How LATAM Airlines Embraced Business Experimentation for Revenue Management

Innovation is often associated with big tech companies, where a fast-moving, high-risk approach is common. However, many of their initiatives are reported to have a positive impact only a third of the time. In the aviation industry, where precision and reliability are paramount, such an approach just won’t fly.

LATAM Airlines sought a structured and reliable way to test new initiatives while minimising risk in a highly competitive environment. After identifying several use cases for experimentation (XP) across various business functions, the company focused on revenue management—a critical area where risks are high, and errors can be costly.

1. Adapting XP Methodology – Traditional A/B testing used in the digital space does not translate effectively to airline revenue management.
2. Managing Complexity and Interference – The airline had to navigate complex interference effects.
3. Handling Uncertainty – The dynamic and interconnected nature of the business made it difficult to measure any impact with confidence.
4. Measuring Subtle Uplifts – Sophisticated experimentation techniques were required to distinguish meaningful improvements from background noise when detecting small differences in the key metrics.

LATAM Airlines partnered with ADC Consulting (previously acmetric) for our unique expertise in using battle-tested statistical methodology, similar to those used by big tech companies to determine the success of their initiatives. Together, we built a centre of excellence and an experimentation platform. This platform has several use cases for revenue management, including measurement of pricing strategies for both tickets and ancillary services with precision and confidence.

• Streamlined Experimentation Workflow – A unified XP process allows for clear and efficient communication of outcomes.
• Faster, Conclusive Insights – Reduced time required to obtain meaningful experimental results.
• Improved Accuracy and Confidence – Enhanced measurement capabilities foster a culture of increasingly sophisticated experimentation.
• Evidence Based Decision-Making – Integrated scientific methodologies help navigate the complexities of the airline business.

The experimentation platform can be expanded into other business areas, including customer experience, loyalty programmes, and maintenance operations.

If you would like to learn more about this report or similar projects we have worked on in the transportation sector, please contact Vladimir Antsibor (Head of Business Development).