Welcome RTS Newsletter

Summer 2015
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Pradeep Bandla
Vice President at RTS

Dear Readers,
Hope the second part of the first half of 2015 is turning out to be as or better than expected.

The most recently concluded quarter at RTS has been quite busy - thanks to numerous on-going projects and a travel schedule that has been quite active given our participation in industry conferences. Read more about the conferences we've attended this quarter in the Scoop section. That section also includes information that continues to get crystallized as we move closer to the signature event of our annual calendar - the 2015 RTS Summit. We have been quite active on a diverse number of customer implementations including cargo revenue management and passenger scheduling. Learn more about these exciting projects in the Customer Chronicles section.

Our product management activities continue to move along at full throttle and you can glean some insight on some of key features we are working on in CargoPriceOpt as well as SchedOpt in the Product Happenings section.

Finally, in the Guest Oracle section, we have a blog contribution from yours truly that attempts to shed some light on some of the more nuanced meanings of the phase 'customer satisfaction'.

With that, I will end this note hoping that you have managed to stay cool this summer (and warm in the Australian winter) while projects continue to heat up in the second half of 2015.

Pradeep Bandla

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Passenger & Cargo Pricing: Revenue Management

Cruise Ferry

Highly accurate demand forecasts coupled with capabilities


RTS is a pioneer in hospitality revenue management


Cutting costs & increasing efficiencies are not enough


Price sensitive revenue management Competitive insight

The Scoop

Low Cost Americas Conference in Miami
RTS makes attending industry conferences a top priority as these gatherings give us valuable insight into the latest happenings in the domain, challenges faced by transportation companies and potential solutions to address those and ability to meet and contribute to thought leadership. In that spirit, Pradeep Bandla, VP of Passenger Solutions attended the Low Cost Americas Aviation Conference held in sunny Miami, USA on June 3rd and 4th. The conference included interesting presentations and thought provoking panel discussions on a variety of topics in the airline industry. Pradeep participated in a panel discussion titled 'How airline IT can help enhance the customer experience'.

Below are some pictures of the conference:

Raja Kasilingam was invited to speak at the China Airline Revenue and Pricing Management Conference
Raja Kasilingam, President of RTS, was one of the invited speakers at the 2nd China Airline Revenue and Pricing Management Conference held in Shanghai, China on May 13-15, 2015. It was jointly held with 2015 AGIFORS (Airline Group of the International Federation of Operational Research Societies)Revenue Management Study Group. This conference was a forum for airline executives, vendors, consultants, and members of academia to review the most pressing issues facing airline revenue management today, to offer potential solutions, and to provide an opportunity for high-level networking. Several international airlines from all over the world as well solution providers in the reservations, revenue management, and pricing areas attended the conference. Specifically, there were over 10 carriers from China at the conference.
Raja presented the thought leadership of RTS in revenue management and related areas. His speech specifically focused on analytical approaches to better leverage competitive industry data along with an airline’s own data. He emphasized the need for a methodology to ensure repeatability, consistency, speed, and effectiveness in negotiating contracts with customers with an ultimate objective to increase revenue and margin. He also shared his experiences in working with leading airlines in adopting and implementing solutions that encompass this methodology. Raja’s speech generated significant amount of interest among the attending airlines as well as other solution providers. Based on his presentation, Raja has been invited to submit a manuscript for possible publication in a special issue of the Journal of Revenue and Pricing Management.
2015 RTS Summit
We are getting closer to the RTS signature event of the year - the annual Summit. As mentioned in the last newsletter, the 2015 annual RTS Summit will be held from the 22nd-24th September at the city that hosts RTS Headquarters - Dallas, Texas, USA. Our marketing team has been working diligently to organize the logistics and we are pleased to announce that the venue for the Summit will be the magnificent Gaylord Texan Resort and Convention Center. We are in the process of negotiating a special room rate for attendees and will be setting up a portal with conference details including registration, booking accommodation, agenda, etc.
Remember, this is a great opportunity to learn more about RTS, it's people and solutions, network with peers and gain insight into how clients use our products to address their challenges and listen to industry thought leaders providing insight into the world of marketing and planning solutions in both the passenger and cargo domains and we strongly encourage you to take care of this opportunity and look forward to welcoming you then.

Customer Chronicles

Brittany Ferries Freight RM implementation closer to the finish line
Brittany Ferries Freight and RTS are fast approaching the end of the final phase of the project to implement our Freight Revenue Management system CargoProfitOpt.
The education sessions for Demand Forecasting, Customer Value, Bid Price and the Booking Evaluation process were recently held in Poole, and currently user acceptance testing is under way and nearing completion. Rollout into production is planned throughout August 2015.
Brittany Ferries has been an RTS customer since 1997 Further information can be found at www.brittany-ferries.co.uk
SchedOpt project update for Marine Atlantic
Work on the Capacity Planning and Scheduling Tool (RTS SchedOpt) for Marine Atlantic is in full swing with the delivery team continually engaging the client and getting valuable feedback on the product during demos. The demand forecasting and schedule optimization modules have been completed and remaining functionality development is being finalized. More details on these modules can be found in the Product Happenings section of this newsletter. The tool is scheduled to go live in August 2015.

Product Happenings

Moving towards to become ‘Spot’ on in cargo pricing
Spot Pricing is a major issue and challenge for air cargo carriers. The process of forwarders asking for discounts on negotiated contract rates on specific shipments is considered as spot rates or ad hoc rates. In certain cases, upto 50% of the business can be related to ad hoc or spot price requests. Most airlines manually respond to these requests equipped with minimal information or little science behind the process. This can also consume a lot of resources and time for the pricing department. At RTS, we have come with a solution to effectively automate this process with algorithms behind the automation as part of the RTS CargoPriceOpt solution.
CargoPriceOpt, is a comprehensive cargo pricing decision support system that considers competition, customer value, price elasticity, and costs to recommend general tariff, contract and spot prices for all markets as well as has the capability to update them as needed. The solution primarily enables airlines understand the challenges in understanding the competition, customer, and product by providing customer values that helps in determining prices for various markets.
The RTS Cargo team is putting together the final touches to optimally generate spot prices as well as evaluate spot price requests in real time for air cargo carriers. The spot price automation will give airlines information to accept or reject spot price requests as well as negotiate spot prices. The solution considers customer value as well as shipment value along with price elasticity algorithms to generate an optimal spot price.
This solution will be implemented at a large European carrier by the beginning of fourth quarter and eventually rolled out to rest of the customer community.
Managing Allotments
Managing allotments is very unique to the air cargo industry as well can be extremely complicated. Apart from balancing free sale and allotment requests, revenue management departments also have to delicately balance between station, customer and product allotments. Added to this misery, schedule changes can wreak havoc on these allotments. Sales managers and revenue management analysts go through this cumbersome process every quarter or in certain cases every week to execute these recommendations as well manually move these allotments when schedule changes occur.
RTS’ newly minted allotment management module, which is a part of RTS CargoProfitOpt, handles this with aplomb. Following is an overview of the features of the allotment management module:
  • User defined allotment periods
  • Automatic processing of schedules for those periods
  • Long term forecast of capacity and demand
  • Web based collection of allotment request
  • Display routes with highlighted missing frequencies and inconsistent gauge changes
  • Allocate space to allotments based on the forecasted capacities, the requests for space from various shippers and stations, and profitability of requests.
  • Re-accommodation of allotments when flight number or time changes
  • Proactive alerts to stakeholders when gauge changes prompting users to take corrective action
This new module is scheduled to be rolled out in the 3rd quarter of 2015 to a large North American carrier and is expected to be made available to rest of the customer community from thereon.
SchedOpt Development
We are pleased to announce that the development of the newest solution in the RTS Portfolio - SchedOpt is progressing at a very rapid pace. Some of the key components of this solution include:
Demand Forecasting (Capacity Planning): Some of the key features of this module include:
  • Sophisticated exponential smoothing techniques using day of week and month of year seasonality coefficients to generate forecast for future departures in the schedule planning horizon.
  • Ability for users to view and edit historical bookings data and use the adjusted data to recalibrate demand forecasts.
  • Ability for users to set up default values that can enable the system to generate forecasts for new markets, departure times which do not have corresponding historical information.
  • Ability for users to influence model recommended forecasts through user input.
Development of this module including testing is now complete.
Schedule Optimization: Some of the key features of this module include:
  • Ability to consume the demand forecasts generated in the capacity planning stage.
  • Utilization of a range of operational scheduling parameters including crossing times, minimum ground time, preferred departure times, equipment range, etc.
  • Rules based engine that allows the above parameters to be input into the system so as to facilitate application of different values of same parameters based on different conditional criteria.
  • Sophisticated optimization logic that assigns equipment to routes in the most efficient manner to create an optimal schedule.
Development of this module is complete and testing is now on-going.
On the cruise ferry front, Marine Atlantic will be the launch customer for RTS SchedOpt.
On the airline side, demos were provided to both Winair and Cayman Airways and we are thankful for valuable feedback received from them.

Guest Oracle

What does client satisfaction actually mean
Every company uses the catch phrase ‘Customer Satisfaction’. After all, which company can hope to market their solution and get any traction in the marketplace without adhering to this buzz word as one of the core tenets of their offering. Though companies mean well and most of them actually strive to have client satisfaction as a goal, it is debatable as to how highly on their list they are willing to place this particular aspect of their service. Unless you live on Planet Utopia, the possibility of getting a bug free and totally business compliant solution is only a pipe dream. Having said that, that certainly is what most vendors and clients hope will be a reality. However in the real world, Mr. Murphy does tend to be hyper- active when and where you least expect him to and how the vendor responds to these unexpected and often unpleasant circumstances is what ultimately determines the failure or success of a project. As the saying goes, life is not about the challenges that you face but about how you face up to those challenges. Client satisfaction taken in the literal robotic sense devoid of any intangible human sentiment can be measured in hard cold statistics that provide a seemingly irrefutable scorecard on the number of issues that have failed or not working as they were supposed to. However a mere scorecard cannot really capture the intangibles, as it does not reflect deadlines missed due to inaccurate or incomplete requirements, mission creep and other delays caused by acts of God.
Though customers obviously expect on-time and under budget deliverables, in the unfortunate instances when this is not possible, it is the attitude and approach of the vendor in dealing with these challenges that often times mould the reaction of the client. In the spirit of transparency, if the vendor discloses the challenges and outlines the potential pitfalls as the project progresses, that ensures that the client gains a valuable appreciation of the nuances of the project and at the same time helps calibrate their expectations. This is a much more preferred approach than working in a vacuum with minimal periodic or insightful updates creating a false feeling of comfort on the client’s side which gets disturbed rudely when details of an unexpected unsatisfactory outcome are disclosed at the last minute. Those kind of approaches will understandably result in strong backlash and is at the core of customer dissatisfaction. Honest communication lines need to be open between the vendor and the client in order to achieve any semblance of customer satisfaction.
Trust is an incredibly core tenet of the client vendor relationship and that is something that has to be earned from day 1 and is not an attribute that can be taken for granted at the outset of any client vendor engagement. I have personally seen cases where a relatively major adverse impact on a project was met with a reasonable response from the client as they realized that the outcome was in spite of the vendor putting in their best efforts due to a rapport between the project resources concerned. Conversely I have seen other cases where relatively minor issues have been blown out of proportion by clients owing to a toxic client vendor relationship.
The ultimate measure of customer satisfaction is typically gauged by how likely the vendor is willing to put his or her reputation on the line and recommend the solution to his or her peers. That perception on the client side is made up of obviously the merits of a solution and it’s execution but what a lot of vendors fail to realize is equally important is that the kind of trust and rapport that exists between the vendor and client resources that are engaged on the project. Ultimately a great solution is not just one that has the most bells and whistles but also that which places a lot of importance on the intangibles involving inter-personal relationships.
We at RTS are proud to proclaim that our customer service personnel have won multiple acclaims around the globe not just in terms of being subject matter experts in the revenue management domain but constantly going above and beyond the call of duty to ensure that our solutions are deployed in a smooth manner. In the event that there are disruptions to operations owing to solution deficiencies, they have worked incessantly with the right attitude with clients to ensure that the disruptions are kept to a minimum.
Please let us know what factors influence the satisfaction levels that you feel with your products. If you are thinking about a revenue management, pricing or scheduling solution, we invite you to consider us and experience the award winning RTS customer service that a number of our existing clients can attest to.
Pradeep Bandla
VP - Passenger Solutions

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