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OVERBOOKING An essential part of yield management is the overbooking of flights. Airlines overbook in the knowledge that a percentage of passengers and travel agents make reservations that are never used, while others make multiple bookings. This can deny other passengers the opportunity to travel on flights that appear to be fully sold. Overbooking profiles are carefully monitored and managed. For customers, overbooking ensures flights are not closed for bookings well ahead of departure. As a result, fewer seats are wasted and more customers have the opportunity to travel. Without overbooking, airfares would rise to cover the loss of revenue from last minute cancellations and 'no shows'.
PRICING INITIATIVES The philosophy of yield management is to maximise seat sales at the optimal (not necessarily the highest) price, and a range of fares is offered to help meet overall revenue targets. Not everyone is prepared to pay the same price at the same time. Some customers are driven by price and choose to purchase discounted fares, such as sale or promotional airfares, which require them to book early or travel on a particular day or time in order to secure a seat. Customers who are time sensitive or want greater flexibility are often willing to pay a higher price. While flights may vary by time, frequency and number of seats, it is common for the full range of fare types to be available for sale at some time during the booking life-cycle. Yield management aims to provide an optimal return from a network offering designed to suit the needs of a range of customers. In its aim to maximise seat sales, yield management also plays a role in identifying areas of weaker demand and then releasing special fares to stimulate demand.
CAPACITY TO MEET DEMAND Where viable, peak travel periods are matched with additional capacity to meet customer demand. In periods of lower demand a combination of pricing initiatives and/or capacity changes may be applied in order to best match seat demand and supply.
Qantas Airways Limited ABN 16 009 661 901
Further information and media releases can be found at the Qantas website: qantas.com
September 2010
BUSINESS INFORMATION SOLUTIONS
Qantas’ first computers were introduced in 1962. Today, Business Information Solutions (BIS) comprises around 1400 IT specialists from nine organisations who deliver over $100 million in new technology projects per annum, and manage infrastructure in eight data centres and over 350 business systems that are used to run the Qantas business in Australia and overseas.
INFORMATION AND COMMUNICATIONS TECHNOLOGY SERVICES BIS provides a diverse range of managed technology services to Qantas, including:
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end user computing (EUC) and collaboration services that provide the touch points (through desktop, laptop and other mobile devices, peripherals and applications) that enable Qantas users to access the broader Qantas computing environment and information sources
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