Question

why does yield tend to decrease with effective revenue management? For airline industry.

Answer 1

Answer - REVENUE MANAGEMENT AND YIELD MANAGEMENT :-

The basic difference lies in there technicalities ,however yield is a part of revenue management only.

In other words, where REVENUE management is the whole plot with proper analysis and future prediction in which YIELD management serves to bring optimised or best possible price for tickets in aviation industry.

YIELD DECREASE WITH EFFECTIVE REVENUE MANAGEMENT AS -

Calculating only yield will not consider ASSOCIATED COSTS i.e. fuel and labor in aviation and also the ANCILLARY REVENUE . Example - Wherein the yield management it will just consider the selling of tickets and at what price it has been sold as in peak time high costing tickets are also sold which will increase it but to serve these excess customer there might be needed extra staff that would deduct overall actual revenue which is considered under EFFECTIVE REVENUE MANAGEMENT. And owing to it the actual turnover will reduce making the actual or real yield amount to be less than the mere volume of sales of tickets. This makes REVENUE management a broader term than yield which includes associated costs and ancillary revenues too

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