Best practice - Nesting

Guidelines for SMS users WorldTicket A/S 1.0 Jurij Cekurisvili Date: 2016-03-16

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Table of contents 1 Introduction to nesting ................................................................................ 3 2 Nesting types ............................................................................................. 3

2.1 No nesting (Distinct RBD set-up) ............................................................. 4 2.2 Serial nesting ....................................................................................... 4 2.3 Parallel nesting ..................................................................................... 5 2.4 Booking allowance vs. Protection level ..................................................... 5

3 Managing Nested RBDs ................................................................................ 6 3.1 Change of availability - Type 1 (steal from the next in nesting) .................. 7 3.2 Change of availability – Type 2 (steal from the highest in nesting) .............. 7

4 Nesting in Sell-more-seats ........................................................................... 8 4.1 Case 0 - No nesting ............................................................................... 8 4.2 Case 1 - Simple serial nesting ............................................................... 10 4.3 Case 2 - Serial nesting and independent RBD(s) which has effect on nesting 13 4.4 Case 3 - Serial nesting and independent RBD which does not have effect on nesting ....................................................................................................... 14 4.5 Cabin type nesting .............................................................................. 16

5 Adjustments in the settings of the nested RBDs in the inventory manager ........ 17 5.1 Shifting availability from the highest RBD in the nesting string .................. 18 5.2 Stealing availability from the next RBD in the nesting string ..................... 18 5.3 Closing the lowest available RBD in the nesting string .............................. 18

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Required initial knowledge The readers should have a basic SMS knowledge and initial experience of creating inventory templates and applying them to the flights in the inventory manager, as well as opening and closing booking classes manually in the inventory manager for specific flights.

1 Introduction to nesting Nesting is a set-up where you instruct the system to close certain RBDs earlier then they are fully booked, if some other RBDs (which may be nested with the current RBD and may be not) receive the bookings. For each booking class you may specify whether it is independent or not. In the latest case, you may decide on which booking classes its availability should depend. Definition of nesting as such is based on the understanding that RBD’s availability is part (nested with) another RBD, and that another RBD is nested with the next one etc. Nesting makes sense to use when any of the statements below are correct:

- You have a small aircraft (20 seats and less) and / or you plan to use very small number of seats available for each fare level (like 1 or 2 or 3 seats only per RBD).

- You have some special non-commercial RBDs, used for group bookings or service tickets, and you do not want your promo RBDs to be closed due to those bookings coming in.

- You have charters sales channels and you do not want your promo RBDs to be closed due to charter bookings coming in

- You believe that your customers are not only price oriented and that is why you expect them to buy not only the cheapest available fare (because of flexibility or baggage allowance or meals or anything else)

- You have diversified sales channels with some fares in your regular RBDs available only for GDS or OTA, and you perhaps want to have your cheapest fares on web to be closed as you have more expensive GDS bookings coming in

Or to keep simple all said above, the nesting must be used if you believe that reservations coming in to your expensive RBDs should close / reduce availability in your cheapest RBDs. There are no reasons to use nesting if:

- There are no more than 3 boking classes available for sales - You only have one fare rule or the difference between the fare rules are minor - You expect your customers to choose the lowest fares available all the time - You only have one or two sales channels and same fares are available

simultaneously in all of them

2 Nesting types There are three basic configurations available:

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2.1 No nesting (Distinct RBD set-up) In case of nesting all RBDs are independent. Hence, the only way how the availability in a given RBD may be affected externally – if the remaining capacity on the flight is less than the remaining availability of a given RBD. Otherwise, RBD B sales do not have any impact on RBD Z, and vice versus.

2.2 Serial nesting Serial nesting is a most widely used nesting type. Here we have a series of RBDs where each RBD on the top has an availability of the RBD one step down plus its own protection level. Sales in any of the nested RBDs will affect availability of all the other RBDs.

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2.3 Parallel nesting Parallel nesting may (but not necessarily should) be a combination of few serial nestings. Here, we can have several RBDs flows which will be dependent on their internal sales but not on sales via another nesting. This is, however, quite a dangerous configuration as it may result in an unsold capacity if one of the distribution channels is not fully booked. So it requires a lot of manual control on the dates close to departure date.

2.4 Booking allowance vs. Protection level Protection level is not used in Worldticket’s configuration, it is, however, necessary to understand its meaning as it is an industry used definition. Protection level reflects the number of seats “reserved” for this RBD only on the top of those which are below. Protection level is in fact the difference between the RBD booking allowance and RBD’s one step down booking allowance. In case of no nesting, protection level is equal to booking allowance since all RBDs are independent while in case of nesting - the protection level is equal or less than booking allowance (max). Protection level may also be equal to zero. This actually means that RBD will only stay open as long as the one below is open. In practice, it means that the price of this RBD will never be the lowest price available on sale.

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Most of Worldticket customers who are interested in nesting are using a combination of serial nesting and not nested classes. This is done in order to protect the sales in the low promo classes in case if group reservations or charter reservations are coming in to some special dedicated RBDs.

3 Managing Nested RBDs Typical task which most inventory managers face on a daily basis is to open a booking class one step up or one step down to change the lowest price on sale or to increase / decrease the number of seats in a RBD currently on sale. in case of distinct RBDs, it is sufficient to change only the availability of the targeted RBD. By increasing X availability from 10 to 15 – we are only affecting the highest RBD. Number of seats to be sold in other RBDs remains the same.

However, in case of nesting such a simple change may result in a non-desired seat allocation. Increasing only availability of the lowest RBD in fact is stealing some availability from the RBD one step up. The other RBD will not be affected at all.

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3.1 Change of availability - Type 1 (steal from the next in nesting) If availability of the lowest RBD is increased to a higher level than the booking allowance of the next RBD in nesting, it will result in switching off this RBD from the sales process – the price will go from 100 straight to 300. Hence, the availability will also be stolen from the RBD two-step up.

3.2 Change of availability – Type 2 (steal from the highest in nesting) If the desired outcome is to achieve a shift of the availability up for each nested RBD as well, so that we have the same protection level for each RBD above the one to be changed – then all of those RBD should get the same availability increase as the one changeable gets

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In the example above, we have increased the protection level for X by 5 seats by stealing this extra seats from the highest RBD in the nesting Y. This was done by adding 5 seats to all RBDs MAX in the range from X up to B. Hence, the protection level for H,K,B remained in the old level, but availability in all of them has grown by 5 to compensate for the protection level increase in X.

4 Nesting in Sell-more-seats There are two types of nesting configuration, supported in Sell-more-seats. In case of Category nesting, the reservations done in Business compartment may only affect the RBDs which are in Business as well, so any reservation done in Economy will not reduce availability in Business, and the other way around. So the compartments are independent and separated. It is possible to have several nestings in two compartments, for example one nesting in Business and two in Economy. It is also possible to have nesting in Business only or in Economy only. Below we will be working with the Category nesting setup in the inventory template. Suppose we have a 50 seats aircraft with one compartment Economy (as discussed above, Business would not have impact on nesting in Economy, that is why we are not looking at two compartment flights below).

4.1 Case 0 - No nesting Suppose we have five RBDs – YBKXZ, Y being the highest. All of them are independent. Therefore, the protection level is equal for seat assigned for each of them. Protection level seats assigned

Y 6 6

B 14 14

K 10 10

X 15 15

Z 5 5

All the 50 seats are distributed between five RBDs. If not all seats are booked in any RBD, those are not transferred and not made available for other RBDs. Example of Z RBD set-up in the inventory template is provided below.

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All the other RBDs are set up exactly the same way.

It should be, however, noticed that the set-up above is only possible if all RBDs are availablе to all booking agents. Otherwise, if you for example only allow some agents to book in K, and they do not fully utilize it, then the remaining capacity remains unsold on departure. Therefore, more common approach is to open all 100 percent of seats in the highest price RBD (in our example – in Y). So if some seats in other RBDs remain not taken, it would always be possible to book a seat in the RBD Y, which would be available to as many agents as possible until there is at least one free seat in the flight. In our further guidelines, we will use an assumption that Y should always be 100 percent open. Therefore, the Y RBD configuration in the inventory template would look the following way.

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It should be noticed that even though all RBDs are independent, still if the amount of Bkd in Y is more than 6 (let us say 9), while total protected for all other RBDs remains 44, then remaining availability 44 – (50 -9) =3 would be used by the other RBDs on first come – first served basis. Inventory manager view

4.2 Case 1 - Simple serial nesting Suppose we have five RBDs – YBKXZ, Y being the highest. All of them should be nested. In the example we are using the following protection levels: Protection level seats assigned

Y 6 50

B 14 44

K 10 30

X 15 20

Z 5 5

For the setup we are using “seats assigned” value. On a RBD level, we use the following configuration:

Above we have a configuration for the lowest RBD in the nesting – Z. The RBD should be active and it should be allowed to make reservations in it. Max space should

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always be set to real, the threshold should be set to Category (which means that nesting is taking to the account only one compartment’s reservations). Maximum space and max should contain the accumulated protection levels or the seat assigned (from the table above). Since Z is the lowest RBD in the nesting, so the accumulated protection level is equal to Seat assigned value.

The set-up above may be read as: Open RBD Z for booking as soon as there are 0 bkd in all RBDs of the compartment, and then close RBD Z for booking as soon as you have 5 seats bkd in RBD Z or you have 5 RBD booked in all RBDs of the compartment, whichever happens first. Typically when we use nesting we should not put additional restrictions on the open and close time, meaning that there is no special instruction to the system to open or close Z RBD at some time before departure.

However, if the time restriction is used (as in the example below),

then the nesting set-up will be defined as follows. Open RBD Z for booking as soon as there are 0 bkd in all RBDs of the compartment, and then close RBD Z for booking as soon as you have 5 seats bkd in RBD Z or you have 5 RBD booked in all RBDs of the compartment, whichever happens first, (but in any case close it latest at 7 days before departure). The extra condition added means that even if less than 5 seats are booked in all RBDs at 7 days before departure, then RBD Z would be closed, and the X RBD will become the lowest RBD available. The next RBDs’ (X,B,K) set-up would be similar to Z.

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It should be noticed that for Y which is the highest RBD in Economy there is a different set-up as follows below.

The highest RBD in the compartment (this case Y) is always set to have full availability (100 percent, max space percentage, threshold disable). Since it is set to 100 percent, so any booking done in any other RBD will reduce Y availability automatically without nesting. However, a booking done in Y will reduce the availability of all the other RBDs in nesting. The overall picture of the set-up of the RBDs in the inventory template looks as below.

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Inventory manager view

In the example above RBD Z is closed, since there are more than 5 seats booked in the flight; RBD K has an availability of 23 seats since there are 7 seats booked in the flight (30-7=23).

4.3 Case 2 - Serial nesting and independent RBD(s) which has effect on nesting

Suppose we have five RBDs – YBKXZ, Y being the highest, Z being independent. YBKX should be nested, but also take into account Z In this example we are using the following protection levels: Nesting protection level seats assigned Y 6 50 B 14 44 K 10 30 X 20 20 Z 5 5 The major difference from the case 1 is that we keep Z out of nesting, so reservations made in any other booking class do not steal availability from Z 5. In other words, Z would stay available until the last seat on the flight is booked (as long as there are no more than 5 bkgs in Z). On the other hand, any reservation done in Z will reduce availability from all the other RBDs in the flight. It should also be noticed that with this set-up it may happen that no reservations will come to Z at all – then there would be no difference from case 1, except that the missing 5 bookings would come to RBD X. From the configuration point of view, we have a different set-up for Z which is now independent.

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The other RBDs set-up would stay exactly the same as in case one since

- We have not changed Seat assigned (Maximum space and Max) for any of them

- We have not changed the list of RBDs which have impact on their availability (YBKXZ RBDs continue

to have impact on availability of any of YBKX RBDs)

The general view of the template for the case 2 is provided below.

Inventory manager view

In the example above, Z is an independent RBD, so its availability is only determined by its own bookings (3=5-2) while RBD X has 13 seats available since all 7 bkd seats on the flight (including in Z) are counted for it (13=20-7).

4.4 Case 3 - Serial nesting and independent RBD which does not have effect on nesting

Suppose we have five RBDs – YBKXZ, Y being the highest, Z being independent. YBKX should be nested and be independent from Z In this example, we are using the following protection levels: Nesting protection level seats assigned

Y 6 50

B 14 39

K 10 25

X 15 15

Z - 5

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If we compare the case 3 with the case 2, then from the first look it seems to be quite different since the seat assigned number for XKB has been reduced. However, in reality the only difference between two configurations is that in case if no reservations (or less than 5) are done in Z – the missing bookings would get to Y (which is the highest RBD in nesting) and not to X (which is the lowest RBD in nesting). If we look at the configuration of RBDs, compared to case 2, then Y and Z set-up remain the same (Z remains independent with 5 seats, and Y has full capacity, no nesting both)

In the same way, YBKX are introduced to the nesting string of RBD B and 39 is placed into maximum space and max fields. Notice that RBDs to the nesting string can be inserted in any order, the order does not affect anything. It is important that you only add RBDs which are present in the template. Do not insert any separators like “,” or “;” etc. The general view for the case 3 configuration is provided below.

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Inventory manager view

In the example above, X has 15 seats available since the total number of seats booked in YBKX is only five (15=20-5).

4.5 Cabin type nesting Cabin type nesting means that you take into account reservations done in all compartments on the flight. For cabin type nesting there is no possibility to defined the RBDs defined in nesting. It means that bookings done in all RBDs in all compartments on the flight will be taken into consideration to determine the availability of a RBD for which the nesting is acivated. The example of using the cabin nesting might be a situation where you have two compartments, but you are willing to be very flexible by shifting seats from economy to business on every flight in the inventory manager without changing the aircraft version in the schedule manager. In the inventory template, for each RBD you need to change the Threshold to Cabin. It means that the availability of this RBD will be reduced taking into account all reservations done on this flight for all compartments.

Please notice that Max space is real should always be set to true when you use Threshold = Cabin. Also the Maximum space must be equal to Max, otherwise, the RBD will be closed too early or too late. Please notice that changes done in the inventory template will only be applied after you recreate inventory in the invenotry manager.

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You can also enable a cabin type nesting just on one specific flight. Alternatively, you would need to make the changes on flight level anyway if you decide to increase or decrease amount on sale (availability) for a RBD. For that, first of all you need to set the Min/Max rule to Cabin type

After that, Min booked and Max booked values are possible to edit.

Min boked should in all cases be set to 0 adn Max booked should be equal to Max amount

Example of cabin nesting provided below:

In the picture, we have an aircraft with the total capacity of 105 seats. There we allow the passengers to book as many seats in the business class as they want (so no fixed amount) on a first come – first served basis. Each booking in Economy is deducting availability from Business and the other way around. Cabin type nesting is currently in implementation and not yet supported. The cabin nesting is now working as the category nesting with no specific RBD defined (in other words, it takes into calculation only reservations done in all RBDs of the same compartment where the RBD is). Therefore the instruciton is not complete. When the development is finished, this article will be adjusted, providing the examples of calculation and the set-up guidlines.

5 Adjustments in the settings of the nested RBDs in the inventory manager

For individual flights adjustments must be made in the inventory manager. In the examples below, we will be looking at a simple nesting case with all five RBDs nested. The filigh will already have some bookings done in few RBDs, so that we could see

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how the remaining availability will be affected by the changes in the number of seats assigned. Any ajustments to the nested RBDs‘ availability should be synchronously made to Max and Max booked columns‘ values.

5.1 Shifting availability from the highest RBD in the nesting string Suppose we want to increase availability in Z by 2 seats, while all the other protection levels should stay the same (except the RBD which is the highest in hte nesting). In such case, we increase both Max booked and Max amount for all RBDs in the nesting, except the highest RBD (Y)

Before the adjustment, after 3 seats are booked in Z, the remaining availability in X,K,B,Y would be 10,20,30 ,40 (and protection levels – 10,10,10,10). After the adjustment, after 5 seats are booked in Z, the remaining availability in X,K,B,Y would be 10,20,30 ,38 (and protection levels – 10,10,10,8). Hence, the change resulted in availability shift from Y to Z.

5.2 Stealing availability from the next RBD in the nesting string Suppose we want to increase availability in Z by 2 seats, while X should be decreased by two and all the other protection levels should stay the same. In such case we only need to increase the Max and Max booked amount for Z.

Before the adjustment, after 3 seats are booked in Z, the remaining availability in X,K,B,Y would be 10,20,30 ,40 (and protection levels – 10,10,10,10). After the adjustment, after 5 seats are booked in Z, the remaining availability in X,K,B,Y would be 8,18,28 ,38 (and protection levels – 8,10,10,10). Hence, the change resulted in availability shift from Z to X.

5.3 Closing the lowest available RBD in the nesting string Suppose we want close the lowest available RBD Z. In the most simple case, we might be willing to push its availability one step up to X. Then all we need to do is to close sales in Z.

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Visually, availability of the other RBDs has not changed. However, if before the change we could have booked 3 seats in Z and 10 in X, then now we can book all 13 seats in X only, which means that the price have been increased from Z to X, and 3 seats where moved one step up. Meanwhile, all the other RBD‘s availability has not changed at all.