Airline Channel Management

A lot has been written (including in this Blog) on the fragmentation of inventory and the emergence of alternate distribution platforms. One underlying theme that has not been discussed is the need for airlines to execute effective channel management strategies. There are a number of software solutions that allow hotels to manage different buckets of inventory through different channels, why doesn't this apply to airlines? The primary problem lies in the nature of the legacy airline reservation systems (CRS not GDS). It is difficult to deliver unique pricing to a particular channel if the infrastructure platform (e.g. the ability to store unique fares) is not in place. It is my belief that 2006 will see increased efforts by airlines to more effectively execute a multi-faceted channel pricing strategy, primarily designed to drive more business through specific channels. If the airlines can every combine dynamic pricing with customer value, the market will permanently change allowing the best customers to receive preferential pricing. This represents the ultimate in channel and customer relationship marketing.