Ben Vinod has made quite a name for himself in the commercial aviation industry over the last few decades, holding prominent leadership positions in both the airline industry and travel technology industries.
He was Vice President, Pricing & Yield Management for American Airlines Decision Technologies before eventually moving on to Sabre where he would become Senior Vice President & Chief Scientist.
Vinod initiated and chaired the Sabre Innovation Hub in 2014 to showcase next generation solutions in travel and the Artificial Intelligence Special Interest Group (AISIG) to accelerate adoption of AI and Machine Learning methods. Additionally, he serves on the editorial board of the Journal of Revenue and Pricing Management. Therefore, there are few individuals more knowledgeable in the space.
However, Vinod has shifted his attention to the chartered flights space with the launch of his new startup Charter and Go.
Recently, Kambr Media caught up with Vinod to learn why he made the switch, what his new startup is all about and got the lowdown on his recently published book on yield management.
Kambr Media: What's most interesting is the background of you and your team coming from scheduled flights. Can you briefly discuss your background and how it ultimately led to founding Charter and Go?
Ben Vinod: Yes, the founders of Charter and Go worked in the commercial aviation industry. They are Christian Huff, Ben Vinod, Peter Moore, and Dave Hobt.
We have a collective experience of 100+ years in commercial aviation, working at full-service carriers like American Airlines, low-cost carriers like Spirit Airlines, and Global Distribution Systems like Sabre and Galileo. We started Charter and Go after the onset of the COVID-19 pandemic in Q1 2020 and, being aviation veterans, we wanted to apply our collective talents to an industry we believe will become the next big travel disrupter.
We have an incredible, energetic team at Charter and Go:
- Founders are veterans of the aviation industry
- Proven UX creator
- Revenue Management leader in aviation
- One of the leading system architects in the industry
- One of the leading architects for online transaction processing
- Young developers that live, eat, and breath technology
- Several current and former military team members
- Everyone takes on multiple roles to make it happen
- Our CEO (Christian Huff) is on the board of JetPerfect Foundation which looks at reusable energy alternatives.
The founders are passionate about the team we have built, the industry and our product. We work together well as a team and have an incredible work dynamic. This is how we launched our baseline product in 15 months.
"We have a collective experience of 100+ years in commercial aviation, working at full-service carriers like American Airlines, low-cost carriers like Spirit Airlines, and Global Distribution Systems like Sabre and Galileo."
The team is very passionate about their work. Over the past year the team has donated a significant amount of time and effort to build the right tool we believe in for an industry we are excited about.
How are you reinventing the charter space?
The charter industry is highly fragmented with many charter operators. We are bringing a consistent and repeatable business process to the charter industry to ensure predictable top line growth and profitability.
We have evaluated existing charter industry challenges and are bringing to market a solution that boasts several industry firsts that enhances the value proposition for profitability of charter operators. Collectively as a team, we are passionate about our people, the charter industry, and our solution.
Some of these key differentiators are:
- Performance Reporting for transparency into key operational metrics in real time to promote operational efficiency and company profitability.
- Shopping Orchestrator for automatic selection of aircraft and routing based on trip objective and customer preferences.
- Total Cost of a Flight calculated in real time based on expected annual aircraft utilization that guarantees that every booking is a profitable booking.
- Dynamic (Continuous) Pricing to generate a price quote for a charter flight automatically based on prevailing market conditions to promote top line growth.
- Dynamic Aircraft Repositioning with a dynamic search radius for repositioning at the origin point based on origin/destination mileage of the customer request.
- Dynamic Empty Leg Fulfillment with a dynamic search radius at the origin point and destination point based on origin/destination mileage of the customer request.
- New generation Order Management and Reservations with booking capture, eAPIS, TSA compliance and order management tracks all data (e.g., hotels, car, payment status) for customers and crew with a single reference order.
- Operations dashboard allows charter operators to assess operational readiness (filed routing, contract fuel, aircraft tracking, crew status, scheduled maintenance, weights, trip sheet, and an assortment of documents) for upcoming trips.
- Customer Loyalty dynamic discount based on actual spend to actively promote customer retention of the most profitable customers.
- Distribution Platform to address the needs of charter operators who rely on brokers to generate bookings. The AI-enabled distribution platform learns continuously from past conversions and generates offers based on mission objectives, customer preferences, and aircraft availability.
What are your long-term ambitions for Charter and Go?
The current Charter and Go product support U.S. domestic flights and international flights with a U.S. point of commencement.
In the near term we plan to launch our Distribution Platform in the first quarter of 2022 which allows brokers and third parties to shop and book charter flights.
In the longer term, which is 1 to 3 years from now, our plan is to expand the Charter and Go solution for international markets, support scheduled flights, cargo operations, and adapt the solution for a new generation of aircraft, eVTOL (electric Vertical Take Off and Landing), that will disrupt the private air space in a few years.
eVTOLs will bring the cost down for charter flights by an order of magnitude, paving the way to access a segment of the population that has never taken a charter flight. Our systems are designed with flexibility to induct new aircraft with the latest technology.
Can you give us a brief synopsis of your book The Evolution of Yield Management in the Airline Industry: Origins to the Last Frontier?
After leaving Sabre in 2020, I decided to write a book entitled “The Evolution of Yield Management in the Airline Industry: Origins to the Last Frontier.”
In some ways I was lucky since I joined American Airlines in 1985 and worked on the world’s first yield management system which was deployed in 1986. This book is the culmination of my involvement with yield management when I worked at American Airlines and Sabre.
There is an abundance of content in the literature on the mathematical models for revenue management from academics and practitioners, and many are referenced in this book.
"In my various roles at American Airlines and Sabre, I was fortunate to have had the opportunity to work on all facets of the travel value chain."
This is a practice book on pricing and revenue management for professionals, in an easy-to-read style, that provides an end-to-end view of the airline revenue management space.
In my various roles at American Airlines and Sabre, I was fortunate to have had the opportunity to work on all facets of the travel value chain ranging from the origins of reservations and distribution, airline pricing, revenue management, connectivity, inventory control, availability, alliances, reservations, distribution, agency revenue management, integrated business process across airline silos, and advances in emerging technologies such as big data, blockchain and artificial intelligence that have an impact on travel.
This breadth of scope is not covered in books and journal articles, and it is a gap I wanted to address in this book.
The book has forewords from Robert Crandall, Tom Cook, Ian Yeoman and Nawal Taneja. The book has 12 chapters, 3 appendices (Traffic Freedoms, Airline and Industry Acronyms, and Glossary), 450+ References, and the hard copy is 400+ pages. The book was published by Springer on May 29, 2021.
And finally, we’d be remiss not to get your general thoughts on the progress and application of machine learning and AI within the discipline of revenue management. Where do you see the technology heading?
Since airline deregulation in 1978, Operations Research (OR) has played a key role in solving complex problems in airline revenue management. Many of these applications can be enhanced with AI, which is at the intersection of technologies that reason, interact, and learn.
While adoption of AI in the travel industry has been slow, the potential incremental value is high to support revenue growth, reduce complexity, and enhance the customer experience by simplifying travel.
Here are a few examples:
Demand forecasting can benefit from machine learning models such as support vector machines, random forest, gradient boosted trees, and neutral networks to improve accuracy.
Improving forecast accuracy generates incremental revenues with more accurate inventory controls. Studies have indicated that in several scenarios machine learning models outperform traditional methods.
Offer management extends the traditional revenue management process of optimizing allocations for the base fare to include air ancillaries offered by an airline.
The process of selling the right product bundle to the right customer at the right price at the right time can benefit from AI/ML techniques. Unsupervised and supervised learning techniques can be used to segment customers based on context for travel.
"While adoption of AI in the travel industry has been slow, the potential incremental value is high to support revenue growth, reduce complexity, and enhance the customer experience by simplifying travel."
Continuous learning without human intervention is a building block for intelligent retailing with the multi-armed bandit to manage online controlled experiments to learn customer behavior and recommend bundles that maximize conversion rates.
This is a reinforcement learning technique that captures real-time changes in the marketplace such as customer purchase behavior patterns and competition.
Individual seat pricing is considered the last frontier in revenue management since control of inventory is at an atomic level, the individual seat, and not by booking class.
Several factors contribute toward determining the dynamic price for a seat such as the seat type (aisle, window, exit row, premium economy (wider pitch), basic economy), length of haul (short, medium, long), market, schedule attributes (aircraft type, departure time of day, non-stop versus connection), number in party (seats required together), channel, etc.
These factors influence the probability of purchase of a specific seat. Monetizing seats with a dynamic seat price are an active area of research by leading airlines today with various machine learning methods being evaluated.
The opportunity for AI in revenue management is very significant and we are just scraping the tip of the iceberg.
Opportunities abound in experiential learning for revenue management user interfaces, corrective actions based on pattern recognition to improve revenues with the measures collected from the revenue opportunity model and many more.