The airline pricing model is completely broken, according to remarks made by Michael Bentley, a partner at Revenue Analytics, Inc., to the 2013 Global Business Travel Association Convention today in San Diego. “Airline pricing still relies on the same data and core principles that it adopted at the advent of Deregulation. Others in the travel industry, such as hotels and rental cars, have seen average rates increase over the years. Despite airline consolidation, airline prices have steadily declined,” Bentley remarked. During his address to the travel executives gathered for the GBTA conference at the San Diego Convention Center, Mr. Bentley described how airlines are treating the symptoms of a flawed seat-price strategy by charging customer-annoying add-on fees. “The reliance of airlines on baggage fees, change fees and other ancillary income is angering customers and will have long-term negative consequences,” he said. Hotels originally learned Pricing and Revenue Management concepts from the airlines. Now, Bentley suggests that airlines learn from hotels. “Hospitality Price Optimization works because it is aligned with the way customers think,” according to Bentley. “Sophisticated systems search competitive rates, measure customer trade-offs and analyze millions of alternatives to set the right rate for each customer segment for each room, each night.” “If airlines followed the same approach, they could improve revenue and customer satisfaction simultaneously,” he concluded. Copies of Michael Bentley’s presentation, “Harnessing the Power of Analytically Driven Pricing Strategies: A Win for Airlines and Their Customers,” may be obtained from Revenue Analytics, Inc. Related Link: Revenue Analytics