Quick Facts
- Type
- Airline Strategy
- Definition
- The practice of dynamically adjusting fares and inventory to maximize total r...
- Used By
- Airlines
Definition#
Revenue management (also called yield management) is the strategic control of inventory and pricing to sell the right seat to the right passenger at the right price. It uses demand forecasting, fare class controls, and overbooking models.
Why It Matters Operationally#
Revenue management can increase airline revenue by 5–15% without adding capacity. It optimizes the trade-off between filling seats (load factor) and fare levels (yield).