Correspondence: Ben Vinod, 3150 Sabre Drive, Southlake, Texas 76092, USA

¹serves as Chief Scientist and Senior Vice President at Sabre Holdings. Prior to rejoining Sabre, he served (2000–2003) as Vice President of CRM and Revenue & Price Optimization business units at i2 Technologies. At Sabre (1985–1999), Dr Vinod was Vice President of Airline Solutions, responsible for pricing and yield management. He earned a PhD in Industrial Engineering from Purdue University with a concentration in Operations Research.

Received 8 September 2008; Revised 8 September 2008; Published online 31 July 2009.

Abstract

Fare management is the first step in the revenue planning process. The success of an airline's revenue management programme makes a fundamental assumption that the customer segmentation and associated price points accurately reflect current market conditions. The ramifications of an ineffective fare management process have a detrimental impact on revenue management and can result in less than optimal inventory controls leading to both revenue dilution and potential loss of market share. This paper examines the airline fare management process based on proactive, reactive and demand management tactics, its complexities and challenges and provides recommendations on how to improve an airline's fare management process to generate incremental revenues.