Aug 17, 2020
Why you have to check out today’s podcast:
- Learn how the airline industry comes up with optimal pricing to maximize profitability
- Find out how to come up with optimal pricing to move the industry appropriately even in a competitive environment.
- Discover the needed skill sets of a leader to keep driving to get things done
Chris Amenechi is a VP of Pricing and Revenue Management at Copa Airlines, and Managing Director at Amencil, Inc. He is a transformative travel leader who is an expert in Merchandising, E-Commerce, Distribution, Pricing, Revenue Management, Planning, and Corporate Strategy, Digital and Data Strategy, Marketing Optimization, and Business Process Transformation.
In this episode, Chris shares about how revenue management works in designing a pricing mix for an airline company. He went on to discuss the people and skillsets needed to form a strong team to meet a company’s objectives. At the same time, he points out what leadership traits you need to possess to be an effective VP of Pricing.
“Pricing is not a sprint, it's a marathon. And so, yes, inasmuch as you're shortsighted to make a quarter work, you want to elevate the year and the next year and the next year. The whole idea is to get your product, depending on what it is, to be at the top of the marketplace.”
- Chris Amenechi
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Topics Covered:
01:20 - What led Chris onto the Pricing path
02:11 - How does revenue management differ from yield management
04:30 - How much of the fees passengers pay add up to an airline’s profitability
07:45 - Thoughts on everyone being upset over airlines starting to charge for checked luggage
11:19 - How about giving a discount to passengers with no checked luggage
12:13 - The characteristics needed to become a VP for Pricing
15:57 - Why the need to look at pricing from a customer perspective, from an industry perspective and a competitive perspective
19:09 - Talking about the risk-averse nature of most management
21:06 - Who gets to be promoted or not
Key Takeaways:
“If you want to get the optimal revenue point you've got to get into some revenue management, which means there are loss leaders, there's this cheaper prices, there's this more expensive prices based on all the demand, all the demand profiles you have, the customer profiles you have. Revenue management is the ideal pricing and allocation of inventory and combining the two is an optimal way to generate the most for the system of that airline.” - Chris Amenechi
“Everybody in the world, whether it's the phone companies, your cable companies, they're able to restructure their rate structures. So they would give you the minimal package and they'll go up to the big packages and then if you wanted anything additional was your choice. It’s the customer choice model and it was an upsell model.” - Chris Amenechi
“I would say two most important things needed to get promoted to VP are a dedication to being a bit of an innovator, a bit of an expert, and also a bit of a routine player. You've got to be able to do all three.” - Chris Amenechi
Connect with Chris Amenechi:
Connect with Mark Stiving:
- Email: mark@impactpricing.com