JDA Software’s Cargo User Conference covers new approaches to optimize revenue.

With airlines under increasing pressure to boost revenue in all business sectors, revenue management in the air cargo industry is gaining ground as a best practice applied by Delta, Continental Airlines and other leading air carriers. Recently, representatives of these and other companies attended the Cargo User Conference hosted by JDA’ Software Group, Inc. in Atlanta, Georgia. During the conference, attendees discussed the importance of business process analysis and learned how JDA’s next-generation price optimization technology can help drive profits in times of excess capacity, as well as assessed the impact from toughening regulatory requirements.

A major air cargo provider presented an overview of its recent revenue management project implementation that emphasized the importance of balancing the synergies of people, processes and technology with a company’s overall IT strategy and revenue management goals. Conference attendees benefited from an in-depth discussion of how to use business process modeling that encompasses revenue management and its impact on sales, accounting, operational policies and client dynamics.

‘The record attendance at our conference and the lineup of industry leaders who spoke about the issues illustrates the growing focus on revenue management strategies,’ said Andy Archer, group vice president, service industries, JDA Software. ‘Even with reduced demand and capacity, air cargo companies are focused on pricing and revenue management solutions and are working with JDA to continue improvement in this critical area. The conference gave us an opportunity to offer our vision for future product development and to gather ideas for ongoing improvement.’

Speakers at the Cargo User Conference consisted of noted authorities who have pioneered pricing and revenue management approaches for air cargo, including the following:

  • Raja Kasilingam, chief executive officer of CargoINTEL, discussed the impact of tighter US Department of Homeland Security regulations on cargo security inspection mandates and the added costs those regulations will bring. He also acknowledged that many companies are looking at pricing and revenue management technology to uncover opportunities to increase revenues during the economic downturn, and that JDA is in a key position to address the emerging realities facing the air cargo industry.
  • Dr. Pelin Pekgun-Cakmak, a noted researcher and architect of pricing solutions across multiple industries in collaboration with JDA, presented the results of her research on innovative methods to determine price elasticity in travel-related industries. She remarked that due to unique characteristics present within the travel industry, standard pricing theories and practices would lead to incorrect assumptions concerning consumer behavior and the impact of price changes on demand.
  • Jason Cameron, general manager of business planning and analysis, Delta Air Cargo, led a session on key performance indicators and ideal reporting strategies for the air cargo sector. Cameron discussed the challenges of accurate and insightful reporting, and emphasized that each analysis must be tailored to individual consumers’ needs ’ whether they are in operations or corporate strategy positions.
  • JDA’s Suresh Acharya, vice president, analytical services, and Fion Choi, operations research consultant, highlighted that while revenue management techniques work well when carriers are capacity constrained, there are additional revenue opportunities available when excess capacity exists by applying price optimization techniques. Results from a working prototype of JDA’s Travel Price Optimizer’ were then presented to session attendees. The exercise illustrated a 3 percent revenue improvement during challenging economic times when demand is less than the available capacity.