What to expect at Aviation Festival Asia with Aurore Duhamel 

What to expect at Aviation Festival Asia with Aurore Duhamel 

What to expect at Aviation Festival Asia with Aurore Duhamel

 

Aurore Duhamel works on digital innovation in a large airline and is a Community Manager of French Tech Blockchain (FT Blockchain). As a digital business leader with extensive experience in crypto payments, blockchain, NFTs, Web3 strategy, and aviation Aurore is well positioned to contribute to the discourse on digital payment ecosystems at Aviation Festival Asia.

On day two of the event, Aurore will be moderating a panel titled ‘How can airlines keep up with fast-paced digital payment trends.’ This panel involves the Head of Payment Facilitation Solutions at IATA, the Chief FinTech Officer at AirAsia, the Payment Strategist at Singapore Airlines, the Global Head of Travel & Airlines, Digital Commerce at Worldline, and the Director, Airlines at Mastercard. Aurore will facilitate the discussion exploring topics including FinTech capabilities and the importance of creative payment partnerships.

Listen to the five minute audio interview to hear Aurore’s take on why the APAC region is so exciting, what key trends to look out for at Aviation Festival Asia, and what to expect from the digital payment trend panel.

 

 


Article by Jess Brownlow

 

Four start-ups to look out for at Aviation Festival Asia: Payments 

Four start-ups to look out for at Aviation Festival Asia: Payments 

Four start-ups to look out for at Aviation Festival Asia: Payments

 

Aviation Festival Asia gathers together industry giants, start-ups, and everyone in between to drive innovation in the aviation industry. The event is an opportunity for start-ups to get noticed and for influential industry players to forge business partnerships in the Asia Region.

With new technologies, shifting demands from customers, and pressure points highlighted by the pandemic the payments landscape is changing. These four start-ups each approach the broad topic of payments from a different perspective, addressing payment management, payment options, refunds, and more with a new and innovative outlook.

 

1. Aeropaye

Aeropaye is developing an autonomous smart flight refund engine for airlines, travel agents, travel management companies and passengers on delayed or cancelled flights, integrating Blockchain distributed ledger technology, smart contract components and the IATA direct connect New Distribution Capability (NDC) protocol. We compete in the growing airline ticketing industry valued at $776.9 billion.
Airline tickets are stuck in a technological bottleneck. Coordinating purchases, transfers, settlements on delayed and canceled flights and payments across hundreds of airlines, agencies, and countries is expensive and inefficient under the current system.
The Aeropaye DLT component is an amazing technology that allows for easy, near instant, trustless collaboration between different parties with a common goal. These difficulties of the travel industry is the perfect environment to apply it in. Aeropaye travel tickets smart tokens have immediate benefits like fast transactions, instant settlements, and more efficient collaboration between all the parties.

 

 

2. Happy Fly Limited

Happy Fly Limited (HFL) is an Insurtech MGA based in London offering unique insurance and technology solutions to Airlines to mitigate the financial and administrative burdens of EU261 Flight Delay Compensation exposures.
HFL has developed flexible and innovative insurance solutions designed to mitigate an Airline’s financial exposure to their current, future and historic EU261 compensation liabilities and cap EU261 to a single predictable cost.
In addition, HFLs unique Payments+ secure cloud-based claims portal autonomously manages, validates, and verifies passenger EU261 claims as well as paying compensation to passengers anywhere in the world.
HFL feel that they are well positioned to assist Airlines in the Post-Covid environment, where Airlines are under pressure to restructure into leaner more efficient and cost-effective operating models. The solutions HFL can deliver to Airlines will reduce liabilities to increase borrowing potential as well as providing financial certainty and balance sheet protection, which together with HFLs Payments+ Claims Portal, will be a paradigm shift in customer service and deliver significant cost savings to Airlines worldwide.

 

3. SeatCash

SeatCash is an innovative travel lifestyle technology company delivering an improved travel purchase and management experience to consumers and travel suppliers.  Bringing 100+ years of combined travel industry experience, the SeatCash team is using technology to disrupt the frustrations of today’s travel environment utilizing the latest in predictive sciences, AutoML, and FinTech innovation.

 

4. Wowpay

Wowpay Pte Ltd is a payment orchestration service provider which enables customers to manage multiple payment gateways and processors across the globe through a single API. Wowpay’s proprietary rules-based engine has been proven to help airlines save costs in managing their payment stack by reducing the time it takes for multiple payment methods to be integrated and channelling payments to the lowest cost processor.
All this can be done by little to no-code on Wowpay’s dashboard. Wowpay can handle not just payment processing but also fraud detection and management settings. Back by a team of experienced travel technologists, Wowpay understands the challenges faced and value demanded by airlines.

 

These four start ups will be at Aviation Festival Asia next month. To see how these and many other start-ups can enhance passenger experience, get your ticket here.

 

We haven’t mentioned Blockchain, for quite some time.

We haven’t mentioned Blockchain, for quite some time.

We haven’t mentioned Blockchain, for quite some time.

 

We at Travel in Motion have already published numerous blogs, white papers, and podcasts about, hopefully, relevant subjects in our industry. But until now we have only once discussed blockchain and this was quite some time, ago. Are we missing out on something? Or are we “clever” enough to know that blockchain is simply a buzzword and will disappear like many others that were once hype and are now out of sight, out of mind? I think it is a case of “neither one nor the other”. As many others, we have mixed feelings about the relevance of blockchain technology in commercial airline IT. Thus, we are simply not yet confident enough to take a definitive position.

Maybe it would be helpful to summarize what blockchain technology really is and where it makes (or could make) the difference in comparison to “traditional” systems, such as databases. For me a good, but non-scientific start to get a high-level understanding of a new topic has often been Wikipedia, which describes blockchain as:

“A distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (…). The timestamp proves that the transaction data existed when the block was created. Since each block contains information about the previous block, they effectively form a chain (…), with each additional block linking to the ones before it. Consequently, blockchain transactions are irreversible in that, once they are recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.”

Comparing blockchain technology with traditional database technology shows that it delivers advantages. IBM provides an informative and easy-to-read summary on their website, which I have used for this blog:

  • Enhanced security: as the records are distributed over numerous entities with an end-to-end encryption, fraud-like manipulation of data and other unauthorized activities are simply not possible.
  • Greater transparency: as a blockchain uses a distributed ledger, all data and transactions are recorded identically in multiple locations. Thus, all participants see the same information at the same time, leading to transparency.
  • Instant traceability: through blockchain the provenance of data is documented and can be audited.
  • Increased efficiency and speed: compared to traditional paper-heavy and manual processes blockchain technology can lead to faster and more efficient execution.
  • Automation: through “smart contracts”, transactions are automated when pre-defined conditions are met. Smart contracts are programs stored on a blockchain that run when predetermined conditions are met.

As I am not a computer scientist, I am still not 100% sure if I understood all the above, but it has at least given me a view of where blockchain technology may provide advantages over traditional database technology. In a traditional database setup, data is stored in tables and can be modified any time. Blockchain is more secure, more or less immune to fraud, transparent and does not require a centralized third party to secure the system. Through this, blockchain as a technology creates confidentiality and trust without being managed centrally.

The probably best-known use of blockchain technology is cryptocurrencies. I must admit that the volatility of values, stored in and managed through cryptocurrencies does not impress me – it even makes me suspicious. But cryptocurrency is just an application that uses blockchain technology and it is probably the best proof point that the underlying blockchain technology really works.

So, what does this mean for commercial airline IT systems? Our ecosystem can also be characterized as an environment where participants are globally distributed, representing different interests with a need to cooperate, and where values are shifted through digitalized channels, requiring the highest security and traceability. Doesn’t this ring a bell? Aren’t these the characteristics that also describe the advantages of blockchain technology? Blockchain is exactly a technology that meets the requirements described above. The issue is only that these requirements already existed long before blockchain became available – and not only that, also these requirements have already been solved long before blockchain appeared on our radar screens. So, is blockchain a wonderful technology that addresses issues which have already been solved in our industry? I think there is an element of truth in this. Replacing legacy technology and processes for the sake of using modern technologies has always been a big challenge and an issue in our industry. Or in other words, while blockchain promises a lot and has also proven to deliver what it promises from a technological standpoint, what are the potential areas of use in our industry? What are the killer use cases for blockchain technology in commercial airline IT? In settlement process? Or distribution perhaps? Or perhaps even a combination of NDC; offer and order management together with blockchain – doesn’t this sound more like a nightmare to some of us?

But as of today, most of us still feel that blockchain is a technology that is rising and becoming more mainstream, but we do not yet know how it will be utilized and what impact it will have. Therefore, I come back to the point mentioned earlier in this blog. We at Travel in Motion are not yet confident enough to take a definitive position. This time we need your help: how do you see blockchain in commercial airline IT? Where do you see a value add? Where do you see use cases? We are looking forward to receiving your thoughts!

 


Article by Boris Padovan, Travel in Motion GmbH

 

Qatar Airways’ innovative world first loyalty initiative 

Qatar Airways’ innovative world first loyalty initiative 

Qatar Airways’ innovative world first loyalty initiative

 

Yesterday (24 January), Qatar Airways Privilege Club (QRPC) and Qatar Duty Free launched a ‘world first’ innovative partnership. Now, members of the QRPC will be able to collect and use Avios as a part payment option across almost 200 outlets at Hamad international Airport (HIA).

As the airline’s reward currency, Avios can now be used as payment across retail brands as well as food and beverage outlets at Doha’s Hamad International Airport (DOH). Working in tandem with this, Qatar Airways will also reward passengers at all departure points with Avios points upon check in. These will be credited up to 120 minutes before flight departure.

Qatar Airways Group Chief Executive, Mr Akbar Al Baker said:

“We have enhanced and upgraded our redemption options for our loyalty members and we are enabling access to a truly unique airport shopping and dining experience. A first the world initiative, this demonstrates our commitment for going the extra mile when enhancing the quality of our offerings by providing members with a  seamless experience. We encourage everyone travelling through HIA to avail themselves of this experience and opportunity as there has never been an easier way to collect and spend Avios.”

Avios can be collected when members fly with Qatar Airways, oneworld airlines, or QR’s airline partners. They can also be collected with more than 100 global partners and co-branded payment cards.

The new partnership encourages engagement with the airline’s loyalty programme. It provides a strong and convenient incentive for passengers to sign up to Privilege Club, leveraging the airline’s fortunate position as interconnected with the airport and duty-free company.

Mr Akhar Al Baker, CEO Qatar Airways will be speaking on a Keynote CEO panel at Aviation Festival Asia exploring future technologies and trends that we can expect to see emerge in the retail, loyalty, and customer experience space.

 


Article by Jess Brownlow

 

Vueling to become the first LCC in Europe to accept NFTs as payment alternative

Vueling to become the first LCC in Europe to accept NFTs as payment alternative

Vueling to become the first LCC in Europe to accept NFTs as payment alternative

 

Last week, Spanish low-cost airline Vueling and cryptocurrency buying and selling platform Criptan announced their partnership. The pair are working together to enable Vueling to accept NFTs (non-fungible tokens) as payment.

From the second half of 2023, Vueling will offer passengers the option to purchase flights using NFTs making it “the first low-cost airline in Europe to accept cryptocurrencies as a payment alternative.”

Elaborating on the partnership, Jesús Monzó, Vueling’s distribution and alliances manager said:

“This agreement places us at the forefront of new technologies and innovation, further strengthening our commitment to our customers and offering the best and most advanced tools and solutions on our website.”

Jorge Soriano, CEO of Criptan emphasised Vueling’s commitment to forward thinking:

“Vueling is proving to be a leader in all that relates to innovation. This is a clear move that demonstrates the potential behind the crypto and Web3 ecosystem and that goes far beyond speculation […] We are convinced that we can improve the user experience, not only through payments in crypto but by bringing the advantages of this ecosystem in the most useful and simple way possible.”

Vueling is not the first to pioneer the overlap between cryptocurrencies and the field of aviation. In 2014, Air Baltic became the first airline in the world to accept bitcoin, closely followed by LOT Polish Airlines in 2015. Last year, the world’s first collectible NFTicket was sold for over $1 million for an Air Europa business class ticket from Madrid to Miami.

For more content looking at NFTs and the metaverse see How Is The Metaverse Being Used In Aviation?

At Aviation Festival Asia a CIO Panel will discuss how airlines in Asia are prioritising investments in a conversation that will cover emerging tech including NFTs and the Metaverse.

 


Article by Jess Brownlow

 

Mastercard and Sabre’s Conferma Pay partner on virtual cards

Mastercard and Sabre’s Conferma Pay partner on virtual cards

Mastercard and Sabre’s Conferma Pay partner on virtual cards

 

On 28 November, it was announced that Mastercard is partnering with Sabre Corporation’s Conferma Pay on virtual cards for the travel economy.

Back in August 2022, Sabre acquired Conferma Pay to advance virtual card payments in the travel industry. Sabre Corporation is a leading software and tech provider powering the global travel industry. The recently acquired Conferma Pay is a leading UK-based FinTech company and a pioneer in virtual card technology.

In big news for the payments industry, Sabre’s Conferma Pay will now partner with the global pioneer in payment innovation, Mastercard. The partnership will include a minority investment in Conferma Pay by Mastercard.

Discussing the partnership, Roshan Mendis, Executive Vice President and Chief Commercial Officer, Sabre Travel Solutions said:

“Companies in the travel space […] need sophisticated solutions and seamless connections. Sabre is taking strategic steps to fulfil the needs of our industry, beginning with the acquisition of Conferma Pay. Now, the new partnership with Mastercard will help Conferma Pay to build new and enhanced digital capabilities in virtual cards, transforming the payment experience for issuers.”

Virtual cards have huge potential for the entire payments industry but hold a particular value for business payments in the travel industry. Sabre reported that the digitisation of travel payments with virtual cards helps address the historic challenges associated with B2B leisure and corporate travel payments. The securely generated, single use card numbers provide a link between booking and associated payments to third party suppliers. Travel buyers and supplier are therefore able to easily track and reconcile payments, as well ad benefit from flexible pricing, finance options, and enhanced security through card payment guarantees.

Explaining the prospects for virtual cards, Chris Fendley, Executive Vice President, Enterprise Partnerships at Mastercard said:

“A combination of experience, technologies and capabilities will accelerate travel payment innovation and drive inclusive and sustainable growth for the sector. Virtual cards deliver visibility, boost liquidity and increase control over B2B payment flows, which enhance payment strategies and empower organizations across the travel value chain to run, grow and protect their business, which has never been more essential.”

The partnership is an exciting development for travel industry payments.

 


Article by Jess Brownlow

 

Two important BNPL partnerships announced this week

Two important BNPL partnerships announced this week

Two important BNPL partnerships announced this week

 

This week, two significant ‘Buy Now, Pay Later’ (BNPL) partnerships were announced. One between United States (US) based online travel shopping company Expedia and BNPL leader Afterpay. The second is with UK-based Fly Now Pay Later and Worldline integrating the payment tech to their TravelHub. These two partnerships highlight the considerable growth of BNPL in the travel industry. Although more BNPL solutions were already being integrated, current economic hardships are catalysing the roll out of these initiatives. For more detail on BNPL in aviation read here.

 

Expedia Group and Afterpay

On 21 November 2022, Expedia Group “the world’s leading traveller technology platform” announced their partnership with BNPL provider, Afterpay. Now, US-based customers booking flights and hotels will have the option to pay in four interest-free payments over six weeks.

The partnership comes at a time of considerable economic hardship worsened by soaring cost of living prices. These shifts are influencing consumer behaviour. One survey by PYMNTS found that nearly 22 per-cent of consumers are planning to spend less of holiday travel this year.

Announcing the partnership, Alex Fisher, Head of Revenue, North America, Afterpay said:

“As consumers prepare for the peak holiday travel period, we are excited to provide an easy and flexible service that will allow our customers to book and pay in four instalments for their preferred flights and accommodations, interest-free and over time.”

Highlighting the technology in use, Christian Gerron, Senior Vice President Media and Brand Partnerships, Expedia Group said:

“Expedia Group is proud to become Afterpay’s first major US travel partner […] This highlights our ongoing growth in developing cutting-edge traveller technologies that provide our partners with new ways to deliver great experiences to their customers which, in turn, drive customer loyalty.”

 

Worldline and Fly Now Pay Later

On the same day, a partnership between Worldline and Fly Now Pay Later was announced. Worldline is a global leader in secure payments and trusted transactions. Fly Now Pay Later, ‘the travel industry’s leading BNPL provider’ has been integrated into Worldline’s TravelHub. Customers will now have the option to spread the cost of their travel.

Jasper Dykes, CEO and founder Fly Now Pay Later said:

“As a dedicated team of travellers committed to making paying for travel simpler and fairer, we are delighted to announce the partnership with Worldline as a highly respected pioneer in secure payments and trusted Transactions. We’re all about making sure that travel payments work for everyone, so welcome the opportunity to work with merchants to help their customers spread out the cost of a hotel, flight or holiday.”

Guillaume Tournand, Head of Growth, Worldline highlighted the additional benefits for their company:

“Partnering with Fly Now Pay Later has provided us with access to a wealth of travel expertise. As the partner of choice for merchants, banks and acquirers, operating in 50 countries, we pride ourselves on providing a world-class service for those seeking secure payments and trusted transactions when booking their holidays, business trips and more.”

As the cost of living increases around the globe, and travel companies continue to integrate more BNPL options to keep pace with other retail sectors, we can expect to see more BNPL options within the industry.

 


Article by Jess Brownlow

 

HSBC Star Alliance’s world-first Credit Card

HSBC Star Alliance’s world-first Credit Card

HSBC Star Alliance’s world-first Credit Card

 

On 15 November 2022 Star Alliance launched the HSBC Star Alliance Credit Card powered by Ascenda. This is the world’s first airline alliance credit card. It is big news for the industry so here are the who, what, where, and whys.

 

Who is involved?

Star AllianceThe Star Alliance network, established in 1997 was the first truly global airline alliance. It offers the largest and most comprehensive airline network. The member airlines participating in the loyalty programme include: Air Canada, Air New Zealand, EVA Air, Singapore Airlines, South African Airways, THAI, and United Airlines.

AscendaAscenda is a global rewards technology company with a cloud-based loyalty platform. The company ‘deploys reward solutions that enable brands to grow revenue and build deeper customer connections across the entire financial relationship.’

 

What is it?

The card is the first of its kind, bringing together seven of the world’s leading airlines on a single credit card platform. Traditionally, these cards are linked to a singular airline’s reward system. However, the HSBC Star Alliance Credit Card allows customers a choice from multiple airlines with whom they can redeem points for frequent flyer programs.

Importantly for customers, they are able to earn Star Alliance Points on everyday eligible credit card purchases.

Jeffrey Goh, CEO of Star Alliance said:

“Star Alliance is delighted to launch this industry-first loyalty product together with HSBC and Visa. This is very much consistent with a key strategy of Star Alliance which is to offer a loyalty proposition that others talk about.

This unique product is an outcome of strategic discussions with our member airlines for the Australian market. It will offer a new world of loyalty experience with not only the ability to earn points, but also a fast track to Star Alliance Gold Status through everyday spending. Star Alliance Gold Status offers a range of benefits such as lounge access and priority boarding across all Star Alliance member carriers.”

 

Where is the card active?

For now, the card is only available in Australia.

 

Why has this been introduced?

An HSBC Travel and Finance survey found that although Australians are prioritising travel in 2023, they are simultaneously looking to keep travel costs low. The survey revealed 24 per-cent of respondents who intended to travel overseas said they would pay for flights with credit card rewards and points.

The same survey also revealed 96 per-cent of respondents travelling overseas said they would consider tips and tricks to keep travel costs down.

Looking at the results, the Australian market appears primed for the introduction of a credit card which enables them to collect points for flying through every day purchases.

For more articles relating to earning points through everyday spending read ‘Catching a lift, ordering groceries, and now grabbing a coffee. Delta’s loyalty partnerships turning everyday life into miles.

 


Article by Jess Brownlow

 

The technology elevating the retail experience at airports  

The technology elevating the retail experience at airports  

The technology elevating the retail experience at airports

 

As airport retail evolves to keep up with changing consumer demands, technology has acted as a catalyst fuelling the change. One way technology is facilitating a frictionless, futuristic experience of airport retail is through checkout-free stores.

For the customer, the retail process could look like this:

  1. Enter the store by tapping a credit card or scanning a QR code.
  2. Pick the desired products.
  3. Leave.

 

Benefitting the customer

These stores contribute to a contactless customer journey within the airport and provide an enhanced experience of airport retail. Through removing the need to queue, the passenger will be able to enjoy the offerings from the outlet without having to stand in tiresome checkout lines tapping their foot and checking their watch.

 

Benefiting the retailer and the airport

Importantly, while elevating passenger experience, the technology is also beneficial to both the retailer and the airport. Retailers have less work to do and can run with fewer staff and airports keep passengers seamlessly flowing through the airport.

Zippin is a provider of this checkout-free technology. Last month, Dallas Fort Worth (DFW) International Airport opened its first checkout-free store using Zippin’s technology. The technology is already in place in Tom Jobim International Airport in Rio de Janeiro and JFK International Airport in New York.

Krishna Motukuri, CEO and Co-founder, Zippin said:

“Self-checkout simply passes the work of the cashier on to the customer, increasing friction for the customer, which inevitably leads to frustration and errors and MORE work for retailers, in the end. Checkout-free works by removing friction and making retail operations substantially more efficient.”

Zippin is not the only provider of this technology. Amazon’s Just Walk Out technology facilitates a comparably seamless experience for customers. This technology was demonstrated last year at a Hudson Nonstop store at Chicago Midway International Airport.

For more articles on the evolution of retail read Appealing To The New Generation of Passengers Through Omnichannel Retail. 

 


Article by Jess Brownlow

 

Qantas extends its loyalty offering through partnership with Bangkok Airways  

Qantas extends its loyalty offering through partnership with Bangkok Airways  

Qantas extends its loyalty offering through partnership with Bangkok Airways  

 

Bangkok Airways is the latest airline to partner with Qantas. Their collaboration sees Bangkok Airways added to the 45 existing carriers partnered with Qantas for its Frequent Flyer loyalty programme. 

This is the latest evolution of Qantas and Bangkok Airways’ partnership which commenced in 2014 with a codeshare agreement. 

Identifying Thailand as one of their most popular destinations, Qantas has incorporated Bangkok Airways’ 20 destinations into their loyalty offering. These destinations across Thailand and South-East Asia are added to the 1,200 places that Qantas already offers their frequent flyer users through Classic Flight Reward seats.  

Discussing the partnership, Qantas Loyalty CEO Olivia Wirth said:  

“We want our members to be able to use their Qantas Point on reward seats to as many destinations as possible and our portfolio of partner airlines means they can choose from hundreds of locations across the globe. Thailand is one of the most popular destinations for our frequent flyers and this partnership will make it easier for them to explore more of the region using their points.” 

Qantas has partnered with carriers across the globe to create an impressive loyalty rewards programme for their frequent flyers. Airlines already working in partnership with Qantas include:  

  • Air France  
  • Alaska Airlines  
  • American Airlines  
  • British Airways  
  • Cathay Pacific  
  • China Airlines  
  • Emirates  
  • Finnair 
  • Japan Airlines 
  • Jetstar 
  • KLM  
  • LATAM 
  • Malaysia Airlines 
  • Qatar Airways 
  • Royal Air Maroc 
  • Royal Jordanian  
  • SriLankan Airlines  

 


Article by Jess Brownlow

 

IATA survey reports passengers want simplification and convenience

IATA survey reports passengers want simplification and convenience

IATA survey reports passengers want simplification and convenience

 

Surveying over 10,000 people from 222 countries, The International Air Transport Association (IATA) has revealed the results of its 2022 Global Passenger Survey (GPS). The survey shows the top priority for passengers’ travel experience are simplification and convenience.

 

Highlights from the survey

 Technology and convenience:

    • Passengers see value in biometric identification. 75% of passengers want to use biometric data instead of passports and boarding passes. Over a third have already experienced using biometric identification in their travels, with an 88% satisfaction rate. But data protection remains a concern for about half of travelers.
    • Passengers are willing to complete processing elements off-airport. 44% of travelers identified check-in as their top pick for off-airport processing. Immigration procedures were the second most popular “top-pick” at 32%, followed by baggage. And 93% of passengers are interested in a special program for trusted travelers (background checks) to expedite security screening.
    • Passengers are interested in more options for baggage handling. 67% would be interested in home pick-up and delivery and 73% in remote check-in options. 80% of passengers said that would be more likely to check a bag if they could monitor it throughout the journey. And 50% said that they have used or would be interested in using an electronic bag tag.
    • Travelers were satisfied being able to pay with their preferred payment method which was available for 82% of travelers. Having access to planning and booking information in one single place was identified as being top priority.

 

Learning from the online Amazon experience

Discussing the survey, Muhammad Albakri, IATA Senior Vice President Financial Settlement and Distribution Services said:

Today’s travellers expect the same online experience as they get from major retailers like Amazon. Airline retailing is driving the response to these needs. It enables airlines to present their full offer to travellers. And that puts the passenger in control of their travel experience with the ability to choose the travel options that they want with convenient payment options.”

Amazon set the benchmark for unrivalled customer experience. Placing the customer at its heart, the business worked to the vision of, “Earth’s most customer-centric company.” The Amazon Consumer Behaviour Report 2021 echoes the results of the IATA survey, identifying convenience as consumers’ second top priority. Through anticipating customer needs, offering frictionless processes, convenience, low prices, and personalisation, the brand established unparalleled loyalty.

The aviation world can learn a lot from how Amazon has placed the customer experience at the heart of its business. Utilising technology to offer hyper personalisation, an understanding of the individual customer and their needs, frictionless processes, and convenience the aviation industry can drive customer satisfaction.

 


Article by Jess Brownlow

 

 

Three ways selling miles is driving record-breaking growth for airlines

Three ways selling miles is driving record-breaking growth for airlines

Three ways selling miles is driving record-breaking growth for airlines

 

Over the past couple of decades, airline reward programs have made significant strides in shifting their reputation from cost centers to profit engines for their parent companies. As the effectiveness of these programs grew, so did member appetite for points and miles. So much so that loyalty currency retailing—the sale of points and miles directly to members—now ranks as the second largest revenue driver for most loyalty programs globally.

Who knew selling points and miles packed such a punch? Here’s three reasons why mileage retailing is a key factor in building a profitable loyalty program:

 

1. Members who buy miles are more valuable

Members who buy points and miles will go on to fly more and engage more within their program lifetime—taking up to five times more revenue flights over the following 12-month period, and redeeming 6-10 times more points than non-purchasers.1 For cobrand card members, their card spend also increases by 37 percent in the three months post-purchase.

 

2. Mileage sales bolstered airlines and hotels during the pandemic

When travel came to a standstill during the global pandemic, loyalty programs became a crucial touchpoint for airlines to maintain member engagement and brand relevance.

Even without immediate travel plans, members were buying miles, highlighting that mileage sales are more than just a needs-based activity. The desire to travel is an insatiable itch, and members want to have the points and miles they need to travel better, sooner, and with more perks. Data from Points, the world’s leading provider of loyalty solutions, revealed that some loyalty programs even experienced record-breaking points/mileage sales in the height of the pandemic.

 

3. Selling miles speeds up the member earn-burn cycle

Buying miles emboldens members to top up their balances on their own terms—decreasing the time between onboarding and redemption and speeding up the all-important earn-burn cycle which is critical to fostering lifetime loyalty. Highlighting this program utility with a data-led marketing strategy ensures mileage promotions are customized down to a member level in order to nudge them towards the next step of their consumer journey all while maximizing mileage yield.

 


1Aggregated Points data

Article by Points

 

Attracting gen-Z with buy now, pay later

Attracting gen-Z with buy now, pay later

Attracting gen-Z with buy now, pay later

 

Gen-Z sit at the intersection of technology, affordability, flexibility, and travel. This positions them as a generation uniquely suited to buy now, pay later (BNPL) payment options.

BNPL is a rapidly growing area of the industry, with partnerships fuelling uptake. According to GlobalData’s study, the BNPL market size was valued at $141.6 billion in 2021 and is predicted to grow at a compound annual growth rate (CAGR) of 33.3% from 2021-2026. For more details on BNPL in the aviation industry read ‘Flexibility is here to stay’ and ‘Buy now, pay later flights?’ 

BNPL offers a level of flexibility that has demonstrated significant appeal during the current economic condition. In the UK over one third of consumers currently use BNPL, a figure that has been attributed to the recent cost of living crisis. However, there is one generation that utilises these payment options more than the rest.

BNPL appears to be primarily attractive to gen-Z (closely followed by millennials). In the United States, 55.1 per-cent of gen-Z digital buyers use a BNPL service at least once a year, this drops to 48.6 per-cent for millennials, and older generations are significantly lower.

For an industry investing in BNPL fintech and simultaneously trying to appeal to gen-Z, this is important.

How to adapt the aviation industry to appeal to gen-Z has been a huge topic, not least because the generation comes with significant proverbial baggage. Characterised by strong views on the climate, a need for instant gratification, flexibility, and heightened digital expectations, the generation has had industry leaders scratching their heads.

However, one of the solutions could be BNPL.

Gen-Z has been demanding cheap travel. Significantly financially impacted by the pandemic but still keen to fly, this generation is price sensitive and leans towards flexibility when it comes to booking. Moreover, the adoption of BNPL options can help to steer younger travellers’ impressions away from that of some airlines as an unaffordable premium service. Through BNPL, airlines can appeal to gen-Z and even work towards establishing loyalty.

 


Article by Jess Brownlow

 

Catching a Lift, Ordering Groceries, and Now Grabbing a Coffee. Delta’s Loyalty Partnerships Turning Everyday Life Into Miles

Catching a Lift, Ordering Groceries, and Now Grabbing a Coffee. Delta’s Loyalty Partnerships Turning Everyday Life Into Miles

Catching a Lift, Ordering Groceries, and Now Grabbing a Coffee. Delta’s Loyalty Partnerships Turning Everyday Life Into Miles

 

From 12 October, Delta SkyMiles members were able to turn their Starbucks coffees into miles. The partnership between Delta SkyMiles and Starbucks’ Rewards loyalty programs is the latest of Delta’s partnerships to allow customers to earn points through their every day lives.

Prashnat Sharma, Vice President of Loyalty at Delta said:

“We’re continuing to evolve Delta’s SkyMiles program to give our customers valuable, premium experiences not just on the days they travel but in their everyday lives as well. Through this new partnership with Starbucks, we can deliver more moments and interactions that matter, both in the air and on the ground.”

Delta’s SkyMiles boasts approximately 100 million global members whilst Starbucks Rewards has over 27 million US members. For users who are enrolled in both loyalty programs, the accounts can be easily linked after which members will earn one mile per $1 spent of eligible purchases at Starbucks. On days when members have a scheduled flight with Delta they will earn double Stars at participating Starbucks stores.

In addition to the new partnership with Starbucks, other loyalty partnerships that enable Delta members to build points through their every day lives include Lyft and Instacart.

Delta’s longstanding partnership with Lyft has allowed members to gain points from hailing a ride since 2017. Like the Starbucks partnership, double miles can be earnt when going to an airport location.

In February 2022, Delta partnered with Instacart. The leading online grocery platform in the US. Members can link their accounts to earn one mile for every $1 spent with Instacart. At the announcement, Josh Kaehler, Director of SkyMiles Partnerships at Delta said:

“We know most shop for groceries more often than they fly. This new partnership is a way for us to give our most loyal customers even more value outside of their travel journey.”

With significant disruption to flights over the last few years and the daunting challenge of getting gen-Z to commit to a single loyalty programme, giving passengers the opportunity to earn points through everyday transactions is a promising way to build loyalty and one other airlines have also adopted.

 


Article by Jess Brownlow

 

Flexibility is Here to Stay. Amadeus Responds To Demands For BNPL Options With ‘Uplift’ and ‘Fly Now Pay Later’ Integration

Flexibility is Here to Stay. Amadeus Responds To Demands For BNPL Options With ‘Uplift’ and ‘Fly Now Pay Later’ Integration

Flexibility is Here to Stay. Amadeus Responds To Demands For BNPL Options With ‘Uplift’ and ‘Fly Now Pay Later’ Integration

 

The pandemic demanded an extraordinary level of flexibility from the world. As the travel industry returns to pre-pandemic levels, flexibility looks like it’s here to stay.

As travel accommodates for a higher level of uncertainty, change and cancellation fees have been adapted and buy now pay later (BNPL) options are emerging.

This month, Amadeus has announced partnerships with travel specialists Uplift and Fly Now Pay Later to provide a BNPL option on their Xchange Payment Platform. The platform is utilised by hundreds of airlines and travel companies, giving companies the option to easily add BNPL to their sales channels.

 

The growing demand for BNPL

As discussed in a previous article, the aviation industry is becoming more receptive to a BNPL system. The concept itself is by no means new in the retail landscape but the application of this within the travel industry is still in its infancy.

Stephen Quinn, Fly Now Pay Later CCO said “BNPL use by Gen Z in the US grew six-fold over a year […] but Baby Boomer adoption increased even more rapidly, from 1% in 2020 to 18% in 2021.”

Tom Botts, CCO at Uplift echoed this sentiment revealing “over two thirds of Uplift users chose BNPL.”

We are currently in the midst of extremely uncertain economic times. The UK is facing a cost of living crisis and the world is experiencing a global energy crisis. These turbulent times are further fuelling demand for BNPL payment options.

 

Amadeus’ response to demand

Amadeus demonstrated awareness of this growing demand in their recent report. The report showed that 75% of people surveyed were more likely than previously to choose a payment-by-instalment option or BNPL to fund travel.

The BNPL option on the Xchange Payment Platform will give travellers the choice to pay for travel in instalments over six, nine, or twelve months.

Beatrice Bouju, head of partnerships at Amadeus payments described the integration of these systems as a response to demand from travellers, “the message from travellers is clear – they want the choice to pay for the trip in instalments.”

As the aviation industry evolves, flexibility looks set to stay.

The modernisation of payments is a huge part of this year’s World Aviation Festival. One panel will be discussing the question, “How can new opportunities in the space of FinTech and alternative payments address the passenger behaviours and expectations of today?”

 


Article by Jess Brownlow

A customer-focused roadmap to digital airline payments

A customer-focused roadmap to digital airline payments

This is our last article before the World Aviation Festival in Amsterdam in a couple of weeks. We will end the series of articles with a reflection on airline payments, like a shopping experience usually ends with a payment transaction. Bref.

Should airline payments come as an after-thought of a retailing strategy, as a cost of doing business? What is the strategic dimension of payment for travel suppliers? As payment costs have grown bigger now than distribution costs for airlines, is there any new capability that could both enhance the customer experience and reduce costs?

The airline payment topic is closely related to the customer confidence topic and to the retailing topic which we discussed earlier. We also highlighted payments in our White Paper in proposal #6 (vouchers & e-money) and in proposal #16 (customer accounts). So what will digital airline payments look like?

 

A world of credit cards

Credit cards are still the ubiquitous method of payments for travel purchases, both in the leisure and corporate worlds. Notable exceptions, such as payment apps like WeChatPay and AliPay in China, or e-wallets like PayPal in the US or Lydia in France, show what the future of digital will look like.

The concept of linking a bank account to a 16-digit number was revolutionary when it was invented about a century ago… by airlines. Credit cards have improved a lot, for example in the physical card experience with the contactless payment, which became the norm during the pandemic. Mobile wallets, like Apple Pay, add an authentication layer on top of the card and enable contactless payment… without entering a PIN.

In the online world, paying with a credit card stored on a website is relatively seamless (as long as the real-time check on the card mobile app works smoothly). The issue remains when dealing with a new website, entering all the card payment details. The entire payment process, including the authorization, may still result in poor conversation rates.

If credit cards still work well, why change? It is a mix of convenience for customers and cost reduction for merchants (estimated at $20.3bn or 2% of the $1trn sales by McKinsey), with an evolution of technology.

 

The combined effects of Uber, Fintech and the pandemic

In the past few years, the perception of airline payments evolved from tactical considerations (credit cards work well, why bother?) to strategic thinking (payment options are a key differentiating factor for a travel business).

The Uber “seamless payment” experience, whereby the customer does not need to worry about paying a cab driver, was a catalyst in the change of perception. It became even more relevant and obvious for e-scooters, because users would not enter their credit card details for each ride, as there is no card reader on the e-scooter.

The Hopper “peace of mind” proposal, where customers don’t need worry about finding the cheapest fare or making changes to their bookings, extended the payment discussion to financial services. Indeed airlines imposed those constraints (non modifiable tickets, non refundable tickets, 10x price variation on one route…) with their revenue management practices, and it took the likes of Hopper’s fintech to compensate for the constraints and restore the confidence.

The Covid pandemic added uncertainty to travel planning and to health, with the effect of boosting travel insurance for changes and health. Insurances and other financial services have complemented the simple payment transaction, which would otherwise be definitive and risky from a customer perspective.

 

A customer-focused roadmap

The last decade has seen consumers opting for a variety of forms of payment (FOP) beyond credit cards. Airlines have faced at least three options: 1) adopt as many FOP as possible 2) steer customers to use cheaper FOP 3) promote their own FOP.

The proliferation of new FOP makes the payment market more fragmented. Airlines willing to reach more customers in every market need to support these FOP, without bearing the cost and complexity. Payment gateways enable airlines to reach customers in all markets.

Payment is not limited to the ticket purchase. It covers all the transactions during the booking process and the journey. What if a passenger could enter a lounge or go through a security fast track like they enter the subway (In London, not Paris)? The FOP should be convenient for customers’ online use as well as for a physical use, like access control.

If some FOP are cheaper for airlines to accept, it should be up to them to incentivize customers in using them. Indeed customers tend to have their preferred methods of payment (e.g. a bank credit card, a neobank card, a mobile app) which come with perks, and the perks are funded in part by merchant fees. Airlines have perks too (e.g. seat selection, priority boarding, loyalty points) which may be attractive to customers.

Promoting the airline’s own FOP may sound ambitious. Retailers like Amazon do it with Amazon Pay, or Alibaba with AliPay. In a corporate sale environment, the adoption of the FOP can be part of the airline’s contract negotiation. However in a leisure world, FOPs are ubiquitous and used by consumers daily, not only for air travel. Unless the airline can propose the same value as online retailers, they won’t be customers’ preferred option.

 

The future of digital airline payment

Air Asia is a pioneer in building a lifestyle brand, not only an airline. Many airline brands are household names, offering co-branded credit cards and loyalty programs, with the potential of becoming a “wallet”. The airline wallet can be used as a payment method for any type of physical and online purchases, while giving access to airline perks and other special offers.

Going one step further, airlines may reach out to communities that have moved beyond credit cards. For example Web3 communities in the metaverse may use crypto-currencies within their own environment and for the payment of physical goods and services.

While credit cards will continue to serve the airline industry for the coming years, digital payment alternatives pave the way to a more convenient and integrated experience for customers, and to more cost effective and flexible solutions for airlines.

Nick Price, DDID/SSI, and the “Control Yourself” Interview

Nick Price, DDID/SSI, and the “Control Yourself” Interview

Nick Price, DDID/SSI, and the “Control Yourself” Interview

 

During an interview at Phocuswright Europe, Nick Price described DDID/SSI as “the most consequential technology of a generation.” The full interview between Nick Price and Mitra Sorrells can be watched here. So how exactly did Price justify his selection of DDID/SSI as the generation’s “most consequential technology.”

Nick Price is the chair of the Hospitality & Travel Special Interest Group at the Decentralized Identity Foundation (DIF).

 

What does DDID/SSI mean?

Digital identity (DID) – “A set of validated digital attributes and credentials for the digital world, similar to a person’s identity for the real word.”

Decentralised Digital Identity (DDID) – “An open-standards based identity framework that uses digital identifiers and verifiable credentials that are self-owned, independent, and enable trusted data exchange.”

Self-sovereign identity (SSI) – aka. Decentralised Digital Identity, “Digital identities that are managed in a decentralized manner. This technology allows users to self-manage their digital identities without depending on third-party providers to store and centrally manage the data.”

DID is already globally known as one of the most significant technology trends. DDID/SSI is set to revolutionise the travel industry landscape ultimately providing individuals with a more seamless experience.

 

How consequential is DDID/SSI?

In the interview Price positioned DDID/SSI to be “equally profound” as these previous three core-technology developments:

  • TCP/IP – The Internet Protocol. The networking protocol that allowed two computers to communicate.
  • HTTP – The Hypertext Transfer Protocol. The foundation of the World Wide Web which loads web pages using hypertext links. This enabled browsers and e-commerce.
  • GSM – Global System for Mobile Communication. The digital mobile network that facilitated mobile telecommunication on mass.
  • DDID/SSI – Decentralised Digital Identity/Self-Sovereign Identity. Price explained this simply as the technology that allows “individuals, businesses, or even things to say, ‘this is me, this is who I am, and this is what I want’ and to do this ”

 

What significance does DDID/SSI have for the aviation industry?

In the interview, Price explained that DDID/SSI will eradicate the black box between the customer and the business. Currently, when a customer steps onto a plane the airline does not know them. They don’t understand their requirements, history, or desires.

DDID/SSI will enable the individual to “express themselves digitally through commerce.” Crucially, DDID/SSI will enable this through a reliable and secure interaction, cutting out the need for a third-party intermediary.

The technology will enable customers to communicate their needs directly to a provider and do this across instantly across providers as opposed to expressing needs at each step of the journey.

Crucially, only the necessary information will be shared. For example, if a provider needed to know if the individual was an adult, instead of sharing the specific age of the person it would only verify that they are over 18 years old.

 

What could a world utilising DDID/SSI look like?

The technology offers a new direct channel to customers and has the potential to be particularly influential within the travel industry. In the interview, Price described six use cases that this technology could bring to the travel industry. The first three of these he described as having the most potential:

  1. Discount entitlement – Engage in commercial interaction, providing quality information about entitlements so you receive back specific offers. Expressing exactly what you want.
  2. Sharing profile elements – Rich, accurate, singular, up to date customer profile. The ability to share elements of this profile as opposed to a complete profile.
  3. Verified stay – Accumulation of verified travel history into a wallet. This can prove travel history without giving away any specifics.

 

Where are we up to with DDID/SSI?

Europeans will soon be able to request a digital ID that will be provided through DDID/SSI to create a digital wallet. This will be available for up to 450 million travellers in Europe in the next few years. Furthermore, DDIS/SSI are not limited to Europe, this technology is being developed internationally in Singapore, Japan, North America, Europe, and more. Price predicts a rapid take-up of this technology in the coming decade.

The large scale roll out of this technology is imminent. It is new, exciting, and set to revolutionise the travel industry’s landscape. It will certainly be influential and when asked if it can be profitable, Price’s simple answer was “Yes it can.”


Article by Jess Brownlow

 

Is the Aviation Industry Primed to Accept Crypto Payments?

Is the Aviation Industry Primed to Accept Crypto Payments?

Is the Aviation Industry Primed to Accept Crypto Payments?

 

Currently, only approximately 15,000 businesses worldwide accept Bitcoin and Ether payments. However, according to Deloitte’s June survey, 75 per cent of retailers plan to accept either cryptocurrency payments within the next two years.

Crypto undoubtably represents a rapidly growing challenge to the existing payment processes. So how does this look within the aviation industry?

 

Which airlines currently accept cryptocurrencies as payment?

Despite the number of companies planning to accept crypto in the near future. The current list of airlines directly accepting them as a form of payment is surprisingly short. The following list names a few of the airlines already a part of the “cryptocurrency revolution:”

  • AirBaltic – Latvian air carrier. In 2014 the airline became the world’s first to accept Bitcoin as payment. Since 2021, the carrier cooperated with Bitpay and now accepts Bitcoin cash, Ether, and Dogecoin amongst others.
  • Peach Aviation – A leading low-cost Japanese airline was the first airline in Japan to accept crypto payment.
  • Surf Air – Los Angeles based airline offering private charter flights.
  • LOT Polish Airlines
  • Emirates – the flag carrier of the United Arab Emirates only announced their plans to accept crypto payments in May 2022.

Additionally, there are a few third-party sellers through which you can pay for flights using cryptocurrencies. These include:

  • CheapAir
  • Abitsky
  • XcelTrip
  • Alternative Airlines

 

The benefits of crypto payments

By now we are well versed in the benefits of crypto payments. But to summarise, from a company point of view some of the benefits are as follows:

  • Customers and vendors increasingly want to engage with crypto
  • Facilitates real-time accurate revenue-sharing
  • Associates your brand with cutting edge technology
  • Opens the company up to new demographic groups
  • No payment processing fees
  • Easy international payments
  • No charge-backs
  • Safe and secure mobile payments
  • No limits on transaction sizes
  • Fast processing times
  • Immutable

 

Travellers are more likely to own Bitcoin than the general public

According to Morning Consult’s survey, people who travel are more likely to own Bitcoin. 11 per cent of respondents who travelled less than once annually reported owning Bitcoin compared to 25 per cent of those who travel one to four times annually. Notably, 33 per cent of those who travel five or more times annually also owned Bitcoin.

This trend indicates a correlation between frequency of travel and the use of cryptocurrency. With the combination of an increase in airlines accepting crypto, the various benefits crypto payments can offer businesses, and the link between passengers who fly frequently and the possession of bitcoin the aviation industry appears set for crypto payments to take off.

 

Be ahead of the curve

An increasing number of crypto payments are being seen across Gen-X, Millennials, and even Zoomers. So, whilst card payments still account for 80 per cent of aviation service transactions, the integration of crypto as a payment method is an opportunity for business to get ahead of the curve.

Paul van Alfen will be interviewing the Martin Gauss, CEO of AirBaltic on the future of their FinTech strategies at the festival in Amsterdam this October. Paul is an interviewer and moderator at this year’s World Aviation Festival and has highlighted crypto payments as an interesting trend to keep an eye on in the payments sector. Paul’s personal views are not represented in this article.

Additionally, the question “Should the aviation industry be starting to introduce crypto and bitcoin payment options now, and is this what the passenger wants?” will also be explored on a panel discussing the new opportunities in alternative payments.

 


Article by Jess Brownlow

 

Buy Now Pay Later Flights?

Buy Now Pay Later Flights?

Buy Now Pay Later Flights?

The vast majority of flights currently follow a pay up front model. However, there are rising speculations that this could shift to towards a buy now pay later (BNPL) approach. Why?

 

Rising flight cancellations

This summer has been chaos for flights. On one day in July alone, London Heathrow cancelled 60 flights. According to FlightAware tracking data, that same day there were 1,700 flight cancellations around the world.

Demand for flights has grown as revenge travel moved the top of people’s lists but demand has proved hard to keep up with especially with current staff shortages.

A cancelled flight leads passengers down a tricky path of long call queues, bureaucracy, and sometimes months of waiting before payment is refunded. In the US, airlines are not even legally obligated to issue compensation. This summer, more than ever, has highlighted the shortcomings with the pay at booking system.

 

Following suit with the rest of the travel industry

According to Skift new forms of payment including BNPL are “empowering consumers” and “making travel more accessible.”

In the last few years, platforms including Booking.com and AirBnB offer their customers the option to reserve the service but differ full payment until arrival upon the property.

BNPL is standard practice in many retail settings, and it provides an opportunity for brand differentiation as the trend spreads further throughout the travel industry.

 

The Lufthansa precedent

Lufthansa introduced a ‘Pay As You Fly’ model in 1997, expanding this to their corporate customers in early 2021. This model ensures passengers are not charged until the last minute once there is a guarantee the scheduled flight will leave as planned. Departing from the pay at booking norm, the airline distinguishes itself from competitors and receives a little more per trip per customer.

The airline cancelled 800 flights on 2 September, impacting 130,000 passengers due a pilots’ union strike.

Representatives from Lufthansa will be speaking at this year’s World Aviation Festival on panels including: “How can airline CX teams keep up with the increased need for flexibility, sustainability, personalization, digital differentiation to create superior end-to-end experiences?” Additionally, Kai Schilb, Head of Payments at Lufthansa Group will be responding to questions such as “How can we adapt BNPL schemes to the needs of different countries and regions?”

 

A growing shift?

Responding to the increase in flight cancellations, the state government of Lower Saxony in Germany is calling to abolish prepayment for flights. Transport Minister Bernd Althusmann is advocating a ‘Pay As You Fly’ model for airlines insisting this is in line with consumer interests and will streamline the current refund process.

The evolution of payment systems especially after the sea of cancellations this summer is one to watch in the near future. BNPL will be discussed in the payments agenda at this year’s World Aviation Festival.

 


Article by Jess Brownlow

 

7 Myths of AI-Powered Pricing Demystified

7 Myths of AI-Powered Pricing Demystified

Airlines have concerns and incorrect assumptions about the role of AI in powering the future of pricing. In this blog, we share insights from airline questions to Datalex regarding the role of AI in transforming airline pricing for the better, and for better revenues.

True AI-powered pricing, that eliminates rules and automated tasks, is a relatively new concept and is not fully understood industry-wide. Conor O’Sullivan, Chief Product Officer at Datalex and Navin Gupta, Product Manager for Pricing AI were on hand to answer burning questions, demystify some of the myths and addressing concerns that airlines have about AI-powered pricing.

 

Myth #1 – AI-powered pricing will replace my revenue management team

While some industry providers claim they will replace revenue management functions entirely, Datalex knows this is not what the industry needs. With Datalex Pricing AI, instead of replacing, we work collaboratively with airline revenue management teams to enhance what they do today, except in real-time and at scale.

 

Myth #2 – The airline will lose all control of its pricing strategy

We know from Datalex’s own research with airline executives that 93% of airlines say it is important to retain an element of control with AI-powered pricing so that the pricing strategy supports strategic objectives such as those to enter new markets, remain competitive, ensure customer loyalty, gain new customers, and maintain brand reputation. It’s important that an AI-pricing product is transparent the airline is satisfied that a degree of control is retained through supervising and monitoring techniques that give airlines peace of mind that they are very much still in control of their pricing strategy.

 

Myth #3 – Our airline will run into privacy / consumer rights issues with personalised pricing

This is a common misconception with AI-powered pricing and this concern is assuaged by the fact that we do not incorporate customer willingness to pay in order to sell the same product at different prices. The aim should be not be ‘personalised pricing’ in the strictest meaning of this; this aim should be ‘optimal pricing’ for optimal conversion dependent on demand and other inputs. This is the approach we have taken with Datalex Pricing AI, which is based on the concept of efficiency, in that the customer benefits from the optimal price based on market conditions at any given moment and this is beneficial to the airline because it is the most efficient price. For this reason, instead of mistakenly believing that AI-powered pricing is a customer-specific endeavour, it should be thought of as customer-centric as it is the most efficient price for any customer at any given moment. AI-powered pricing should be customer-centric, not customer specific.

 

Myth #4 – Our airline can make the best pricing decisions quick enough because we know our business and our customers

What your airline does today is most likely a limiting price decision-making process that tracks demand and does not take real-time competitor pricing and customer segmentation into account. Once revenue management teams consider and deal with each input and constraint, they must immediately start all over again. Thus, creating a trade-off between accuracy and speed which is a vicious circle with current revenue management processes, and a significant hindrance to an airline’s ability to react. A revenue management team cannot process all relevant demand factors, competitive insights and suggest the most optimal price at every given moment. Some products, like Datalex’s Pricing AI product, can process all inputs at any moment – within 200 to 500 milliseconds to be exact.

 

Myth #5 – Our airline data is exposed, we will be exposing our data to other airlines

It’s a common misconception that AI is a generic tool used across customers, but powerful, intelligent AI tools are uniquely trained and completely bespoke to each airline because it leverages an airline’s proprietary data and no other.

 

Myth #6 – We don’t have the internal resources needed to integrate with our revenue management system / We don’t know or have the right AI expertise

Internal resources and a lack of AI expertise are cited by airlines as obstacles to overcome in implementing AI-powered pricing. What is different about AI is that it is built on scalable, easy-to-integrate technology that is a huge change from existing legacy systems. Despite the technology being SaaS based, AI-powered pricing products still integrate seamlessly with existing legacy systems and an airline’s existing Revenue Management tools and processes.

AI education and awareness must not be underestimated. It’s important for airlines to trust technology and experienced technology providers like Datalex to fully embrace the potential of AI and lean on AI experts in the process to bring them along on this journey.

 

Myth #7 – Our revenue management team will not learn anything if they hand all the data over

It is important for Revenue Management to feel close to and involved in the AI process. To this end, we at Datalex work closely an airline’s revenue management team directly when models are trained initially. Decisions made by models which are reviewed with Revenue Management teams to assure them that it works as expected. We do not take a “big bang” approach and we always advise deploying the product initially into a small number of markets. AI adoption is a journey.

 

Summary

Beyond the obvious revenue tailwind that AI-powered pricing represents (which has been proven to increase revenue by 2% – 3.82% in Datalex production trials), there are many more opportunities for airlines to stay competitive in-market.

With demand patterns ebbing and flowing, customer confidence changing like the wind, geo-political issues and staff shortages – all industry-wide problems – airlines must have a dynamic, fast acting product that they trust is ready to react at any given moment to such a an ever-changing travel landscape. environment.

Many airlines are keen to start their AI-powered pricing initiatives, but it must be seen as a journey that is taken in steps, with existing revenue management teams in control every step of the way.


Conor O’Sullivan, Chief Product Officer at Datalex
Navin Gupta, Product Manager for Pricing AI