New Revenue Management Career Paths

Revenue management career progression is a lottery – and harming airline revenues

The picture above shows the Doha-based pricing strategy team at Qatar Airways on 9th December 2010 – Paul, Faisal, Aljosa, Svend, me, Denisa, Merry and Amit. It was a great group and I would recommend working with them to everyone. Together, with the help of an expanding fleet, we helped Qatar Airways grow annual revenue from $2 billion to $5 billion.

But within a few years of this picture being taken most of us had gone to other countries and other airlines. The airline had lost our skills and experience, with similar stories played out across airlines every year.

Bottle neck

As people develop their careers and expertise they need room to grow and the traditional career path in airline revenue management, summarised below, in many cases simply does not allow this.

Young wonks seeking a career in data and monetisation at an exciting company join airlines as Analysts in their mid-20s. They build models, enjoy their staff travel perks and often come to love their industry. The first promotion, to Senior Analyst, is a recognition of their skills and the value they generate for the business.

But there are three shortcomings of the current career path:

(i) Only a limited number of Manager positions are available, making it hard for people to progress their career without somebody else leaving

(ii) People management, making things happen, leadership and motivation, the key tasks of a Manager, are specific skill-sets that are critical to management roles but have little to do with a person’s skill in revenue management

(iii) People management and making things happen is hard work that takes time away from the influence and industry recognition parts of a leader’s job, especially at Senior Manager and Vice President level.

After anything between two and ten years many Senior Analysts yearn to progress. Those who become Managers can often, by virtue of talent or time served, progress to Senior Manager and even Vice President. But the Senior Analyst to Manager jump is a bottleneck, with far fewer positions available than qualified individuals.

The result is that frustrated experts take their skills to other departments or, worse, competitors and other industries. Even for those who make it the typical Manager role is not necessarily the best use of their skills for the airline. When it comes to promoting talented staff, airlines lose money both when they do promote and when they do not.

Bottle opener

Establishing what I call a revenue engineering pathway is one of the ways that airlines can address this challenge. Under this model an airline can promote as many of it’s staff as it feels are deserving to more senior “engineering” positions without having to make them people managers. This means that the number of people that can be promoted to Manager, Senior Manager and Vice President pay grades is unlimited – great for staff motivation and retention, and reducing recruitment and training costs.

The picture below gives the idea – after some years as a Senior Analyst talented revenue managers can decide whether they want to pursue a management pathway or the revenue engineering pathway.

The revenue engineering approach solves the three shortcomings by sharing operational responsibility, influence in the airline and influence in the industry roles between the pathways. The management pathway takes more of the operational responsibility and the revenue engineering pathway takes relatively more of the influence in the industry.

The number of revenue engineering positions at each pay grade is potentially unlimited so the only constraints on promotion are the number of experts that the airline is willing to pay for. The cost of higher salaries are offset by productivity benefits of a workforce who stay in revenue management for many years.

Job descriptions

Write to me – oliver AT ransonpricing.com – if you would like a set of job descriptions for revenue engineers covering a revenue management department’s pricing, demand forecast and inventory team members.