«Price corridors» to find a balance between marginality and market opportunities
The company is the largest aviation fuel supplier in the region. The company is present at 210 airports in 66 countries. Customers - about 200 airlines.
Goals and objectives of the project
  • The company needed an analytical system to help price jet fuel based on cost and market conditions.

    The price of jet fuel at each airport depends on a number of factors.
    The price is not only influenced by the cost per barrel on the exchange. The price also depends on the cost of delivery, which is determined by the distance from the airport to the processing or distribution center. The price is influenced by the storage facilities at each airport and the cost of storing jet fuel.

    These and other factors determine the pricing policy of all market players. As a result, the cost of jet fuel is formed in a complex way. At the same time, the price of error is very high. Low cost leads to lower profitability, and high cost leads to a loss of market share.

    Each airport must therefore find the right balance between profitability and sales volume.
Selected Solution
  • A special decision support tool has been developed to facilitate pricing. It is called «Price Corridors» and is an information panel with a graphical representation of the minimum and maximum prices at any given time for each of the airports where the company is present.

    The lower limit is based on cost estimates for the company and its competitors. It takes into account the stock exchange price, the cost of delivery to the airport, storage and other factors. This range shows what the minimum price can be at each airport.

    The upper end of the range reflects a price forecast based on historical jet fuel prices and competitors' expected margins.

    The dashboard helps to adjust prices for each airport according to current priorities and market conditions. By looking back at actual prices within the price ranges, top managers can see what the optimal prices were in the past.
The Results
  • The dashboard allows to avoid mistakes in pricing, and provides a retrospective look at previous decisions to assess their quality.

    The solution helps to adjust prices for each airport according to current priorities and market situation.
Sources and tech stack
  • Qlik View, internal and external sources (e.g., oil exchanges, Platts)
Functional areas
  • Marketing