Project description
A better way to maximise flight occupancy
Airlines need to fill their planes at 70 % of capacity in order to break even. To ensure efficient use of resources, airlines estimate the future demand for a flight, use it to determine the optimal fares and then publish those fares through the various sales channels. Flight occupancy is monitored closely until the date of departure, and the fares are adjusted as needed. The EU-funded AIRM project will improve this model by introducing a bottom-up channel from travellers to airlines. When an agent knows there is a passenger interested in a flight, they will be able to place a bid on a seat. The airline then may accept the bid and thus immediately increase the occupancy of the flight, without the need for continuous fare readjustments.
Objective
It is of paramount importance for airlines to fill their seats. This leads to a more efficient use of resources, with positive financial, operational and ecological impacts. It is also crucial for an airline’s success: on average, planes need to be filled at 70% of their capacity, just to break even. This is why airlines have spent significant efforts in revenue management, the practice of carefully optimizing the different fares proposed to customers. Nonetheless, the average load factor in the industry still lies below 85%. The current paradigm is top-down: revenue managers estimate the future demand for a flight, use it to the determine the optimal fares and then publish those fares through the different sales channels. Until the date of departure, they continuously monitor the flight’s occupancy. Whenever the actual market behavior differs from their prediction, they adjust the fares and wait to assess the market’s response. We propose to improve this model by introducing a novel bottom-up channel from travelers to airlines. When an agent knows there is a passenger interested in a flight, they will be able to place a bid on a seat. Airlines will have access to an interface listing such interested passengers and their offered prices. They may accept a bid and thus immediately increase the occupancy of a flight, without the need for continuous fare readjustment. This would deeply change the dynamics of the market, providing airlines with real-time information about the demand. At Option Way, we are experts in air travel. We have developed a comprehensive toolset to communicate with flight reservation systems and have conducted insightful research on airfare volatility. With airlines being a 10-billion Euro industry in Europe, and the number of passengers expected to nearly double in the next ten years, we strongly believe in the broad impact of our product, contributing to the financial health of air carriers and the more efficient use of resources.
Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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H2020-EU.2.3. - INDUSTRIAL LEADERSHIP - Innovation In SMEs
MAIN PROGRAMME
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H2020-EU.3. - PRIORITY 'Societal challenges
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H2020-EU.2.1. - INDUSTRIAL LEADERSHIP - Leadership in enabling and industrial technologies
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Topic(s)
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
SME-1 - SME instrument phase 1
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) H2020-EIC-SMEInst-2018-2020
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
06560 Valbonne
France
The organization defined itself as SME (small and medium-sized enterprise) at the time the Grant Agreement was signed.
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.