Cory Garner, Co-CEO, Travel Technology Research, in conversation with Henry Harteveldt, President, Atmosphere Research Group explored the shifting landscape for Airline Technology and Distribution and the far-reaching implications. Using T2RL data and insights to underpin the trends driving change, Cory highlighted the shifts in vendor market shares and dependencies.
A wide-ranging discussion addressed distribution channel shifts, geographic considerations, the impact of the growth in direct channels and leisure for distribution, and especially how a changed risk profile for distribution has enabled even mid-size carriers to pursue more aggressive direct strategies. An in-depth analysis of the accelerated customer relationship with e-commerce and what this means for airlines regarding personalisation and new payment methods
, focused on the opportunity for airlines to adopt new approaches in Revenue Management and Digital Strategy development.
During the webinar Cory and Henry took questions directly from the audience and also covered the controversial issue of Retailing – how can airlines retail effectively in indirect channels? For carriers with a varied product structure, it is critical for airlines to invest effort in understanding the underlying logic used by indirect channels to display products. How can airlines provide customers with a cleaner, curated, more logical display? If airlines and travel agencies were to align economic and customer segment strategies, would this help?
The demand curve has changed, travel patterns have changed, booking patterns have changed, as airlines look to the future, Henry shared insights from Atmosphere’s traveller research on how airlines can approach more effective personalisation strategies, to retain those direct customers shifted in the tussle with OTAs during the pandemic. Can airlines become Super Brands? Offering great fares and becoming a gateway to other products and services required for a trip, would help deliver this and a starting point is for airlines to consider themselves travel companies, integrating ancillaries smoothly.
A key topic at the forefront of the industry – continuous pricing – was emphasised by Cory as a trend to watch closely, as a potential long-term project to smooth pricing along the demand curve. Although the jury is still out, whether it can deliver more up-sell or more share, carriers are getting systems implemented ready for use. Massive amounts of data need to be processed to develop continuous pricing, so implementation is not quick, especially when the competition may have first move advantage. It definitely should not be ignored on the basis that it is too difficult.
The session closed out with an evaluation of the types of Airline-GDS commercials, value-based structure vs a 3-layer cake structure of agency channel choice aligned to content commitment, where NDC can play a significant role in creating customer choice in the right channel.