Offers & Orders is not a new topic within the wider travel industry; but it is an entirely new method of selling products that enables airlines to create and distribute personalised offers to travellers. It’s not surprising that new methods and old habits don’t cohabitate well. As a result of this mismatch the customer experience today is deeply affected by legacy standards, processes, and technology. Airlines in the past have struggled to create and manage the attractiveness of offers, whilst delivering on efficient orders, in addition to keeping the customer at the centre of it all. Some may view Offers and Orders as a challenge to bridge the old and the new and the end customer simply having to deal with the result. The opposite is true however, and instead of the customer being an inconvenient truth, it could be the solution to the very problem.
As an industry, many commentators have been quick to dismiss how imminent such a switch to one single order across the journey is, but research suggests that we are closer than we think. According to Datalex’s research findings outlined in ‘The Digital Airline 2023’, over 9 in 10 (92%) of airlines believe their underlying PSS system is significantly or somewhat hampering the simplification of order management and ease of booking, suggesting that this is a significant headache for airline executives. In addition to this, 60% of airlines surveyed intend to move away from their current PSS provider towards an Offers & Orders enabled technology platform in the next 1-2 years. With just 1% of airlines planning this in the next 5 years or more, and only 8% stating that their PSS does not hamper them at all, it is clear from the majority that they have reason to start this transition sooner rather than later.
By moving to a unified Offers & Orders future, airlines can take back control of what they sell, merchandise and manage in a personalised way. But equally, customer-centricity is crucial for the long-term success in the next phase of airline retailing and should be acknowledged as such. A recent survey by McKinsey indicates the true value of a customer-centric approach, with $40 billion annual value creation opportunity available to airlines.
If airlines chose to ignore this transition, they will be left behind. In order to remain competitive and to future-proof their position in market, airlines must be cognisant of the inevitable move to Offers & Orders. Datalex has cautioned airlines by stating that “the cost of doing nothing cannot be underestimated”, as voiced to by Conor O’Sullivan, Chief Product Officer, when speaking to the course of the transition to Offers & Orders. Not moving may result in losing any competitive edge you had, because while your airline may have a fabulous onboard experience or relatively accessible digital experience by today’s standards, your future customers won’t buy it if you don’t engage them in an advanced digital way.
The moment of truth comes when you stop investing in the past and start investing in the future, and this is true for technology and people. If an airline continues on their current trajectory, they are sustaining costly and outdated systems with less and less people available to attract to work on these systems. This may not be true today but will be true as soon as the transition starts, and the airline will be left behind. While there will be undeniable upfront costs for the transition to take place, the cost of not starting will be much more.
Partners like Datalex are ready for the future with standalone Offer & Order Management but recognises that airlines will exist in a parallel universe in the transition state. We support this, via connection to legacy systems as needed, but there is still huge value to be had in the transition state. AI-based pricing for example can be implemented to reflect real-time price optimisation, fulfilled as a price adjustment if required to conform to existing downstream processes awaiting transformation. Once the initial transition begins, your airline’s roadmap will evolve in the coming years, there is no “end-state”, just a future vision that will be continually optimised.
Article by Datalex
At Datalex, we are committed to delivering against its vision for Offers & Orders and has a clear transition path across all phases from initial optimisations for Modern Retailing towards 100% Offers & Orders. To learn more about how airlines can go back to first principles and accelerate value creation through customer-centric modern airline retailing for an Offers & Orders future, download Datalex’s Offers & Orders whitepaper. In addition, visit the Datalex team at booth at World Aviation Festival on 26-28th September in Lisbon to find out more about our progressive airline digital retailing work. Datalex’s Chief Revenue Officer, Bryan Porter, will also be on-stage discussing the steps required to deliver a better and more personalised customer experience through NDC – a key part of the journey to 100% Offers and Orders.
Also in the news:
Using AI to Boost NDC Adoption Across the Aviation Industry
The Future is Calling: Top value drivers to gradually kickstart your airline’s transition to Offers & Orders today
American Airlines’ NDC transition and the distribution evolution
The Third Horizon of Opportunity – High-Performance Retailing