Air Cargo is a USD 60 billion business that transports 35% of the value of goods traded internationally and a critical part of the airline business which, as a whole, is the heart of a value chain that supports 32 million jobs and USD3.5 trillion of economic activity.
It is an important industry that is critical to global business. Air Cargo is increasingly becoming an important source of revenue for airlines across the globe.
On an average, the revenue from cargo is 13% of the total air traffic revenue, and up to 40% for some airlines.
It is becoming increasingly important for airlines to capture as much of a market share as possible and carry the right type of cargo within the constraints of the network in order to increase revenue and maximize profitability.
Recognizing the revenue generating potential of an efficient cargo department, experienced airlines have transformed this sideline operation into a vital component of their business strategy. The success of an air cargo operation can be impacted by a number of factors – better definition of products and pricing, adequate, accurate, and timely data, and better understanding of capacities, demand, and customer behavior. Airlines require automated decision support tools to help manage cargo operations at an optimal level, thereby increasing revenue while maximizing profit and improving customer relationships.
Some of the major challenges facing the air cargo industry today are:
- Understanding the true car capacity as well as capacity for sale considering passenger and cargo customer behavior
- Determining the capacity split between allotments/long-term contracts and freesale
- Determining routes considering connect times, shipment characteristics, embargos, station constraints, etc.
- Dynamically determine hurdle prices considering demand for various types of cargo
- Understanding and defining the value of cargo customers
- Considering price elasticity, customer value, capacity and market share, and costs to set prices/rates
- Maintain and update rates frequently
At RTS, we understand airline cargo operations and the value of best practices and IT decision support systems to improve productivity, service levels and revenue.
With expertise, experience, and knowledge in end to end cargo business processes, we have developed a cargo product portfolio that addresses the specific needs of airlines covering the end to end cargo processes.
RTS solutions cover a wide range of business functions such as :
- capacity planning,
- revenue management,
- management reporting,
- customer value pricing,
- price elasticity analysis, and
- target pricing.
RTS - Cargo solutions and services:
- RTS® CargoProftOpt Revenue management and capacity planning software
- RTS® CargoPriceOpt Pricing analysis and decision support software
- Schedule evaluation tool to analyze the value of a given schedule in terms of overall network revenue/profitability. Considers origin-destination-product demand, routes, costs, and flight schedule to identify bottleneck and underutilized flights. This assists airlines in making decisions such as swapping aircraft, changing frequency, and deciding where to fly
- End to end Cargo consulting services
- Commercial strategy – Products, schedule, revenue management, and pricing
- IT strategy – automation, business intelligence, and migration plan
- Training and education – revenue management, pricing, and marketing
- Business process assessment - ,business process mapping, gap analysis, change management, and best practices
- Operations research - statistical and operations research modeling and support
- IT Services – integration services and customized solution development,