It is also known as Revenue Management System; it understands, anticipates and reacts to the behavior of customer to maximize revenue for the organization. This takes into account the operating costs and aids AirAsia to optimize prices and allocate capacity to maximize expected revenues. The optimization is done on two levels in AirAsia:
Seat (Every seat is considered an opportunity to maximize revenue. Seats are available at various prices in different points of time. A reservation done at a later date will be charged more than the one done earlier – for the same seat)
Route (By adjusting prices for routes/destinations that have a higher demand when compared to others). The effective method however is to combine these two levels for all flights, all routes so that both the seat and the route are effectively priced for all the flights.
AirAsia has realized increased revenue (3-4%) for the same number of aircrafts by taking advantage of the forecast of the high/low demand patterns, effectively shifting the demand from low period to high period and by charging a premium for late bookings. Over the past couple of years, AirAsia have actually lowered prices (essential for LCC) as the YMS has given them the window to increase their revenue by offering higher discounts, more frequently during off-peak times while raising prices only marginally for peak times. (Voneche, n.d).
Computer Reservation System (CRS)
AirAsia’s CRS (Open Skies by Navitaire) has helped it to grow at a dramatic pace in the past couple of years
"Navitaire's Open Skies technology has truly enabled Airasia's growth from 2 million passengers to 7.7 million passengers in less than two years. Open Skies scaled easily to accommodate our growth."
- Tony Fernandes -
CEO - AirAsia
Source: Navitaire (http://www.navitaire.com/res_and_dist/openskies.asp)
It is an integrated web-based reservation and inventory system. It includes Internet, call center, airport...