trip gain

O&D (Origin and Destination)

What is O&D (Origin and Destination)?

O&D, or Origin and Destination, is a key concept in travel management and airline pricing that defines the full journey a passenger takes from their departure point to their final arrival location. It focuses on the overall trip rather than individual flight segments.

For example, a trip from New York (JFK) to London (LHR) with a layover in Paris (CDG) would be considered one O&D itinerary (JFK-LHR) rather than two separate flights. Airlines use O&D revenue management to set prices dynamically, ensuring profitability while balancing supply and demand.

In corporate travel, O&D analysis helps businesses optimize travel policies, negotiate better fares, and reduce costs by identifying frequently traveled routes and adjusting booking strategies accordingly.

Examples of O&D in Travel
1.
Business Travel Route Analysis
A company reviews O&D data to determine that most employees fly from Chicago to Tokyo, helping negotiate better rates with airlines.
2.
Optimized Flight Pricing
An airline offers dynamic fares based on O&D traffic, making a direct New York to London flight more expensive than one with a layover.
3.
Travel Policy Enforcement
A travel manager ensures that employees book O&D-based lowest logical fares to control corporate travel expenses.
Frequently Asked Questions About O&D (Origin and Destination)
1.
How is O&D different from a flight segment?
A flight segment is one leg of a journey, while O&D represents the full trip, including all segments between the start and endpoint.
2.
Why do airlines use O&D pricing?
O&D pricing helps airlines maximize revenue by adjusting fares based on total journey demand rather than individual flight legs
3.
How can businesses benefit from O&D analysis?
Companies use O&D data to negotiate lower corporate travel rates, identify cost-saving opportunities, and optimize travel routes.
4.
Can O&D impact how travel policies are created?
Yes, corporate travel policies often prioritize O&D-based lowest logical fares to balance cost savings with traveler convenience.
5.
Do travel management companies (TMCs) use O&D data?
Yes, TMCs analyze O&D trends to offer better itinerary recommendations and ensure compliance with corporate travel policies.