Tips & Challenges of Change Management in the Airline Pricing Industry

The airline industry has always had a progressive approach towards pricing. In fact, it was the first industry to conceptualize a pragmatic, dynamic pricing strategy and put it into effect. But over a period of years, dynamic pricing in airlines has started to stagnate. Companies have failed to upgrade their pricing intelligence methods and tools and have continued to follow the age-old method of static pricing with minimal usage of dynamic pricing in airlines.

During the pandemic, the airline industry incurred great losses due to ‘ghost flights’ or empty flights. And to recover from these revenue dips, companies need to adopt AI-powered pricing solutions.

Today, artificial intelligence and machine learning enable companies to perform smart repricing, execute revenue management and get access to demand prediction in real-time. But only a handful of airline companies are taking advantage of it.

In this blog, we will discuss how dynamic pricing has revolutionized the airline industry, the adoption of AI-powered pricing solutions, and the best ways to create agile airline pricing strategies.

Dynamic Pricing in the Airline Industry 

Anyone who has booked a flight has witnessed the flexibility of dynamic pricing. During high-demand seasons like the holidays or long weekends, the price of the tickets is higher, while on normal days, they are much lower. This pricing method is used by every airline company and has continued to deliver major profits.

Although dynamic pricing was done manually by airlines, it has now been taken over by artificial intelligence and machine learning. By introducing intelligent tools that automatically reprice airline fares, tech companies are empowering the airline industry. Since businesses no longer have to focus on manually pricing their fares, they can divert their resources towards scaling their business. They can simply rely on bots to give them 99% accurate price optimization.

Challenges in the Adoption of AI-Powered Pricing Technologies  

According to data, airlines are losing close to $1 billion in revenue due to incorrect pricing. In order to plug this massive revenue leak, companies must adopt AI-powered pricing tools that automate pricing and rejuvenate dynamic pricing in airlines. Let’s look at some of the challenges the airline industry faces while trying to adopt these technologies.

  • Slow Change Management Process

A few airline companies have quickly adopted AI-powered pricing technologies. But surprisingly, not all of them have the appetite to integrate the technology into their pricing systems. Due to a slow-paced change management process, airline companies are unable to comprehend the complexities of technology required for price optimization. Thus, losing out massive amounts of revenue.

  • Big Data Management 

The price optimization engine for changing the pricing method at the granular level requires highly intelligent and sustainable IT systems. The companies must also possess the capability of processing vast amounts of data. In order to optimize the prices of tickets, companies need to manage different types of data that include information about airline fleets, customer cancellation, ancillary services, competition data and so on. This data is refreshed every few hours, for which airline companies must possess a robust technological infrastructure. Traditional companies are unable to cope with the current technological advancements. And due to their lack of knowledge on managing big data, airline companies cannot plug revenue leaks.

  • Dealing with Multi-Modal Competition

Airlines companies don’t just compete with each other when it comes to pricing. They also face multi-modal competition. Other modes of transport like railways, buses, and cars have become easy substitutes for airlines. This means the analysis of data for price optimization will have to come from every mode of transport. Dynamic pricing in airlines is not as efficient as it is in other transport industries.

Now that we have cognized the challenges of AI-powered technology in airline companies, let’s understand how they can integrate intelligent pricing tools and systems in their companies.

Integration of Airline Pricing Intelligence Tools and Systems 


# 1 Get the Right Infrastructure 

When it comes to price optimization and revenue management, airline companies need to invest in highly advanced infrastructure. These intelligent systems must be able to process, analyze and predict prices, and future demands, understand customer sentiments and so on. Conventional software cannot absorb the speed and scale of artificial intelligence and machine learning. That is why they need a massive shift in their technology and infrastructure.

# 2 The AI-Powered One-Stop-Shop

Airlines use a series of different tools for revenue management, dynamic pricing, fare filings, online bookings and so on. By integrating intelligent technology, they can perform all their functions under one roof. Companies no longer need to spread out their data in different systems and lose time and revenue when it comes to operations and pricing. 

# 3 Training & Onboarding the Team  

An intelligent system requires a highly skilled team. That is why it is vital to train the team when it comes to change management. These are trained professionals who need to efficiently manage data and run the systems at their optimal level. By blending technology with highly trained team members, airline companies can automate all their processes, be it revenue management, pricing, managing ancillary services and so on. Dynamic pricing in airlines is the need of the hour and a strong team with the right infrastructure will help them implement it with ease.

# 4 Test Out the Systems 

Once the technology is integrated, it has to be tested out in the market. Ideally, companies must test out how the system is working and what are the challenges faced by the company. After testing is done, they keep adding to it and eventually leave everything to the bots. By doing so, they can automate the systems and focus on scaling their business.

# 5 Automate the Process for Revenue Maximization

By switching from traditional pricing to AI-powered pricing methods, airline companies can plug massive leaks in revenue. They can automate their pricing process and leave revenue management to the bots. These pricing solutions reduce human error and perform accurate pricing predictions with a click of a button.


With the evolution and artificial intelligence and machine learning, highly advanced tools are being innovated by the minute. This means traditional airline companies must swiftly move on to integrating AI into their systems. Since it will help them plug revenue leaks, improve accuracy, and take advantage of speed and scientific rigor for revenue maximization.

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