-20 years; route planning spans 1-5 years; but revenue management typically focuses on the short-term. Although flights can be booked up to 365 days in advance, most bookings still occur 0-60 days before departure, and for revenue managers, often 90+ days constitutes “long-term”.

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Topics: Aviation, Revenue Management

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Applying Dynamic Pricing to Airline Ancillary Fees

We all know that it’s possible to pay different fares for the same flight. One passenger pays $79 and the traveler sitting next to them could be paying $579, based on advanced purchase, inventory controls, and other often complicated rules.

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Topics: Aviation, Revenue Management

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Is Machine Learning the Future of Airline Revenue Management?

Great airline revenue management analysts are an invaluable asset to airlines. The 5+% increase in revenue attributed to a sophisticated revenue management system can be difficult to achieve without well-trained and highly experienced analysts who can properly use the system and intervene when appropriate. This means that, potentially, groups of 50 individuals could be responsible for $1-$2 billion in incremental earnings per year at each of the larger airlines – accounting for $20-$40 million per analyst.  (These guys deserve a raise).

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Topics: Aviation, Revenue Management

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How to Boost the Productivity of Your Airline's Revenue Management Team

Is your airline’s revenue management team “productive”? Are your revenue management analysts overworked or spinning their wheels? How do you measure productivity in revenue management? 

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Topics: Aviation, Revenue Management

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3 Things Airlines Should Consider Before Investing in a Revenue Management System

If the most sophisticated airline revenue management systems deliver over 5% more revenue, the return on investment (ROI) can be justified.  Any ROI calculation would rationalize the purchase and implementation. Because the leverage on revenue is typically so large, similarly, any module that provides another 1% is a clear “go”.

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Topics: Aviation, Revenue Management

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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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