BA's new Head of Revenue Delivery
The airline's job advert shows why they are still a force to be reckoned with in pricing & revenue management, but there are still some opportunities for them to improve
A recent job ad from London-based British Airways is just as interesting for what it does not include as for what it does.
The airline is looking for a new “Head of Revenue Delivery”. It appeared on my LinkedIn feed last week.
Although it looks great, I won’t be applying as if successful I would have to give up being your favourite airline revenue economist. You can apply if you visit the BA careers portal before 17-Feb-2025.
The job description is shown below.
British Airways have had their share of commercial misadventures like “brunchgate” (see article) and the missed opportunity of redefining their loyalty tier qualification thresholds (see article).
The airline seems to have characteristics of an organisation where decisions are taken in silos with arbitrary performance targets in mind.
But nobody ever says “the one thing British Airways needs to do better is pricing and revenue management”. The airline has a great reputation in the field. I learnt a lot of my trade by watching what they did and figuring out why.
Here are some of the things they do well:
1. Something for everyone price points in every cabin, making good use of all their capacity
2. Achievable redemption prices and a strong Amex co-brand (see article) to attract mass affluent consumers
3. Sensible change and refund fare fencing, instilling strong market discipline that if you want the inventory you need to pay for it
4. A clear distinction between sale and non-sale periods, helping the leisure part of the market understand when the best time to buy is while retaining willingness to pay from the business segment
5. Effective use of dual inventory to price First cabins subject to fragmented demand based on underlying high volume Club World demand (see article) and World Traveller Plus based on underlying the same effect in World Traveller
6. The recent move to decouple refundability from fare class, monetising the cancellation option in the face of fundamentally broken fare structures that are priced mainly to accommodate corporate discounts (I will have more to say on this in a future article).
The job description for the Head of Revenue Delivery is in some respects a pleasure to read. It harks back to a simpler time of plain old revenue optimisation.
Not once does it mention “NDC”, “offer-order” or “retailing”. It covers all three sides of the pricing coin when it says “generating commercial revenue from fare, relevant ancillary and redemption products”.
I note the “redemption products” bit with interest. BA have already moved Avios earning rates from distance-based to a revenue multiple. They have also changed the way people earn shiny card status from flight-and cabin-based to pure revenue. Along the way they sensibly decoupled reward prices from YQ surcharges (see article).
Surely they will now complete the hat-trick and introduce some form of dynamic pricing for Avios redemptions too.
I hope that the new Head of Revenue Delivery will avoid the elephant trap of losing the guaranteed seats on every flight at good value Avios prices that are achievable in the mass market, as these keep London’s huge mass affluent market segment loyal.
The job purpose is nice and simple. “Maximise revenue through leading a team of professionals to define and deliver pricing and inventory strategies based upon analytical evaluation of market opportunity.”
The key performance indicators (KPI) section has some interesting bits in it too. Demand forecast accuracy (see article) is there.
Under- and over-protection are in there too. These are the revenue integrity equivalent of spill and spoil (see article). Under-protect your revenue and you will get various forms of abuse by travel agents with an eye for the main-chance. Over-protect and you will simply lose sales as agents come to believe that dealing with you is too difficult or risky.
I love the final KPI: “reality check”. This couples with other statements in the job description too, including “anticipating requirements” and “proven experience of getting things done and driving beneficial change”.
If there had been more “reality check” elsewhere in the airline they would not have introduced the strange brunch service.
These are perhaps the most important skills in pricing and revenue management. Having the ability to bang on doors and convince often reluctant senior stakeholders to act on often abstract ideas and complex analysis is a rare skill that is not always welcomed at airlines. Not everyone at British Airways will welcome it either.
So all in all I think this looks like quite a good job. I would encourage people to apply for it.
However there are also a few shortcomings evident in the job description. Consider the following:
“It is essential that I work closely with the other revenue delivery teams, other parts of the Revenue Management organisation, relevant JB partners and also other key partners across the rest of commercial, Network Planning and the wider BA organisation.”
“Strong collaboration with Network Optimisation team to act upon identified risk/opportunities which could improve overall network RASK.”
“Active engagement with stakeholders across Commercial to communicate strategy and performance”.
I do not know what JB partners are. Possibly joint business, i.e. their friends at American Airlines, Finnair and elsewhere within IAG. Answers on a postcard please…
There are a few other terms undefined in the job description. They ask for “provide market-based input assumptions to RPG, RF, FP and BP revenue forecasting processes” without explaining what these terms mean. My guess is:
RPG – no idea, but it will be obvious when you hear it
RF – revenue forecast?
FP – fleet plan or financial plan?
BP – business plan or budget plan?
Again, answers on a postcard please…
I would not be surprised if they are targeting people who already work at IAG as they will know what these abbreviations mean.
There is a big emphasis on working with network planning, the part of the airline which figures out how to deploy the airline’s capacity in terms of where planes in each sub-fleet should fly.
Estimating average fares and demand is an essential part of this process. When new routes are considered, fare and demand levels need to be estimated from scratch.
When capacity is being tightened the new Head of Revenue Delivery will need to advise the network planning team how much revenue will be retained. When capacity is being expanded network planning will need to know how much revenue will increase by.
This is not an easy process. Due to the Law of Demand, adding capacity only increases the opportunity to sell more seats at lower fares, not the current average. When taking away capacity, revenue management will ensure that the seats currently sold for the highest fares are still sold at those prices.
There will be strong relationships in place between revenue management and network planning. These are reflected in the job description.
What I would hope to see a bit more of in the job description is a deeper relationship between revenue management and loyalty, and between revenue management and the in-flight product teams.
The new Head of Revenue Delivery will be in an influential position. Revenue management are one of the few departments in an airline who can approve or veto commercial strategies.
But the way things are done at most airlines today, including at BA, revenue management monetise and capture demand, they do not create it. I think that airlines should think more around how demand is created through loyalty and the on-board product and service.
Combining revenue management’s authority with a bit more creativity in these other departments would be a winning combination. So if I were hiring a new Head of Revenue Delivery, I would be following this path. Will BA do it? We will have to wait and see.
One area where the job description is silent is salary. It is hard to know for sure what BA’s salary scales are. But I have some standard salary scales that I have used, adjusting for inflation, since 2011.
On this basis I would expect BA’s new Head of Revenue Delivery to earn somewhere between about £99k and £155k, depending on whether they are moving on promotion (lower end) or laterally (mid to high end).
Good luck to anybody who applies.
oliver AT ransonpricing DOT com
oliver DOT ranson AT inkaviation DOT com
Read more about British Airways and their IAG partners:
BA's Advance Booking Curve Revealed
Finding routes with offer & order potential on Iberia & Vueling
Book Review: The British Airways Trilogy by Paul Jarvis
Costing BA's Avios-only flights to Dubai
Why has BA tightened ID checks on UK domestic?
Why does Aer Lingus not offer premium economy?
Battle of the Beds – Club World vs Upper Class