It is quite a gamble these days when as a part of your travel itinerary you have to book the airline tickets. Most people in recent times have given up the traditional travel agents for booking tickets and prefer booking tickets themselves. Booking airline tickets has become a massive decision making activity, where you have to do all your thinking hats, to make an informed decision. Should I buy now, or wait for a better rate, or should I use the price trend forecast to get recommendations on when to book so that huge fluctuations can be avoided.
Post regulation, airline industry, around 1980 - 2001, was a time of price wars, fluctuating fuel prices, and a general increase in the number of passengers opting to fly, along with great technological advances, between the handful of airline providers. Airlines with conservative overheads could offer low airfares as a blanket to all its customers. But in the long run, could not sustain on low margins and had to shut shop. On the other hand, few airlines, used a scientific and analytical approach in offering reduced pricing over a certain sector, during a particular period and maintained regular premium cost airfares for the remaining slots, and with this approach not only did they survive but also accounted profit.
This article will help you understand how could they do that….
The low airfares could be offered by airlines, by following a dynamic pricing mechanism for tickets, based on the demand and supply trend.
Predictive analytics takes stock of what happened in the past, that is historical data, and the forecasts are done by using scientific methods, and statistical models for reliable information, about possible outcomes in the future. Predictive analysis is most accurate because it tries to understand the behavior of a person or a customer, by not only looking at the past information, but is able to predict what they will also do in the future based on the customer, and about that entire population. Thus by grouping people in segments, predictive analysis will be able to give predictions and recommendations on how people will react in the future.
Predictive Analytics has continued to factor essentially into how airfare prices are decided and fluctuate to maintain airline profitability even today. It is mainly because the airline industry is getting very competitive and is a low margin industry. The ability to forecast travel demand is crucial to gain market share. Predictive analysis tools are no longer the luxury of airlines selling tickets, travel booking sites offering Price Predictors Features, can now be used by consumers to see and make decisions for their own projection. Price predicting feature will help them decide whether the price of a particular route is likely to fluctuate, higher or lower, in the coming weeks.
Keeping in line with the trend Indian government is contemplating on introducing an analytical tool which will present the travelers with future ticket price trends, similar to the travel booking sites which offer price predicting features.
This is a positive step towards addressing the travelers concerns of facing steep fluctuation in airfares. Of course, this proposal is subject to sanction from the civil aviation industry. Since air ticket prices are dependent on supply and demand metrics, this step from the aviation industry will get some amount of transparency in the entire process.
This endeavor is crucial and a part of the digitization wave, under the ‘Digiyatra’ Initiative. Since India’s Domestic aviation market is projected to be the world’s 3rd largest by 2022, it is only fair that the industry uses analytical tools to provide a digitally unified flying experience to its travellers.
Using ‘Historical Data Analysis’ along with ‘Price Curves with Predictive Data Analytics’ will help travelers better project and plan their vacations, so as to gain maximum advantage over airfares.
In conclusion, it could be said that predictive analysis is touching our lives positively, in ways that we might not be aware, and the penetration is only going to increase with time.
To learn more about Analytics watch this space until next week for the big news!