Singapore Airlines will invest more than AU$21 million in advanced technology and sophisticated forecasting techniques to manage the allocation of airline seats more effectively.
The price tag covers both software and hardware.
The new system, dubbed Krismax II, is being developed by PROS Revenue Management, an airline consulting and systems development company based in Houston, Texas.
Singapore Airlines says the new system should better match supply with demand, ensuring each market is allocated an appropriate number of seats, especially when the traffic mix and seasonal travel requirements are factored in.
"Ultimately, we want to minimise seat wastage", said Singapore Airlines' Senior Vice-President (Marketing Planning) Huang Cheng Eng.
"Once a flight has departed, that seat's revenue cannot be improved. But seats on any given flight can be sold in many different markets. The idea of investing in state-of-the-art technology is to better match supply with demand", Huang said.
Krismax II will help overcome the complexities of matching seat capacity with customer demand. By using PROS' modelling and operational research techniques, it will forecast demand based on historical travel patterns and current booking trends.
The airline is confident this will better satisfy passenger demand for seats.
"Ultimately, the customer will benefit," said Huang.
"At present, we sometimes have to deny customers a seat because the optimum number of seats to different market segments are not always matched. This situation is not unique to SIA - many other major airlines face the same problem."
The company says Krismax II will help prevent situations where customers in one market are wait-listed while seats allocated to other markets remain unsold.
Singapore Airlines expects the incremental revenue earned in the first year alone will easily offset the cost of developing and implementing the new system, which will be operational by 2002.
PROS, a major supplier of revenue management software to the airline industry, has a staff of more than 200 people.
