Continuous Pricing: Beyond Filed Ladders

1) Simple Summary

Airlines used fixed price “rungs” tied to booking classes. Dynamic pricing adds more rungs. Continuous pricing lets you choose the best price between the rungs, safely and fairly, using rules and data. Roll it out step‑by‑step, keep accounting clean, and stay partner‑friendly.

Think of it like a dimmer switch instead of an on/off light. Smoother control fits demand better-and gets better results.

2) The Basics: Legacy, Dynamic, Continuous

3) Why It’s Worth It

• Closer match between demand and price (less “gap” loss).
• Smoother upsell to brands and extras people want.
• Cleaner experiments and faster learning.
• Future‑proof for Offer/Order and attribute‑based retailing.

4) How It Fits with ATPCO

ATPCO data still matters. It sets the rules: combinability, advance purchase, refund/change, brands, optional services, taxes, and surcharges. Continuous pricing builds on this or maps back to it for interline and settlement.

• Keep filed rules for legality and clarity.
• Use brands and optional services to describe the product.
• Track versions of data and prices for audit trails.

5) How It Works: A Friendly Overview

1. Signals: Demand, season, advance purchase, competition.
2. Guardrails: Safe min/max, margin targets, channel rules.
3. Offer build: Seat + brand + ancillaries → a clear offer.
4. Price select: Choose the best allowed price now (not just the next rung).
5. Tokenize: Return a price with a short “token” to validate at checkout.

6) Your Step-by-Step Transition

1. More rungs: Add smaller steps (virtual buckets) on key routes.
2. Simple rules: Adjust up/down with clear conditions.
3. Use signals: Bring in a bid price or demand score.
4. Smooth the curve: Allow intermediate prices inside a safe band.
5. Go attribute‑first: Decouple price from a single letter where you can.

7) Running the Hybrid Phase

• Two expressions: Keep a link to the nearest filed anchor.
• Fallback: If validation fails, offer the nearest allowed price with a clear note.
• Channels: Start on your website/app; add partners who can handle it.

8) Moving Toward RBD‑less

1. List attributes customers care about (flexibility, seat, bags, priority).
2. Map current RBDs to those attributes internally.
3. Track capacity by attribute (e.g., “Flex seats left”).
4. Hide RBD codes in the UI; use them internally until partners are ready.

9) Accounting & Settlement (Made Simple)

• Keep a small record: anchor fare, adjustment, taxes used, data version.
• Use normal tickets/EMDs today; include an Offer ID for tracing.
• As you move to Orders, split each item clearly (fare, bundle, extras).

10) Interline: Play Nice with Partners

• When needed, send the anchor and a fair split across sectors.
• If partners can’t read your token yet, step back to a discrete point.
• Watch for rounding losses and track them as a KPI.

11) Data, Guardrails, and Fairness

• Each offer: method (FILED/DYNAMIC/CONTINUOUS), model version, guardrail set, tax version.
• Stop odd prices with min/max and channel parity rules.
• Avoid sensitive attributes. Review features often.

12) KPIs to Watch

• Price gap closed (how much closer to the ideal price).
• Revenue uplift vs a control group.
• Offer-to-order reprice rate.
• Guardrail breach rate (keep very low).
• Interline rounding loss.

13) Risks and Easy Mitigations

14) Quick FAQ

15) Quick Checklist

• Define a safe min/max range around anchors.
• Add smaller steps on top routes.
• Return a token with each price and validate it at checkout.
• Track versions for data, price, and taxes.
• Set up a dashboard for uplift, reprice rate, and breaches.
• Have a one‑click rollback switch.

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