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National Express boosts profits with revenue management system

UK rail and bus operator National Express has boosted sales on its new East Coast franchise by 2.5% after upgrading itsrevenue management system

Suzanne Donnelly, head of revenue at National Express, said the revenue increases were down mainly to automation, which allows her team to make thousands of pricing decisions a day. "Without a revenue management system, we may end up selling far too many low-price £10 fares," she said.

Speaking at retail software house JDA's annual rail revenue management conference last week, Donnelly said that National Express needed to address the problem of overcrowing on peak-time services. "We have to encourage people to avoid peak-time travel, and stimulate demand during off-peak times with low fares and promotions."

The system, which was supplied by JDA, works by analysing historical data and forecasting demand so that the company can set prices more accurately based on availability. National Express plans to enhance the package to enable it to sell tickets matched to competitors' fares, including travel by plane, car, coach and rail. "We will be able to go from 'What-happened forecasting' to 'What-if forecasting' because the information is more accurate and more relevant," she said.

Donnelly said information from the revenue management system would also enable the company to simplify its terms and conditions. "We are moving to a situation where we will have a single standard terms and conditions but multiple price points," she said.

Donnelly said National Express, which worldwide carries more than one billion passengers a year, may also use the system to cut costs in crewing and catering by knowing how busy a service will be and so how many staff or snacks will be required.


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