Competing offerings by the technology companies Volantio and Caravelo are giving airlines tools that promise to increase revenue on crowded flights while making customers happy.
The tools enable airlines to shift low-paying but flexible passengers from crowded flights to ones that are expected to be less busy, thereby opening seats on the full flights for more pricey, close-in bookings.
The winners in this equation, said Ohio State University aviation studies professor Nawal Taneja, are the airline, the passengers who voluntarily give up their seats and the business passengers who find more availability to take a last-second trip.
Volantio CEO Azim Barodawala said of the technology, "It's about ways that airlines can maximize capacity utilization better without leading to a really poor customer experience."
His Atlanta-based company is servicing Alaska, Qantas, Iberia and Volaris with the post-booking revenue optimization tool that it rolled out last year.
United also used the Volantio tool in a trial last year but thus far has not signed on for more extensive deployment.
Barcelona-based Caravelo, meanwhile, revamped its post-booking optimization tool at the end of 2017 and has it deployed with Latam and Portugal's TAP, said CEO Inaki Uriz.
The specifics of how the two tech companies deploy the systems depend on what their airline clients want. But in general, both systems identify flights for which bookings are moving forward at a pace that suggests they will be full. The systems then send messages via email or text to ticket holders, offering them compensation in exchange for a willingness to give up their seat and take a different flight.
Offers can be made in the form of vouchers, loyalty points or upgrades.
Both CEOs said their tools have the ability to work not only on direct routes but also on itineraries with plane changes as well as on codeshare itineraries. Next month, Uriz said, Caravelo will deploy its post-booking tool for codeshares with as-yet undisclosed airlines.
Ultimately, Barodawala said, Volantio will use artificial intelligence to determine the type of passengers who are most likely to accept an offer. Thus far, he added, company research has shown that traveling couples are the most receptive to such changes in plans.
Volaris began its use of the Volantio post-booking tool last month, beginning with selected routes that have more than one frequency per day, said Holger Blankenstein, an executive vice president for the carrier. Early indications have been encouraging.
"We've had some upticks," Blankenstein said. "What we've noticed is that we need to tell customers in advance that we have this sort of service implemented. You can't just send them an email."
Post-booking optimization is just one service for which airlines are increasingly calling on technology providers in their efforts to mitigate operational difficulties and generate incremental revenue.
Volantio and Caravelo, for example, also push out offers to help airlines manage overbooked flights as well as flights that are, or might be, disrupted for operational or weather-related reasons.
Uriz estimated that when used in combination, the three rebooking services should earn airlines $1 to $2 per passenger flown.
Tech companies are also providing services to airlines such as last-minute upgrade auctions for empty seats in first and business class and selling empty economy seats to booked economy passengers who want to guarantee an empty seat next to them.
Volaris is utilizing Caravelo technology for what it calls Volaris Standby Tickets. Under the initiative, a customer can enter a below-market offer for a ticket. If there are empty seats in the last 36 hours before departure, Volaris will book and inform the passenger.
Taneja, the Ohio State professor, is bullish on the standby tickets concept, saying it's not technologically complex. But in general, he sounded a note of caution about airlines' efforts to wring incremental revenue out of tools such as post-booking optimization.
"How are they going to get it embedded into existing passenger service systems?" he asked. "How are they going to determine which passengers to give the offer to? I think all of these technologies are great, but will they work?"
He added that airlines have larger distribution issues to tackle as they consider implementing dynamic and personalized pricing models in which prices and offers can change by the minute and can be tailored to the individual doing a ticket query.