The travel industry loves a bit of jargon but even department specific lingo can impact communication between departments. Tom Bacon is here to help

Due to an over forecast of demand, RM closed some lower buckets prematurely, driving spoilage and ultimately resulting in lower RASK – revenue per available seat-kilometre.  ‘RASK’, ‘Closings’, ‘Buckets’ ‘Spill and Spoilage’ are all RM speak. But do they fall on deaf ears in other parts of your organisation that may speak a different business language.

What that means, is that there may be some difficulties in communication, and the ability to align tactically and strategically across departments.

Clearly, it behooves RM to translate its work into the language of the other departments, which it depends on for various inputs or support. But it also means most departments need to understand some fundamental RM terms, like RASK, and the impact those departments can have on it. After all, RASK is often the primary integrating mechanism to align commercial departmental activities.

Let explore the language of some other departments to help form a basis for ‘RM interpreters’.

                Sales: Primarily oriented toward point of sale, revenue management certainly needs to consider point-of-sale (POS) in its pricing algorithms but POS is generally a secondary issue, behind fare mix, load factor, no-show rates, and fare rules. 

                When POS is a factor for RM, one POS is favoured resulting in greater difficulty for other to get seats – a bias toward one sales region is not always clear to the broader sales force.

                Sales, too, is often much more aware of volume than price. RM needs to educate sales on yield and push for sales targets that drive improved fare mix – more corporate customers, for example.

                Marketing: Like sales, marketing is often volume-focused. They may consider a campaign highly successful if it produces a record number of bookings but they’re unlikely to focus on the RM perspective unless someone interprets the results accordingly. Difficult concepts include:

1) An especially aggressive fare discount that demands even higher bookings to be successful
2) ‘Borrowed’ bookings from future periods that means, ultimately, the promotion may not have actually driven more sales;
3) Sales for off-peak periods that have a much lower booking threshold to be ‘successful
4) ‘Spill’ that means bookings are not incremental but instead displace higher fare passengers.

                Schedules: Now they are interested in which flights are working (driving profits) and which are not.  Schedules is also interested in the value of connections versus direct flights. They are interested in the most important connections from both a traffic and revenue standpoint. And they also rely heavily on observed demand: like marketing schedules may also be less aware of spill – what passengers are we turning away by having constrained capacity? How low fare is ‘spilled’ demand? Are there particular O&D’s most effected by spill?

                Finance: Finance is interested in the short-term and long-term revenue outlook; they are also interested in cash flow – when the booking is made. Even if resulting revenue is the same, if the booking curve moves closer-in to the flight departure, finance may see a cash impact that most operating groups would not be cognisant of. Also, finance cares about channel mix. Given the much higher cost of certain distribution channels, a shift toward or away from certain channels is important to Finance.

                Operations: The target RASK can be achieved with high load factors or high yields. But operations is much more concerned with load factor than yield: a 90% load factor flight translates into longer boarding/de-planing times, more bags, more misconnected passengers and mishandled bags, more drinks and meals … ultimately more work for airport personnel. Over sales, no-show rates, and denied boarding are all managed by operations -- but their work makes them much more aware of denied boarding (the difficult job of managing overbooked flights) than the cost of empty seats due to no-shows. One airline I have worked with produced a monthly report that showed both the cost of overbooking (denied boarding, vouchers) and the benefit (filling empty seats).

To sum up, revenue management must work with a variety of other departments, each of which has its own goals – and its own language. To align activities across diverse departments, airlines need a unifying metric like RASK and the ability to translate internal vocabulary to other vocabulary of other departments.

Regular guest columnist Tom Bacon is a 25-year airline veteran and industry consultant in revenue optimisation. Questions?  Email Tom at or visit his website