1. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden New Generation Inventory Jean-Michel Sauvage Software Development Unit Manager AGIFORS Conference, Berlin 17 April 2002

2. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Outlines l Overview w System w Feeds l Revenue management features w Class control w Revenue buckets control w O-D control w Cross-cabin control w Cross-flight control

3. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Overview NGI l Benefits from a community system l Implements private availability calculation algorithms l Leaves airlines responsible for optimization l Provides generic interface for use with different optimizing systems l Is independent from PNRs

4. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Overview: System Overview Amadeus SystemAirline System N/AVS Flight Schedules PNRs Other Airline GDS E-Commerce ATO / CTO Travel Agent Schedule Planning Optimizing System Operations Schedule Inventory Seat NGIReservation system Yield Seat Map Request Seat Reservation Dynamic Availability Interactive sell SSIM N/AVS NGD

5. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Overview: System Feeds l From airline to inventory w Inventory controls (booking limits, nesting) w Inventory classes subdivision (POS, code-share) w Overbooking controls w Yields w Bid-prices w Revenue buckets (discrete EMSR curve) l From inventory to airline w Scheduled full and partial inventory dumps w On request ad-hoc flight inventory

6. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Booking Class Control l various criteria divide inventory’s booking classes Example: YY9762 class B divided in: B1= (class B sold in US or in PAR) or (B sold in SIN and under flight# XX25) B2= all other B class bookings l Classes and subclasses can be nested l Standard min/max/booking limits inventory controls

7. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Revenue Buckets Control l No fix relationship between fare class and revenue l Set of “revenue buckets” {B i } assigned on leg/cabins l {B i } represent discrete approximation of EMSR curve Yield Seats AV0 4 Cabin Capacity AV0 3 AV0 2 AV0 1 Y1Y1 Y2Y2 Y3Y3 Y4Y4 Y0Y0 At t = 0, B i defined by: l Initial availability AV0 i l Yield range Y i-1 Y i

8. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Revenue Buckets Control l Sell activity’s yield estimated and mapped in a bucket l E.g. w n bookings at yield y  bucket B 3, Overbooking is 20% B 3 now defined by: l Initial availability AV0 3 l Yield range Y 2 Y 3 l Current availability AV1 3 Yield Seats AV0 4 AV0 3 AV0 2 AV1 3 AV1 4 AV1 2

9. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Revenue Buckets Control l Compared to standard bid-price inventory control Yield Seats Yield Seats AV0 4 AV0 3 AV0 2 AV1 3 AV1 4 AV1 2 AV’1 2 AV1 4 AV1 3

10. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Revenue Buckets Control l Brings flexibility w Can behave exactly as standard bid-price control w Possible choice to always sell in lowest bucket w Needs less re-optimization than bid-price/gradient inventory control w Flexible algorithms left open to airlines for dynamics: w Where does bucket overflow go w Where does bookings cancel get counted

11. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: O-D Control l O-D sell activity estimated : O-D Yield (Y OD ) l Yield contribution deduced on each leg i : C i (Y OD ) w Without displacement costs: w With displacement costs using leg bid-prices: l Leg contribution mapped on each leg’s revenue buckets to find availability

12. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: O-D Control l O-D control w Is compliant with leg-EMSR optimization model w Is applicable even if parts of O-D have no buckets defined w Uses “real-time” or “static” bid-prices

13. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Cross-cabin Nesting l Automatic access to another cabin’s available space when yields overlap Yield Business Economy Remaining cap. Physical cap. Yield Extra potential space for Economy

14. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Cross-flight Nesting l Cross-flight nesting designed to be used for w “flow-forward” situation e.g. a frequent service on which business passengers booking the late flight and actually flying earlier afternoon flights. w “similar flights” situation Distinct similar services (same time) created to work- around with aircraft capacity restrictions.

15. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: Cross-flight Nesting l Cross-flight nesting w Works by defining a “range” of nested flights w Shares cabin capacities in a similar way to cross- cabin sharing w Can be combined with cross-cabin nesting

16. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden Revenue Management Features: For the future l System infrastructure designed to handle w Piecemeal constructed O-D bookings w Alliance revenue management models w Customer based availability

17. © copyright 2002 - Amadeus GTD S.A. / all rights reserved / unauthorized use and disclosure strictly forbidden New Generation Inventory Jean-Michel Sauvage Software Development Unit Manager AGIFORS Conference, Berlin 17 April 2002