Competitive realities of the airline industry

The airline industry is extremely competitive. Whether it is low-cost carriers or high-end domestic or international flights, you’ve always got competition!

Today, Competition intelligence, especially in the airline industry, has become a valuable asset for air carriers. The industry struggles with the collection and consumption of competition data. This keeps a lot of air carriers lagging behind their competitors by 6-9 hours when it comes to acquiring competition intelligence. Additionally, with progress in technology, one can now capture large amounts of competition data. But does the industry have the means to process all of it? Are air carriers able to derive insights from it?

We tracked the air traffic on the Hyderabad to Bangalore and its return route to find special cases where there was revenue lost. This route consists of prominent air carriers operating with big fleets. We performed this monitoring procedure a month before the departure date i.e. well in advance of the departure date.  This route is a business route in most cases but also has a heavy amount of tourists and journey travel passengers (passengers traveling back home) traveling on it. Read ahead to learn more!

Bangalore to Hyderabad route analysis:

Date of Journey– 29/12/2023

Departure time – 04:10 p.m.

The Bangalore-Hyderabad route is a Business route. The Day of the journey we picked here was a Friday. The departure time considered here is in the evening period.  Due to the Date (29th December) and day (Friday) of the journey, one might conclude that the travelers were exhibiting journey route behavior (i.e. returning home for the holidays).  

Key observations from the above example:

The train availability is pretty high in this situation with 447 seats available still. Our ticket is currently priced highest at ₹5,195. Our competitors have lower prices compared to us at ₹5,193 and ₹4,547 respectively.

Additionally, the recent change in competition price hasn’t been too drastic yet worth noting nonetheless as they have reduced by 7.5% and 10.4% respectively. This change is driven by the fact that flights are facing both multi-modal (from railways) and intra-modal (from other air carriers) competition on this route.

Now consider yourself as a passenger on this route. Would you still opt for highly-priced airlines even though train seat availability is plenty? 

The Bangalore to Hyderabad journey is a short one. Hence people will have no issues in considering other modes of travel. Since the train availability is so high and other competitors have priced their tickets way lower than us we are at a risk of losing significant revenue and occupancy to them. We might end up underselling due to being overpriced and that could lead to underpriced tickets as the date of the journey approaches and we race time to fill occupancy.

Hyderabad to Bangalore route analysis:

Date of journey- 01/01/2024 

Departure time– 06:50 a.m. 

The Hyderabad-Bangalore route is a Business route. The Day of the journey we picked here was a Monday. The departure time considered here is in the early morning period. Travelers on this route are generally traveling due to work commitments around this time. This point is also reinforced by the fact that it’s the new year and the holidays have ended.

Key observations from the above example:

The train availability in the following situation is almost non-existent with only waiting list tickets available. Our ticket is currently priced lowest at ₹5,510. Our competitors have higher prices compared to us at ₹6,181 and ₹9,815 respectively.  

Additionally, we can notice how the recent change in competition prices is quite drastic as they have increased by 78.1% and 21.8% respectively. This change could be a consequence of the fact that airlines are the only mode of transport available to passengers due to train unavailability. 

Picture yourself as a business traveler who has to travel to Bangalore for work commitments. Would you wait for train availability on a different date of journey?

Additionally, our price point is not making the most of the market’s opportunity. 

  • We are aware that train availability is negligible and passengers are left with very few options. Generally, passengers would have the option to select railways. But in the current scenario they have no other choice but to opt for any one of the air carriers available on the route. Hence leaving the pricing power in the hands of airlines entirely. 

  • In addition, one can observe that our competition has increased their price drastically, which should have been accounted for immediately during our market analysis.

Conclusion

Situations like the ones mentioned above demand that your organization has real-time competition data to analyze and take action on. This data must be multi-modal.  In the above cases,  AirViaje.ai will immediately know that there’s been a competitive price change and that train availability is much less so we are underpriced. If we let the current cases continue the same, we might enter an underpriced and overselling vicious loop if customers start grabbing our cheap tickets quickly. 

Additionally, we are going to face neck-to-neck competition to fill occupancy while also doing so at the right prices. This situation requires quick actions and continued multi-modal and intra-modal competition monitoring. An AirViaje user can see the entire market picture in front of their eyes where the data is live and comprehensive. This data availability is then complimented with modules that provide actionable insights.

AirViaje.ai: The future of airline pricing intelligence

The cases mentioned above are just two of the key pricing decisions your organization should make daily. And for that, AirViaje has got you covered. Our competition price tracking module in our comprehensive Insights dashboard is the only solution to keep yourself on top of your competition.

The competition price tracking module can:

    1. Track prices of Competitions on different OTAs in real-time without unnecessary delays.

    2. Configure your flights’ strategic positioning amongst your competition flights. Set up relevant parameter checks to compare your flight’s data to the competition. These parameters could be close departure times, no. of stops, price, etc.

    3. Account for Multimodal factors that have considerable sway on the Indian populace who are extremely price-sensitive hence accounting for not just flights but other modes of transportation like trains and buses.

    AirViaje offers a suite of many other functionalities like: 

    • Listing health

    • Fare class-based price optimization

    • Inventory and revenue optimization

    • User management features for your internal staff 

Stay tuned for our weekly articles and research pieces that are backed by thorough analysis and jaw-dropping data points about pricing in fast-moving industries like Travel (Buses- Intercity coaches revenue optimization; Airlines- Revenue management and optimization); Tourism (Hotel/Property Revenue management); and Retail (Revenue optimization, product visibility and placement in e-commerce domain) to know more.

Book a demo of our automated travel solutions or contact our optimization experts at info@sciative.com.

To see how Viaje.ai can empower your brand, ensuring it not only survives but thrives, visit sciative.com

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