ARC Creates Model For Determining Marketshare Goals In Corporate Airline Deals

ARC is building a model to help assess the proportion of passengers in a given market that should fly on each airline based on prevailing conditions. This approach can help airlines determine when corporate clients outperform targets relative to the baseline, and how big their discounts should be in return.

Called quality of service index (QSI) or fair marketshare (FMS), such models typically include flight frequency, seat capacity, connection versus nonstop and total journey time to estimate an airline's relative presence and desirability in a given market.

Some carriers, travel management companies and independent . . .

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Author: David Jonas

David Jonas in 2006 co-founded business media firm ProMedia.travel after ten years as a journalist with Business Travel News. David rejoined BTN in 2010 as executive editor when its parent company acquired ProMedia, and in 2014 co-created The Company Dime. David has a bachelor's degree in communications from Cornell University.

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Thomas Ruesink
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Thomas Ruesink

Kudos to Scott and ARC. I’ve always found one of the biggest challenges with QSI goals happen to be which markets are grouped together to reach that goal. If the carrier goal amongst a group of markets is QSI plus 15% and a market with a 2% QSI is in that grouping, does the carrier really have the lift to get it to 17%? Also, if a market that is at 90% is in that grouping, there’s no mathematical way to get it to 107%. Therefore, the client needs to overperform in the competitive markets within the grouping reaching 20-25%… Read more »

Scott Gillespie
Advisor

Thank you, Tom. You are so right. Broad-brush market share goals need to be resolved to the underlying individual city pairs, and sanity-checked for achievability.