The airline was experiencing a profit loss as a result of low load factor (LF) in its cargo business. FreightRM analyzed the data, and found the following causes for operational and revenue mismatch:

• hideFIFO based operation, with no revenue management methodology
• hideUnknown capacity demand lead to low LF
• hideAn ambiguous pricing policy created customer confusion that lead to profit loss
• hideUnmanaged allotted capacity and disorganized sales processes resulted in capacity and revenue loses
• hideIncomplete price calculations left out operational factors
• hideThe lack of real-time flight development monitoring and cargo management tools were one of the key success factors missing to optimize flight revenues

FreightRM’s team studied the companies operation closely, and adapted our system to deliver optimum performance for the airline’s cargo operation.
The system enabled the airline to:

• hideDivide flight capacity into fare classes and associate shipments with relevant classes
• hideUpdate fare classes in real-time, based on demands and cancellation dynamics
• hideForecast capacity demand and pricing based on ongoing analysis, history data, customer behavior and publicly available data
• hideManage allotment
• hideCarry out ongoing forecasting and recommendations based on all operational factors delivered through the system’s interactive dashboard

Once the project was approved, implementation was completed within a year. The main implementation phases of the FreightRM system were:

• hideIntegration with the cargo operational system, including data collection interfaces
• hideA 3-month pilot of 2 flights from a home station
• hideA soft launch of improved flight revenue and load factoring for chosen flights
• hideA systematic yet gradual addition of flights, in parallel with functionality expansion
• hideIntegration of transit shipments into RM processes and optimizing revenue management by integrating calculated marginal costs into contribution to flight income, relative to direct cargo

Implementation of FreightRM led to significant benefits:

• hideImproved flight revenue
• hideImproved LF due to better capacity management
• hideImproved operation due to interactive and efficient flights management
• hideProactive flight management using alerts, notifications and recommended actions to improve flight revenue and LF when certain conditions occur or revenue opportunities are identified
• hideOptimization processes based on data and management reports on service failures, load factors, revenues and customer behavior
• hideImproved customer service thanks to a clear pricing approach
• hideHigher preferred customer satisfaction, thanks to prioritization features
• hideThe company connected to e-booking sites, and enabled customers to receive a price quote, alternative routes and to book their chosen flight