Implementation of cargo revenue management at KLM

Abstract

The practice of revenue management (RM) is well-established in the passenger airline industry. In the cargo industry, however, the RM concept is underdeveloped. This practice paper describes how KLM Cargo implemented RM and how it learned to overcome the difficulties related to this. First, some key characteristics of the air cargo industry are described that are crucial to RM. After the introduction of RM principles and organisation, processes and systems are discussed. The final section highlights learnings and critical success factors during implementation, as well as plans for the future.

One year after the implementation, RM is fully implemented, even down to shipment level. RM principles are firmly established in the KLM Cargo organisation and RM has a real impact on KLM Cargo results. The main reason for success is the combination of simple tools, management commitment and — most importantly — focus on the real world and the people who make it work.