SITA’S GROUNDBREAKING PRICING MANAGEMENT TOOL

CUSTOMER STORY

FINNAIR CHOOSES AIRFARE INSIGHT

A VENERABLE AIRLINE – CONTEMPORARY AND POISED FOR GROWTHOne of the oldest operating airlines in the world, Finnair was established in 1923 and today carries about 10 million passengers annually to and from 17 destinations in Asia and more than 70 in Europe. With one of the most punctual and reliable airline operations, Finnair’s aim is to offer the smoothest, fastest connections possible in the northern hemisphere via Helsinki and the best network to the world from its home markets. With many of the fastest routes between Europe, Asia and North America and connection reliability close to 99%, Finnair’s Helsinki hub provides a natural competitive advantage. Known for quality, Finnair has a 4-Star Skytrax rating and has won the World Airline Award’s “Best Airline in Northern Europe” four years in a row. With one of the youngest fleets, orders for 19 additional aircraft and plans for a complete refresh of both cabin design and services, Finnair is well-positioned for what is forecast to be both medium- and long-term Asian passenger growth. However, to effectively leverage this opportunity, Finnair knew that getting the best pricing strategies and tools available was critical to stack up against increased competition for the Asia-Europe space.

AIRFARE INSIGHTS SOARS ABOVE THE COMPETITIONViewing, managing, analyzing and monitoring an airline’s own fares against competitors’ fares manually is a lengthy process that often relies on email, phone calls and spreadsheets. Such a process poses the risks associated with e-mails getting deleted, lost or archived. This sort of manual system was no longer feasible for Finnair.

Instead, based on an assessment of vendors in relation to their needs, overall attractiveness and workflow quality, the airline chose SITA’s fares analysis technology to manage the setting of fares in both its domestic and international markets.

• When compared with other systems, SITA Airfare Insight received the highest average score in seven out of eight aspects, and of particular note was the way all-inclusive fares were displayed.

• Overall attractiveness, distinctive user friendliness and vendor knowledge on pricing functions made Airfare Insight stand out, and it was also rated best able to meet Finnair expectations in general.

• For general workflow quality, Airfare Insight was graded the best option to provide enough data in the right format and on the spot for efficient pricing decisions and to improve the communication across all commercial functions.

The project began by defining the initial data set-up for Finnair. SITA’s commitment to its new customer enabled the process start even before the contract was signed – meaning Finnair was able to hit the ground running with no delays. As a result, the implementation process was completed one month ahead of schedule and was noted as one the most successful project implementations at Finnair in 2015.

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“ SETTING THE RIGHT FARES IS ESSENTIAL FOR THE SUCCESS OF ANY AIRLINE. EVEN A RELATIVELY MINOR PRICE DIFFERENCE CAN RESULT IN A MAJOR LOSS OF MARKET SHARE. AIRFARE INSIGHT PROVIDES AIRLINES WITH THE BUSINESS INTELLIGENCE TO MAINTAIN THEIR COMPETITIVE EDGE AND MAKE SURE EVERY AIRFARE IS CORRECTLY PRICED AND ACCURATELY REFLECTS THE CHANGES IN MARKET CONDITIONS.”

DAVE BAKKER PRESIDENT, EUROPE, SITA

INNOVATIVE FARE MANAGEMENTThe combination of public, private, corporate and category 25-derived fares makes pricing very challenging for airlines. Filing fares at the right price and time can have a marked impact on airline profit margins. Industry studies indicate that correct pricing can contribute an extra 3-10% to an airline’s overall revenues. SITA’s Airfare Insight allows airlines to make rapid adjustments to fares in response to market conditions to stay ahead of the competition. Finnair uses Airfare Insight to support its commercial pricing and distribution strategy. This innovative fares management solution provides competitive market intelligence and uses sophisticated algorithms to help Finnair analyze fares and make recommendations, improving speed to market times and accuracy. This means the right fares are distributed at the right time and to the right customer. Other benefits of Airfare Insight include:

• New ‘all in fare’ option processes all taxes, fees and surcharges automatically so the airline can see and compare the actual price paid by the customer inclusive of taxes, fees and surcharges.

• Technology to analyze many options simultaneously, allowing the airline to refine and improve the pricing delivery process.

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“ TODAY THE MARKET FOR AIRFARES IS EXTREMELY COMPETITIVE AND CAN CHANGE RAPIDLY. SITA’S AIRFARE INSIGHT GIVES US AN IMMEDIATE AND CLEAR VIEW OF WHAT IS HAPPENING IN THE MARKET, ALLOWING US TO MAKE INFORMED AND TIMELY CHANGES TO OUR PRICING, PROVIDING OUR PASSENGERS WITH THE MOST COMPETITIVE AIRFARES AVAILABLE.”

TOMI HÄNNINEN VICE PRESIDENT, REVENUE MANAGEMENT & PRICING, FINNAIR

• Built in partnership with the world’s leading airlines, Airfare Insight optimizes the entire workflow between sales, pricing, revenue management and distribution and ensures fares are distributed to the right customers and can be analyzed and managed across multiple locations and time zones.

• Monitors and analyzes hundreds of millions of fares, allowing analysts to exploit the most competitive price position via fast and seamless distribution.

• Workflow tools with structured data entry and validation ensure the right fares and rules are being offered to the correct customers.

• Automates and coordinates the creation and approval of private and negotiated fares.

• Centralized, standard source of current and historical data.

SITA AT A GLANCE

SITA is the world’s leading specialist in air transport communications and IT solutions.

Owned by the industry, SITA delivers solutions to airlines, airports, GDSs and governments over the world’s most extensive communications network.

© SITA 17-END-095-1 All trademarks acknowledged. Specifications subject to change without prior notice. This literature provides outline information only and (unless specifically agreed to the contrary by SITA in writing) is not part of any order or contract.

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SITA SOLUTIONAirfare Insight is a component of Horizon®, SITA’s next generation Passenger Services System (PSS). SITA’s investment in the Horizon portfolio is providing the tools that enable airlines to respond quickly to evolving market conditions. Airfare Insight allows airlines to manage fares distribution for both direct and indirect sales channels by monitoring the vast network of fare changes and automatically identifying the relevant changes in the marketplace. It immediately ensures appropriate prices are in place to support revenue management and sales strategy. Airfare Insight enables full control over the approval and audit of pricing activities, including management oversight and analysis before and after fares change.

RESULTSIt’s still early days in terms of evaluating concrete business results, but Finnair’s speed to market has certainly improved – for example, in terms of reactive tactical pricing and the ability to populate their PROS origin and destination revenue management system with up-to-date fares and rules data. This was previously supported by another provider, but was extremely costly to maintain and didn’t support as many important data fields as SITA.

More agile and market-oriented pricing is leading to increased pricing competitiveness. User feedback has also generally been positive. This is particularly encouraging as one of the targets for implementing a new pricing tool was to establish a more efficient workflow for the pricing team.

IT is playing a major transformational role at Finnair. Digitalization is one of the company-wide must-win battle focus areas and will continue to be used to enhance customer experience in the years to come. In addition, the airline’s upgraded systems in pricing and revenue management as a result of SITA’s Airfare Insight provide people with much better tools to actually contribute to their maximum potential.

For further information, please contact us at www.sita.aero/solutions-and-services/request-information or visit www.sita.aero/solutions-and-services/solutions/horizon-fares-management