Interview with Daniel Friedli, Travel in Motion – The APAC distribution landscape is “progressing but conservative”

Interview with Daniel Friedli, Travel in Motion – The APAC distribution landscape is “progressing but conservative”

Interview with Daniel Friedli, Travel in Motion – The APAC distribution landscape is “progressing but conservative”

 

In anticipation of the upcoming Aviation Festival Asia, Daniel Friedli answered some questions relating to distribution, new distribution capability (NDC), ONE Order, and the transition to modern retailing in the region.

Daniel is a Managing Director and Partner at Travel in Motion, a company which, with their partner Oystin Advisory, has years of experience bridging the gap between GDS business, the vendor, and the airline.

In this twenty-five-minute interview Daniel gave his perspective on the huge topic that is distribution in the Asia-Pacific region. Tackling this extensive subject, the Travel in Motion Partner identified areas of variation across the region providing a useful overview of the transformation, uptake, and challenges. Additionally, Daniel highlighted catalysts and barriers to change in the region, shedding light on the current landscape and cautiously drawing comparisons against other areas of the globe.

An important takeaway from the discussion was that many of these changes are costly and have repercussions that must be considered before integrating new systems. With all the future facing conversations concerning implementing updated systems, the complexities and costs around successfully installing new technology and systems cannot be understated.

The full list of questions asked is:

  • Could you give an overview of the distribution landscape in Asia?
  • Would you say the distribution is an area in which airlines are slightly hamstrung by legacy systems?
  • How have we seen COVID-19 impact the APAC region and how is this different to the rest of the world?
  • Can you explain the transformative impact NDC has had on distribution in the industry.
  • In what ways does NDC uptake vary from region to region?
  • ONE Order is still in its early stages, how do you see this developing in Asia?
  • Have there been problems transitioning to modern retailing with offer and order technology?
  • Why is it such an important time for the Asian aviation market to meet and discuss challenges in the industry?
  • What are you looking forward to at Aviation Festival Asia

 

 

Articles written by Travel in Motion include Tickets – Can We Live Without Them? The (Bleak?) Future of Departure Control Systems, Hey Airline Exec – Put your bum in my seat!

 

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

 

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

 

 

How Qatar Airways are maximising their ancillary revenue from the World Cup

How Qatar Airways are maximising their ancillary revenue from the World Cup

How Qatar Airways are maximising their ancillary revenue from the World Cup

 

The World Cup is less than a month away, commencing on 20 November 2022. Estimates predict 1.5 million fans will attend in person and Qatar, with a population of 3 million, is preparing for 200,000 air passengers a day.

Qatar Airways, the Official Airline of FIFA has been preparing for this. Although revenue from plane tickets alone will be substantial, the airline is set to capitalise on ancillary revenue. Here are some ways the airline will be cashing in on ancillary revenue this World Cup.

Ancillary revenue is defined as:

“Revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as part of the travel experience.”

 

In-flight connectivity (IFC)

Inmarsat was selected as the IFC provider for Qatar Airways’ Boeing 787-9 and 737-10 fleet. Passengers on these flights will have access to live updates from matches, video replays, and livestreamed games during the course of their flight. Through Inmarsat’s GX Aviation broadband service, passengers will also be able to browse the internet, use email and messenger apps, scroll social media, and stream videos and music. This ‘Super Wi-Fi’ will be available for one-hour free access with an option to purchase full access for the remainder of the flight.

 

Bundle deals

Match Day Shuttle

The airline is also offering a Match Day Shuttle package which allows fans to fly in for a match and return on the same day. Included in the package is easy check-in, fast track immigration, and connections to stadiums.

Travel packages

Qatar Airways are also offering travel packages, advertising them as ‘the ultimate convenience.’ The packages include flights, accommodation, and match tickets.

With these bundles which are sold directly through the airline, Qatar Airways can profit from making their passengers’ lives more convenient.

 

Additional preparation for the World Cup

Cutting routes and growing employee numbers. Qatar Airways has been in the news lately with their plans to hire 10,000 more employees for the World Cup. However, it is unknown how many of these employees are permanent. The airline has also cut 18 destinations to make space for World Cup fans travelling to the region.

Ancillary revenues have played a key role for airlines during COVID-19 and in the years emerging from the pandemic, for more detail see here. In anticipation of the World Cup, Qatar Airways is capitalising on potential ancillary revenue in a variety of ways utilising technology and their network.

 


Article by Jess Brownlow

 

How Can Airlines Maximize Revenue From Existing Visitors?

How Can Airlines Maximize Revenue From Existing Visitors?

How Can Airlines Maximize Revenue From Existing Visitors?

 

Improving the sales performance across direct digital channels is a key objective for any modern airline. But with an army of users online at any one time, each looking for a flight or holiday specific to their individual needs, how can the aviation industry present the most relevant information to every single user?

Converting more users is a key target for most e-commerce sites, but maximizing revenue from each visitor is equally important. And to do that, you need to connect with your customers on a one-to-one level.

 

The challenge

Traditionally, airlines have segmented digital audiences with business rules. If people fulfilled certain criteria or acted in a particular way, they would be targeted as part of a segment. When an airline’s sales pace was slow, strategy often relied on offering vouchers or incentives to drive bookings to broad segments.

Whilst such offerings would improve booking pace, it was ultimately diluting the revenue taken by the airline by providing discounts or value adds to people who would have booked without any incentive. Segmentation simply can’t account for the varying motivations of individuals, treating everyone in the same group exactly the same way.

The challenge for airlines was set: how can they better profile – on an individual basis – every user to drive higher revenue through strategic sales-led initiatives, avoiding revenue dilution whilst achieving higher conversion goals?

 

The solution

Machine learning is the key to understanding individual online users in real-time and at scale. By implementing a personalization platform, a customer-centric approach is able to form the basis of every sales and marketing decision.

Utilizing real-time customer-level signals throughout the user journey, technology can respond automatically to shopping behaviors. At BD4, we call this ‘Human touch e-commerce’ – and our work within the aviation and travel industry proves that individual-level modeling works.

AI-driven profiling  and decision-making solution drives real-time interventions which:

  • Increased revenue per user
  • Minimize churn
  • Reduce retail friction
  • Avoid unnecessary discounting
  • Ensure effective allocation of incentive funds and optimize budgets

With a deep understanding and connection to customers, airlines are able to present individually tailored messages which are relevant to each person within their broad audience profile. Deploying automated AI allows airlines to offer digital interventions at the most appropriate stage of the booking process, removing the risk of revenue dilution for customers who were already determined to book.

To prove the effectiveness of a targeted approach, multiple tests under transparent control periods are run, from the initial Learning phase (as we know every airline and indeed every company has nuances in their audiences), to a Training period. This is followed by a Test and Control period, highlighting the impact of the tailored interventions, before implementing the optimized solution across the site. Driven by AI technology, the platform continually learns and improves the algorithms to ensure airlines are always adapting, and moving forward with their audience.

The latest AI-driven interventions for airline customers focus on providing intelligent incentives to drive bookings – intelligent in a way that only those users who needed an incentive to be converted saw a discount campaign. The individually targeted incentives have shown up to 6% uplift in revenue per user, and saved more than USD 1 million versus a more traditional, scatter-gun segmented approach to distributing vouchers and incentives. All this was achieved with a significant return on investment – up to 8 times! Read more about this specific project in our case study .

 

Helping airlines form meaningful connections with their customers

At BD4, we work with multiple airlines and well-known holiday brands, including easyJet holidays, Royal Air Maroc, and Etihad Airways.

The different stages of the digital buying journey enables a multitude of use-cases to connect with customers on a personal level. By interacting with customers on a one-to-one level, technology is able to humanize a company within the digital realm. And it’s this human touch e-commerce that helps companies maximize the value from each customer.

Discover more about BD4 online or visit them on stand 12.610 during the World Aviation Festival 2022.


Article written by BD4 – human touch e-commerce

 

Airline Ancillary Revenue Reaches $462 Billion in 2021

Airline Ancillary Revenue Reaches $462 Billion in 2021

Airline Ancillary Revenue Reaches $462 Billion in 2021

 

The 2022 CarTrawler Yearbook of Ancillary Revenue shows ancillary revenue performance for top 75 airlines globally.

The 2022 CarTrawler Yearbook of Ancillary Revenue published by IdeasWorksCompany, is a comprehensive analysis of the ancillary revenue performance of 75 global airlines. Released this week, the report breaks down ancillary revenue performance from 2019 to 2021, investigates how airlines have recovered since the pandemic, the new or expanded ancillary products they’ve introduced to accommodate changing customer needs and behaviours, and much more.

 

Responding to a crisis

The airline industry has certainly had a tough time over the last two years, and the aftershocks are not over yet, with staff shortages due to illness still impacting travel. However, there has been strong recovery, thanks in part to the airlines’ ability to pivot and respond not only to changing mandates, but to changing customer needs and behaviour.

Ancillary products and their revenue have been a key driver of the airlines’ path to recovery, and The 2022 CarTrawler Yearbook of Ancillary Revenue shows promising results from the 75 airlines covered. Due to the pandemic, the yearbook is comparing 2021 to 2019 rather than 2020, to give a more accurate view of ancillary revenue performance after the pandemic.

 

Recovery is happening

In 2019, the global estimate of ancillary revenue was $840 billion. In 2021, that estimate is $462 billion – a significant decrease – although still a 32% increase on 2020’s performance ($350 billion), showing strong recovery, despite ongoing obstacles. While some markets (Asia and the South Pacific) are still not travelling at the same rate as pre-pandemic, most markets have shown strong travel increases from 2020, with MENA at 102% YOY in 2021, Europe at 84.3% YOY and North America at 79% YOY.

 

Key highlights

Many airlines saw significant increases in ancillary revenue from 2019 to 2021, including Wizz Air, the top performing airline whose ancillary revenue accounts for 56% of total revenue, an increase of 10 percentage points from 2019. Please see article here to learn more about Wizz Air’s ancillary revenue.

All carrier categories saw their ancillary revenue increase from 2019 to 2021 with low cost carriers seeing the highest increase at 36.3%.

Ancillary revenue per passenger also increased significantly with the top performer, HK Express, now having a per passenger revenue of $88.21 – an increase of $60.36 from 2019.

 

Frequent fliers

The five largest US airlines (Alaska, American Delta, Southwest, and United) generated $16.4 billion from their frequent flyer programs in 2021 – down from $19.5 billion in 2019, however, when this revenue was measured on a per-passenger basis, the result for 2021 was $30.88 per passenger up from $25.71, a 20.1% increase.  This shows passengers may be flying less, but spending more.

 

Changes to increase conversion

Airlines have continued to optimise their ancillary products to drive conversion, and accommodate changing customer needs and behaviours, following two years of very little travel. Some expanded product offerings include large carry-on fees, extra legroom zones, subscription-based benefits, price freeze, and prepaid change flexibility.

To see a complete breakdown of 75 airlines’ ancillary revenue performance in 2021, insights into how to better optimise products to increase conversion, changes that airlines have made or are planning to make to their products and much more, download  

 


Article by CarTrawler 

 

Wizz Air Tops CarTrawler Yearbook of Ancillary Revenue

Wizz Air Tops CarTrawler Yearbook of Ancillary Revenue

Wizz Air Tops CarTrawler Yearbook of Ancillary Revenue

On 27th September the 2022 CarTrawler Yearbook of Ancillary Revenue was released, and Wizz Air was top of the class.

It is widely known that during 2020, ancillary revenues played a key role for airlines whilst planes were grounded and ticket sales paused. This study highlights the continued importance of ancillary revenues to airlines as we return to normal, shedding light on one of the key channels of revenue within the industry.

Defining ancillary revenue as, “revenue beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience,” the yearbook looks at a collection of 75 airlines including the world’s “most prolific users of ancillary revenue.”

The study compares the 2021 data to the pre-pandemic 2019 data as the 2020 results are overly affected by the pandemic and therefore are not as useful for producing a comparison.

Results showing the top ten high-performing carriers based on ancillary revenue as a per cent of total revenue were as follows:

  1. Wizz Air 56.0%
  2. Frontier 54.9%
  3. Spirit 54.3%
  4. Allegiant 51.3%
  5. Viva Aerobus 44.8%
  6. Ryanair Group 44.7%
  7. Volaris 42.9%
  8. GOL 33.0%
  9. easyJet 31.4%
  10. Pegasus 30.8%

Wizz Air had multiple ancillary revenue activities including airport check-in options, airport transfers and parking, assigned seating, “sitting together” fee, auto check-in, on board food and beverage, fare lock, fast track security, and on time arrival guarantee to name only a few.

At the Future Travel Experience EMEA event in Dublin, Robert Carey Wizz Air President discussed how the airline became the number one for ancillary revenues. Carey highlighted partnerships between airports and airlines, as one of the most important ways to extend opportunities and “interact with customers in new ways to grow business for all parties.”

The results of CarTrawler’s Yearbook highlighted the importance of ancillary revenue to airlines’ revenue in 2021. This year’s World Aviation Festival will feature an ancillary panel, an interview with Eddie Wilson from Ryanair DAC regarding the “future of market share, competition, digital transformation and ancillaries at Ryanair,” as well as a presentation by CarTrawler CEO Cormac Barry on “maximising ancillary revenue through technology and innovation.” Robert Carey, Wizz Air will also be speaking on “what is the next step in Wizz Air’s ambitious expansion strategy and how can it maintain that growth while still meeting big sustainability targets?”

 


Article by Jess Brownlow

 

The Third Horizon of Opportunity – High-Performance Retailing

The Third Horizon of Opportunity – High-Performance Retailing

The Third Horizon of Opportunity – High-Performance Retailing

The event season is a great time of year to lift our heads from the busy day-to-day and look at what is on the horizon, at the trends shaping the airline industry. The funny thing about horizons is that you never really get there, but it’s where new eras dawn. Accelya’s Tye Radcliffe, SVP of Product Strategy for the Order group, gives his perspective on the market as the industry emerges into the third horizon of value.  Tye will be talking to people about this topic while ‘on the circuit’ over the coming weeks. So, what does it mean?

 

The first horizon

The first horizon was operational – getting passengers from A to B. The industry depended heavily on big, monolithic mainframes that enabled just that – and very successfully. Then the internet arrived.  Airlines began investing in their digital direct storefronts so customers could start making bookings from their computers.  Customers began to want and expect more.  Plus, airlines wanted to be more innovative and directly service the needs of their customers! It was a frustrating time for many.

 

The second horizon

Airline frustration with the status quo made way for the second horizon characterized by airline-controlled distribution with NDC – and the freedom to create offers. The industry’s new rally cry was one of ‘retailing!’. Airlines would use data and rules to tailor core offers, ancillaries, and bundles. The offers would be made according to the customer’s wants and what’s right for the airline business – at that time.

 

The third horizon

Replacing monolithic with modular, and embracing ONE Order and science rather than rules, brings us into the third horizon of high-performance retailing.

 

 

ONE Order collapses data into a single order record.  People or technology can access the data anywhere across the retailing and travel experience.  This new accessibility makes way for a seamless interdependence between offer creation, order management, payment, fulfilment, and settlement.  If an element in the experience changes, voluntarily or otherwise, a high-performance retailing platform adapts as a result.  For example, suppose someone’s interline flight segment is cancelled while they are at the airport.  Data science models and flexible, best-of-breed retailing technology could step in to power a better experience.  Ancillary purchases could be automatically rolled into a new flight option.  The customer could be offered half-price lounge access from a third-party provider to compensate for their wait.  This offer could be made at any touchpoint from airport operations crew to a message to their phone in real-time.  All this would happen without disruption to downstream processes such as accounting and revenue integrity.

The interdependence of best-of-breed retailing components, acting in unison according to changes in the retailing or travel experience, would create a perpetual motion of value to customers, the airline, and its partners.  That is high-performance retailing.

This scenario may be on the near-term horizon for innovators and visionaries.  But if your airline is not there now, how can you prepare for high-performance today? Think A to F.

 

A to F

A – Accounting and Finance: Prepare downstream processes for retailing

B – Bundles and Ancillaries: Introduce dynamic retailing of products such as premium seats, meals, WIFI, lounge access, and bundles

C – Core Offers: Add more agility to your revenue management processes by using more data sources such as competitor data

D – Distribution: Control your channels with NDC and encourage channel adoption with distinctive offers

E – Enrich: As you get more sophisticated, consider enriching your retailing strategies with data science to finetune offer creation and optimization

F – Freedom: Break free from legacy constraints by swapping monolithic with modular and embracing best-of-breed.

 

If this topic interests you, join me at the World Aviation Festival for my roundtable on October 5 at 11.20 am.

 


 

Article by Tye Radcliff, SVP Product Strategy (Order Group)

If you would like some fresh thinking about airline retailing, then check out Accelya’s Air Transformation Lab. This is where we ask a fundamental question: when it comes to the path to distribution freedom and high-performance retailing, where is your airline on this route? Join us on this exploration into airline retailing from various vantage points to inspire your journey ahead.

Find out more here

AirAsia Introduce ‘airasia Holidays’ To Their Super App

AirAsia Introduce ‘airasia Holidays’ To Their Super App

AirAsia Introduce ‘airasia Holidays’ to Their Super App

 

This month, the airasia Super App introduced ‘airasia holidays.’ Adding to the Super App’s brand as the ultimate one-stop-shop, users in Malaysia and the Philippines will now be able to customise their entire holiday itinerary. This will include adding flights and hotel bookings to create one cohesive holiday bundle without ever leaving the app.

The CEO of airasia Super App, Amanda Woo said:

“airasia holidays offers our app users a more robust, holistic and convenient booking experience with our capabilities as an airline and in hotel inventory management. With over 50 million active users in our database, we have a unique capability to offer personalised suggestions of holiday activities, flights, and hotels suited for each traveller, all through one convenient platform.”

The Super App will now allow users to book holidays in four simple steps:

  1. Select ‘Holidays’ on the airasia Super App
  2. Select the activity
  3. Add flights and pick from the hotel options
  4. Confirm the booking

The entire booking will be condensed into one payment which can be paid for through the app. Additionally, once the holiday begins, users can use the Super App as a hub through which to check-in for flights and demonstrate booking confirmations to both the hotel and activity provider.

The Super App will enable all of the above to be booked with low prices, expanding their repertoire as an all-in-one low-cost platform. Additional benefits include shopping for duty-free products, flight updates, check-in reminders, exclusive promotions, and the ability to connect with other travellers.

All in-app purchases including flights, hotel stays, airasia ride, and airasia food earns users points which can be used against future purchases, rewarding customers for their loyalty with discounted flights and bookings.

Currently, airasia holiday users will select their flights from bundles with AirAsia. However, Woo has revealed the Super App are “working on enabling airasia holiday customers to select flights from other airlines too, effectively pushing the limits of the holiday destinations they wish to explore.” Although initially commencing in Malaysia and the Philippines, airasia holidays will eventually be rolled out to other markets.

AirAsia created the airline industry’s first super app. The app was developed during the pandemic, offering the budget airline an alternative revenue stream. Building on a vision to become the leading digital travel and lifestyle platform in Asean, the app initially incorporated food delivery, e-commerce, and e-hailing arms. As travel reopened users could book flights on over 700 global carriers and stay with over 700,000 hotels globally. The app is currently working with in strategic collaboration with Google Cloud to develop their access. They are also working with tech companies to develop their biometric ID, chatbots, e-wallets, and more.

The Super App, boasting over ten million monthly active users in the second quarter of 2022, is a prime example of customer focused business, enhancing their experience through convenience and rewards for loyalty.

At this year’s World Aviation Festival, AirAsia’s Keynote will discuss the question, “How is the AirAsia ecosystem, including AirAsia Money and the airasia Super App creating more value and opportunity for customers than ever?”

 


Article by Jess Brownlow

 

What Is the Future of Airport Parking?

What Is the Future of Airport Parking?

What Is the Future of Airport Parking?

 

1.  Overview of the current situation

Airports must include parking in their development plans as the aviation sector experiences ongoing growth. One of the most significant non-aeronautical assets of airports remains to be parking, although the emergence of new technology and travellers’ choice of multimodal transportation in many locations continue to challenge the industry.

In this context, parking is not only a crucial asset for the airport’s bottom line but also a strategic tool to attract and retain passengers. As such, airports are increasingly focusing on this area to optimise the value of their assets and develop a sustainable business model. It is indeed important for airports to diversify their revenue streams to reduce the reliance on aeronautical revenues and alleviate airport congestion.

 

2.  What are the main challenges facing the airport parking industry?

The main challenges that the airport parking industry is still facing include the fact that media portrayal of airport parking is almost always negative. Unfortunately, coverage of the industry is usually driven by events such as companies failing or negligent team members.

This makes it hard to communicate the benefits of off-airport. This perception must be changed.

The reality is that long-stay parking, as an alternative to “Kiss & Fly” drop-offs from family or friends, has a substantial role to play in lowering carbon emissions by minimising car trips to and from airports.

Long-term parking is also a much less expensive alternative to “Kiss & Fly” drop-offs and can be very convenient for families who wish to avoid driving long distances.

If more people could be convinced to park their cars at the airport, it would help relieve traffic congestion and pollution in city centres, as well as reducing parking charges in some locations.

Another major issue is making sure that the customer feels confident while leaving the car during their travels. If a customer is not confident in the security of their vehicle, they will be less likely to use long-term parking.

The most important issues for customers are how safe the car will be and whether it will be returned in the same condition. To provide customers with confidence, many parking lots have 24-hour security, which ensures that their vehicle is always secure. But the idea of parking on-site at the airport is still perceived as more convenient and less stressful. A recent survey of travellers found that they still prefer to park on-site at airports, but will consider off-site parking if the price is right.

 

3.  Off-airport parking

While on-airport parking is the most convenient option for travellers, it can also be the most expensive. Off-airport parking options are often more affordable and can help relieve some of the pressure on airports during peak travel times.

Since comparing platforms is not limited to off-site airport parking but can be used for services in general, the opportunities for expansion are endless, especially for airlines and travel agencies. If a business wants to expand into new markets, it can just create a profile on our website and share its own unique offerings with travellers.

 

4.  How Parkos approaches it

At the busiest airports, high-quality off-airport shuttle and valet services are

well-established, provide convenience for travellers, and are more affordable. People who prefer not to travel through congested and frequently confusing airport roads prefer off-site options.

According to Parkos, the best way for airports to continue profiting from parking without the hassle of setting up a reservation management system is to focus on expanding their reach. Airports will be able to offer parking to a larger group of travelers if they are available on comparison platforms. In this way, the capacity will be monitored constantly and the pricing will be set according to demand and capacity.

We “Parkos” also provides airport managers with real-time data regarding their revenue, user numbers, and parking space availability. This information can help them decide whether or not to expand their parking structure and make important investment decisions accordingly.

 

5.  How will technology help make airport parking more efficient in the future?

How can airports solve these problems? New parking technologies are helping airports address some of these issues. With a growing number of travellers each year, Lyon-Saint Exupéry Airport for example, has been struggling to keep up with the demand for drop-off points close to the terminal. In an effort to improve the situation, Stanley Robotics recently introduced autonomous parking robots at the airport.

The robots, which are about the size of a small car, will park in designated spots and then shuttle passengers to and from the terminal. This will free up space near the terminal for other vehicles and should help reduce congestion.

 

6. The green future of Airport parking

Airport parking is a major source of emissions. In order to reduce its environmental impact, many airports are turning to green solutions such as electric vehicle charging stations and solar panels.

Electric vehicles are becoming increasingly popular, and as a result, more and more airports are installing charging stations. This is the opportunity for off-airport parking to convert to electric shuttles to reduce carbon emission as well.

Solar panels are another way that airports are reducing their emissions. By harnessing the power of the sun, solar panels can provide a clean and renewable source of energy.

 

Conclusions

In conclusion, airport parking is an important aspect of the travel industry that will continue to grow and change. Many of the changes will be driven by new technology and sustainability. The key to success, as in any industry, will be the ability to adapt. The travel industry is constantly changing, and airport parking is a big part of the travelling experience. Airport managers must take advantage of new technologies to improve their businesses and serve their customers better by looking at comparing platforms as allies, in the pursuit of achieving a greater level of satisfaction in their parking experiences.


Article written by Camilla Spadari at Parkos

Appealing To The New Generation of Passengers Through Omnichannel Retail

Appealing To The New Generation of Passengers Through Omnichannel Retail

Appealing To The New Generation of Passengers Through Omnichannel Retail

 

By 2025, Gen-Y and Gen-Z will make up over 50 per cent of all passengers. To appeal to these new generations of travellers, airports must adopt a digitised approach through omnichannel retail.

 

New demands

Lately, there has been an increase in the proportion of less affluent Gen-Y and Gen-Z travellers. Paired with this has been a lower demand for traditional airport retail products. Airports must adapt, adjusting the goods they offer and the ways they promote them to the younger generations. Gen-Z, and to a lesser extent Gen-Y, have grown up with online shopping and all the benefits this offers. To attract the convenience-centred, newer, digital generations airports must turn towards an omnichannel airport retail strategy.

 

What is an omnichannel retail strategy?

Omnichannel: “A method of combining the advantages of in-store shopping with the convenience of online to deliver a superior customer experience. In this model, customers can interact simultaneously with multiple sales and media channels, moving between showroom and website in one seamless journey.”

 

What can an omnichannel retail strategy look like at airport?

Airport retailers are transitioning towards a digitised experience for their passengers. This is occurring in a multitude of ways, the examples below are only some of the airlines and airports that now offer these systems.

  • A ‘click & collect’ points system. Seamlessly blending the online and physical shopping experience, 52 per cent of surveyed respondents said this would increase their likelihood of shopping in airports. The ‘Reserve and Collect’ shopping system at Heathrow offers passengers the opportunity to earn bonus Heathrow Rewards points when using this system. Heathrow is only one of the airports tapping into customer demands for ‘click & collect’ points systems.
  • The ability to research and pre-order goods to collect these at the airports. 46 per cent of those surveyed said online pre-ordering would increase their likelihood of shopping in airports. This service is offered at World Duty Free in Gatwick airport amongst others.
  • The option to interact with the product instore but deliver the goods directly to a passenger’s home. This would appeal to the 27 per cent of respondents who stated home delivery of goods would increase the likelihood of airport shopping. Some airlines offering this service are Cathay Pacific, EVA Air, Finnair, Hong Kong Airlines, KLM, Malaysia Airlines, Saudi Arabian Airlines, Virgin Atlantic, and more.
  • QR codes linking to further information relating to an in-store product, Instagram accounts promoting it, and other medias to digitise their customers’ experience and appeal to the younger generations. At the Omnichannel Strategy of the Year – Singapore Award winner iShopChangi, customers can browse online for the latest offers and interact with beauty ambassadors whilst in-store getting personalised advice, samples, and offers.
  • AR and VR tech to virtually engage with products and share these on social media. iGA Instanbul Airport has AR tech enabling passengers to see objects virtually in an “interactive real-world environment.” Through this, customers can find out about campaign offers and move between stores.

Providing an omnichannel retail experience blending online and instore benefits is key to drawing Gen-Y and Gen-Z consumers into the world of airport retail.

For more on digital consumer trends read Marisa Garcia’s article here.

The year’s World Aviation Festival focuses on how to digitise retail and the importance of omnichannel retailing. One panel discussion will be asking “How can we achieve this vision of omnichannel modern retailing?”

 


Article by Jess Brownlow

 

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

 

Kansai Airports Introduce Interactive Customer Service Robots to Improve Airport Retail

Kansai Airports Introduce Interactive Customer Service Robots to Improve Airport Retail

Kansai Airports Introduce Interactive Customer Service Robots to Improve Airport Retail

In late August, Kansai Airports introduced remote interactive robots to promote product sales at the retail stores in Kobe Airport. Japan has consistently positioned itself as a pioneer of robotic innovations and the customer service robots are only the latest in a long line of intelligent technology at the Kansai Airports.

 

The robots

The robots are part of the Moonshot Research and Development Programme. The programme consists of Moonshot Goals that the government set to attract people and promote high-risk, high-impact research and development.

The robots, currently being trialled at Kobe Airport are placed near and inside store entrances with staff controlling them to “remotely provide customer service and product recommendations.” More robots will be placed at store shelves to promote recommended products to customers.

 

To what end?

Kansai Airports Group hoped the robots would increase sales through injecting some novelty into airport retail. Their wider aim was to draw passengers to their airports through “exciting initiatives,” proving customers with new, stimulating travel experiences. The group hoped the integration of this AI would make shopping in the airports fun and ultimately drive sales within the airport higher.

 

Kansai Airports’ history with AI

The customer service robots are just the latest to join the range of robots aiming to make the experience at Kansai Airports Group airports comfortable, secure, and exciting. The robots all have built-in sensors to stop them bumping into passengers or objects, enabling them to venture round the airports conducting various services.

The chatty security robot, Secom Robot X2 patrols the airport with built-in cameras. It even oversees its designated surroundings whilst recharging its battery.

The cleaning robots facilitate the autonomous cleaning of the terminal buildings.

Additionally, in September 2021 an automated robotic PCR testing system was set up in response to the COVID-19 pandemic. This processed up to 2,500 samples a day and could produce PCR certificates in as little as three hours.

Back in 2018, Kansai Airports also conducted the trial of SITA’s intelligent check-in kiosk, Kate. The intelligent kiosk was mobile, autonomously migrating to congested areas of the airport to firefight growing check-in queues.

SITA’s CEO, David Lavorel is speaking at this year’s World Aviation Festival discussing smart technology, automation, and digitalisation in airports. The event will also explore the theme of “Reinventing Retail” delving into the changing landscape of retail within the industry.

 


Article by Jess Brownlow

 

The Benefits of Emirates’ $2 Billion Investment in Their Inflight Experience Are Felt

The Benefits of Emirates’ $2 Billion Investment in Their Inflight Experience Are Felt

The Benefits of Emirates’ $2 Billion Investment in Their Inflight Experience Are Felt

 

“While others respond to industry pressures with cost cuts, Emirates is flying against the grain.”  In August 2022, the Emirates President Sir Tim Clark announced that instead of cutting costs, Emirates will be investing in their inflight customer experience to the tune of $2 billion.

 

A different response to COVID-19 pressures

This investment comes only two years after airlines suffered economic losses of around $168 billion in 2020 as a result of COVID-19. Sir Tim Clark has explained the bold step, stating “throughout the pandemic we’ve continued to launch new services and initiatives […] Now we’re rolling out a series of intensive programmes to take Emirates’ signature inflight experiences to the next level.”

 

How has customer experience been enhanced?

  • An upgraded interior cabin. The airline plans to retrofit over 120 aircraft with the latest interiors. The enhanced cabin interiors will be witnessed across all classes and will include new or reupholstered seats, new panelling, new flooring, and more.
  • A First Class menu designed by award-winning chefs and a world-class catering team. Food will now include roasted duck breast with orange thyme jus and Persian caviar. From September until the end October, Emirates will be serving the very rare 2003 Dom Perignon “P2” champagne.
  • New business and economy menus. These will now include a new plant-based menu suitable for vegan passengers.
  • A cabin crew trained through a partnership with Ecole hôtelière de Lausanne (one of the world’s top hospitality management schools).
  • Food produced by Bustanica, a vertical farm dedicated to sustainable supply chains. (This will only be available on flights departing from Dubai.) The airline will continue investment in sustainably supply chains, obtaining food from local suppliers wherever possible.

 

Timeline

Some of these changes have already been seen, with the First Class inflight menu debuting back in August and the new economy menus rolling out this September. Other changes, such as the retrofitting of the interior cabins are more extensive and won’t be seen for a couple more months. The process of retrofitting the cabins will begin in November, rolling one aircraft into service every sixteen days with the first emerging on 1st December.

Sir Tim Clark envisions the investment taking their “signature inflight experiences to the next level.” The Emirates president will be speaking at this year’s World Aviation Festival in October.

 


Article by Jess Brownlow

 

The Future of Dynamic Pricing for Airlines

The Future of Dynamic Pricing for Airlines

The idea of dynamic pricing – optimizing prices based on demand and propensity to buy – is not a new concept. For centuries, businesses have implemented this strategy to adjust prices for products and services based on customer demand. Revenue leaders have adopted this across many industries, including hospitality, tourism, entertainment, retail, energy, public transportation, and commercial airlines with the goal to maximize sales volumes and product or service value by stimulating pricing urgency and market demand.

While the retail and entertainment industries have excelled in innovating their dynamic pricing models and technology, the airline industry has been left behind with legacy methodologies that are no longer able to keep up with today’s volatile market and ever-changing landscape. With market demand fluctuating, historical reports and sequential modeling used today can only tell a fraction of the story. And without the proper context, airlines are stuck in the past, lagging behind other industries and far from realizing the full revenue potential of dynamic pricing.

Many airlines still rely on static pricing, which uses a limited number of price points tied to the reservation booking designators (RBD) which are then filed through ATPCO. To provide their travelers with more optimal offers, some airlines started to introduce continuous pricing, offering more gradual prices. Lufthansa Group was amongst the first airlines to serve continuous priced offers on their direct and New Distribution Capabilities (NDC) channels in 2020 and immediately saw an increased revenue and conversion rate. However, with the constraint and heavy reliance for this industry on filed fares and RBD, there are comparatively few successful initiatives that involve true dynamic pricing applied to all sales channels.

On top of this, ancillary revenues – those generated through extra baggage, in-flight refreshments, internet access, seat selection, etc., which bring the industry around $55 billion according to McKinsey – are often managed through separate and isolated IT systems, meaning airlines struggle to understand how changes in dynamically priced fares also impact ancillary sales and total revenue optimization.

As long as outdated systems and obsolete methodologies remain in place, airlines will continue to fall behind other industries in maximizing revenue potential. Technological advancements, alongside successes in other industries, indicate the time is right for airlines to unlock the potential of dynamic pricing for their sales channels. This industry needs to break free from legacy technology constraints and start implementing optimal pricing strategies that take into account how decisions such as price, offer, channel or customer may impact the business outcomes and revenue performance. So what is the next step to transforming airline pricing?

Artificial Intelligence (AI) enables a transformation in airlines’ commercial performance and customer experience. Specifically, deep learning – a cutting-edge form of AI that uses neural networks trained to perform specific tasks under different conditions – creates context by looking at past behaviors, identifying good behavior versus bad behavior, and rewarding good behavior. This results in reduced forecasting errors, allowing analysts to rapidly respond to changes through added context (i.e. search data, ancillary revenue, cargo capacity, etc.). This revolutionary technology can find its path to desired business and revenue outcomes by correlating vast amounts of data, even in environments where data is sparse or noisy, a very real situation experienced by the travel and transportation industry today.

 

Dynamic Pricing with Deep Learning

Airlines need to sell the right product to the right customer at the right time, in the right channel, and at the right price. When embracing advanced deep learning technology, it provides automated, AI-driven revenue management capabilities that maximize airline profitability and total revenue optimization.

When it comes to dynamic pricing, deep learning and cloud development empower real-time customer segmentation and react much faster to any market change or surge in demand or commission rates. The Revenue Operating System puts into action AI-driven revenue management using deep learning to make predictions directly from context such as market forces, competitive forces, customer forces, and network changes.

 

Harnessing the Power of Data

Through the adoption of advanced AI, digital-first airlines are able to harness the power of data, going beyond historical data and leading the charge in dynamic pricing and other commercial decisions. With The Revenue Operating System, airline analysts can discover similarities between markets, competitors, leading demand signals, and events.

Identifying such signals before they are clearly visible in data-sparse subsets of the airline network helps focus attention where it’s needed most. With the right insights readily available and continuously updated, airline teams can, in real-time, start to resolve complex questions that used to be answered with guesswork or tribal knowledge.

Dynamic pricing powered by deep learning is the key to creating optimal offers for airlines. And as part of FLYR’s total revenue optimization ecosystem, commercial teams are now able to automate pricing decisions in real-time, optimize total revenue including ancillaries, create personalized offers optimizing customer conversions and lifetime value, create trusted load forecasts to optimize capacity plans, direct marketing spend and energy towards high yielding returns, and confidently sell cargo capacity earlier.

 


Charles Ruesch, Head of Offer & Distribution at FLYR

Follow @flyrlabs on Twitter and LinkedIn for the latest news and updates on AI-driven revenue optimization.

 

Digital Innovations – A Necessity for the Travel and Retail Industries in the ‘New Normal’

Digital Innovations – A Necessity for the Travel and Retail Industries in the ‘New Normal’

The beginning of 2020 brought with it the hopes for a new decade. The year which started with bright smiles, successful project launches, and travel plans, has now become a long haul waiting for life to get back to normal. The change meant so much more to the people who spent their days within the airport. It didn’t seem like the projections for the travel industry would be achievable.

Looking back a few months now, we hadn’t anticipated this drastic change. Nobody ever thought that we would see a day where not a single plane would fly in the air, that there would be a global lockdown, or that crude oil would be so cheap! The COVID-19 pandemic has shown us a new world. While we are still trying to grasp the lifestyle changes we need to make, organizations and companies are trying to deal with lost sales and loss of revenues. The new challenge has also driven the need for organizations to re-think their approach and restructure. The trust with their customers can be built now only by ensuring that safety and sanitization are maintained, which is possible only by understanding the customer’s perspective. The challenge will be to revisit processes and abide by government-issued health guidelines.

At Pittsburgh International Airport, high-traffic floor areas are being cleaned and disinfected via robots using UV-C rays. JetBlue is cleaning airport terminals using a hospital-grade disinfectant and has also increased the cleaning frequency. T.S.A. officers need to change their gloves after each pat-down or on customer’s request. Delta is using a mist-based disinfectant via an “electrostatic sprayer.” While United Airlines has introduced their ‘all in one’ economy snack bag that contains a sanitizer wipe along with bottled water and snacks, other airlines are asking customers to eat food before traveling.

The pandemic has also brought attention to facts that were ignored. The retail experience within stores at the airport isn’t the same as the retail experience on the high street. Retailers at airports are yet to catch-up with the innovations that are happening outside of their world. With COVID-19, the need to invest in the digital transformation has strengthened. The challenge to maintain the same experience of a product/brand inside the airport and outside remains and is solidified.

The following innovations need to be adopted by organizations and the travel industry in general to ensure the continuation of their businesses. COVID-19 has definitely pre-empted innovation, which was inevitable due to the ‘more online interaction and less physical’ preference of the millennials:

1) Digital transformation: The key strategies for digital transformation are driving customer experiences with customer data platforms and personalization. Tracking customer interaction at every touchpoint within the airport, with the brands and their products enables better segmentation and predictive analytics.

2) Gamification / Virtual Reality: With COVID-19, hygiene and social distancing have become the norm. Gone are the days when customers tested sample products before purchasing. The panic of the pandemic is prevalent and here to stay as a part of our life. Companies will need to think out of the box. To avoid physical contact and still ensure customer tries the product before purchasing, several tools are available in the market today. Brands have their own ‘Virtual Try-on’ tools and quizzes to recommend products to consumers.

3) Contactless payment options: COVID-19 has emphasized the need for increased hygiene and sanitization. In stores, making cash payments is the riskiest transaction. The heightened sense of sanitization will make customers avoid such transactions. To enhance customer experience and their safety, contactless payments at retail outlets will be the new norm. Technologies like NFC can help brands to enable this.

4) Loyalty: Technology can be used to enhance loyalty for travelers by firstly integrating loyalty services commonly across all stores of the brand. Secondly, via an initiative to tightly couple loyalty programs of the brand with travel service providers (like airlines and airports). This way, consumers can see the added advantage of remaining loyal to a brand, and also enjoy enhanced loyalty since the services are integrated. Customers prefer value to price, and a tightly coupled loyalty program can enable it.

5) Super apps: Especially with most consumers using multiple devices and multiple channels for varied needs – booking tickets, tracking status, tracking loyalty points for the airline, buying products, etc. If all these different apps used by the customer can be clubbed into one super app, the benefits will be immense. The customer can use the same app to book their ticket, check status (of flights or product deliveries), make a purchase of a product from the brand, and use the same app to track loyalty points (for the airline and the product purchase). This connected app will enable the customer to have everything required under one umbrella. This again requires a well-integrated system of companies/brands with airports and travel service providers.

 

Conclusion

In summary, the above innovations need to become essential in organizations’ standard operating procedures to ensure that they can survive the new normal post-COVID-19. This is the opportunity for every organization to stop, assess their current set-up, and measure up for future innovations. The call for a well-connected integrated world is undying and will be here to stay, just as we tackle our new normal with the COVID-19, which is also here to stay.
It is possible that in the near future, a customer journey is well-connected and integrated – to ensure a seamless and safe experience.


Shwetha Jha, Principal Consultant at Mindtree

Why is NDC taking so long?

Why is NDC taking so long?

I keep hearing the same concerns about the perceived speed of the transition to airline digital retailing, whether I speak with airlines, sellers and travel tech companies who have embarked in the transition, or with other players who have chosen to wait and see.

Understanding the good and bad reasons for the lack of speed (compared to expectations) is helpful to find ways to accelerate the transition. It will be even more valuable to plan for the next transition, towards order management.

 

What are the expectations?

 

Having one airline implementing one distribution API is fast. Air Canada had a distribution API before NDC started. easyJet had an API connected with one GDS before NDC started. An airline group called Open Axis even had a standard for API distribution before NDC started. If this is all we know, NDC should be implemented globally in a couple of years, right?

On the other hand, airlines, travel agents and GDSs have been working hard for the past 50 years to build a global interconnected platform allowing any customer to find in real-time the best itinerary and best fare to get from A to B anywhere in the world. Even after 50 years of hard work, using pre-internet technologies, the platform does not support the latest innovations in dynamic pricing and ancillaries. Upgrading this entire platform, with new processes and technologies, should take at least 50 years, right?

A reasonable expectation lies probably in the middle. Implementing NDC worldwide has clearly not taken 2-3 years (this was only the time necessary to get the US DOT approval). But hopefully upgrading the distribution infrastructure of the air travel industry won’t take 50 years. For a program launched in 2011, the transition will be completed for the first players in 2025 and probably for the rest of the industry by 2030.

 

What are the key remaining challenges for implementation?

 
The initial challenges were typical of a major digital transformation program, except for contractual and business models issues, which are specific to the status of this industry. Challenges included: awareness, business case, funding, skilled resources, contractual restrictions, technical solution, innovative partners, incentives, on-boarding, and differentiated content.

Awareness: I’d be curious to see the results of an awareness survey, showing how many travel distribution professionals have heard about NDC and can define it.

Business case: While many airlines have figured out a business case, including revenue generation from ancillaries, cost reductions and enhanced customer experience, there are still many players still scratching their heads. Indeed, selling the same product, to the same customer, via the same channel, won’t create value even with a new technology.

Funding: Any project requiring investment in the current environment is a challenge. The pandemic crisis has cut the cash resources for most airlines and travel agents. Despite the crisis, some airlines and travel agents keep investing because the new distribution channels, enabled by NDC, are more profitable.

Skilled resources: The transition to digital retailing first required a mindset shift from the management. Then the training or recruitment of staff able to manage API distribution and create new offers across multiple distribution channels. Last but not least, sales teams briefed and equipped to engage the travel agencies about partnership and value creation.

Contractual restrictions: Airlines and travel agents have signed distribution contracts with GDSs, which may contain restrictions or incentives preventing the implementation of alternative channels. Although the European Commission recently closed their 2018 GDS investigation about “possible restrictions in competition in the market for airline ticket distribution services”, such restrictions may remain a challenge today.

Technical solution: With the most advanced airlines having shifted 50% of their indirect bookings on NDC, the technical questions (scalability, look-to-book, polling, caching, etc.) are identified and discussed within technical industry groups. There is still a lot of progress and improvement to be made, i.e. innovation opportunities.

Innovation partners: A key benefit of an open standard for air travel distribution is that it allows new entrants to enter the market, to innovate and partners with existing players. Today there are NDC API providers, NDC aggregators and other NDC service providers (post-booking, etc.).

Incentives: Airlines have designed various distribution strategies and travel agents have elaborated content sourcing strategies to take advantage of the new content and fares. The current transition shows a mix of incentives, ranging from carrots (commissions…) to sticks (surcharges…). After the transition, value creation should become the driver between partners.

On-boarding: Airlines who have built their “distribution platform” are on-boarding travel sellers, either directly or through aggregators. This process takes time and will accelerate over time.

Differentiated content: The purpose of NDC is to enable  a new distribution channel, for airlines and travel agents, capable of supporting any kind of airline offers. This channel adds value to partners once content is differentiated, i.e. more than “airline code – origin-destination – date – fare”. Dynamic offers, where the product and the price are constructed dynamically, will leverage the channel and create even further value.

There are more challenges ahead. They reflect the ambition of the modernization of air travel distribution, the opportunities for new services and new entrants, and the reasons underpinning the time the transition takes.

 

What next?

 
Although I wish the transition moved faster, the current pace is probably right. NDC was launched as something that will and must happen, regardless of the timeline. Knowing that it would happen, the challenge was to make it happen as quickly as possible, but also as robustly as possible in case it lasts for another 50 years.

The next phase of the transition is about order management. The question is not “if” but “when”. The travel industry needs to accelerate the transition to order management if it wants to capture the full benefits of digital retailing. Or we may soon hear “Why is ONE Order taking so long?”.

 

 

What will air travel look like in the metaverse?

What will air travel look like in the metaverse?

In a famous interview in 1995, Bill Gates explained the Internet to Dave Letterman, the host of a TV show. Letterman argued that he could listen to the news on the radio and wasn’t sure why would someone need the Internet. Today, we can listen to the radio on the Internet.

As the metaverse is getting a lot of attention, including in a recent article by Johnny Thorsen, many are wondering if it’s another technology looking for problems to solve, if it’s going to be more successful than Second Life (the first attempt at a virtual world) and if it may have an impact on air travel (you can’t fly virtually, can you?).

Let’s understand first what the metaverse entails then let’s have a look into the current trials and a longer look into the future.

 

What is the metaverse? How does it relate to Web3?

My personal understanding of the metaverse is a term that covers computer-generated virtual worlds and the tools to navigate them. As such it is more than AR/VR tools, it is really a graphical interface layer on top of the internet, pioneered by developers of video games such as Minecraft and Fortnite.

In a related space, Web3 is the blockchain-based iteration of the Web, which was built originally on the internet. If you consider blockchain as a secured and decentralized evolution of the internet, designed to handle digital assets or tokens, your navigation layer is called Web3.

If you mix the two concepts – metaverse and Web3, you can visit a virtual world and handle digital assets in this virtual world. By digital assets I mean virtual properties, virtual currencies and other virtual goodies. Following this simplistic presentation of the new concepts, where is the link to physical travel and tourism?

 

Current air travel initiatives with the metaverse

The most recent example of current initiative is the airline Vueling that announced testing the metaverse to support customers will trip planning and to sell (real) tickets. They partnered with NextEarth, a platform in the metaverse, and Iomob, a mobility platform helping with the integration.

Another example is Qatar Airways presenting a virtual cabin crew, inspired by the avatars in the virtual world. This initiative focuses on giving the customers a taste of the inflight experience.

More airlines are exploring the technology based on their priorities: trip planning, product review, etc. Looking at the current initiatives gives us a hint to the future: the metaverse will be a new sales channel for travel and tourism, including air travel – like the internet enabled 25 years ago online sales, and 10 years later mobile phones enable mobile sales. Get ready for “meta sales”!

 

Looking into the future

The future of “meta sales” is two-fold: 1) reaching customers where they are and 2) showing the product to the customers.

As hundreds of millions of customers spend time in the virtual worlds they will come across people and brands, including travel and tourism brands.

In the case of a virtual world that represents the real world – like a digital twin of our world, think Google maps or Google Earth – the navigation in this world will lead to the digital twin of a hotel or of an airport. Airlines may want to offer a visit of their aircraft.

 

Next steps

It is difficult to predict how long it will take before we feel that it is normal to pay a virtual visit to a hotel and to an airline before making a purchase, like it is normal today to visit their website.

This exploration of the metaverse may seem to be a stretch as some airlines still need to fix the basic features of their mobile app. History shows us that new technologies don’t wait for everyone to master the old ones.

Most people and companies will probably adopt a “wait & see” attitude, while watching the pioneers who experiment and commenting from the side lines. As we’ve seen above, some players have already adopted the “test & learn” attitude. Indeed, the best way to predict the future is to build it.

One Order: The proof of the pudding is in the eating

One Order: The proof of the pudding is in the eating

One Order: The proof of the pudding is in the eating

 

NDC has transformed airline distribution. Well, while that particular statement can be debated for many hours, one thing that can be said is that it has changed the vocabulary of airline distribution.

 

The mindset of airline distribution has genuinely been transformed to think in terms of “offers” and “orders”, about APIs and dynamic bundles and so on. Indeed, many airlines are implementing these concepts in their distribution landscape.

But what has really changed, beyond some terminology? Well, for certain, airlines are thinking much more like retailers. They are thinking about the customer (purchasing) experience, products, bundles, segmentation, and they are thinking about how to get these into their distribution channels as offers – through NDC and their digital direct channels. The transformation of an offer into a sale of products is resulting in the creation of orders. However, most orders still rely on a system which also uses legacy artefacts such as PNRs, tickets and EMDs.

 

“Airlines become more retail-focussed, more confident in their capabilities as retailers and more well-equipped…”

 

As airlines become more retail-focussed, more confident in their capabilities as retailers and more well-equipped with tools to enable this, the more creative and ambitious airlines will become. More products in bundles, different products in different markets, integrations with providers of travel-related services that see the market developing as the technical obstacles of legacy artefacts are steadily removed from the equation. This gentle transformation is also driving changes elsewhere throughout airline organisations, as the knock-on effects of these begin to be noticed. Orders created within an order management system provide a vehicle for simplified settlement processes between sales channels (retailers) and the airlines as sellers. While the full complexity of airline revenue accounting, proration, BSP and other settlement flows cannot be eliminated overnight, the ONE Order accounting standards are enabling change. As the maturity of NDC distribution increases and orders become more prevalent, airline IT providers are presented with opportunities to bring further simplification, leveraging NDC and ONE Order. Providers of Order Management Systems (OMS) are now able to integrate directly with airline accounting systems in real-time, bypassing much of the legacy complexity associated with PNRs, tickets and EMDs.

However, there is more to being a successful airline retailer than creating offers, converting them into orders and feeding the fruits of these sales into the airline’s financial systems. At some point in time, there will be a customer who has expectations based on their wider retail experiences. The retail possibilities that airlines are now becoming exposed to go far beyond their own domain. While the additional bag will (hopefully) be visible at the time of check-in, and the lounge may be run by the airline, what about the pre-booked parking, fast-track security or the express train to the airport? The airline is unlikely to be the entity responsible for delivering the service in these cases, but the expectations of the customer are the same as when they present at the desk to drop off their bag – it should just work. However, interacting with all these new parties to ensure “it just works” is unchartered territory for many airlines. More and more, this involves pushing an order notification to the external service provider via the OMS to fulfil a service. Interactive two-way messaging related to order fulfilment is new. And, in the envisaged world where the PNR and ticket are superfluous, even the interactions with the check-in providers need to be brought into the era of APIs and open integration standards.

 

“IATA has anticipated this and has developed a set of standards within the ONE Order framework to enable the delivery of services using orders…”

 

In conjunction with airlines, vendors and other industry stakeholders, IATA has anticipated this and has developed a set of standards within the ONE Order framework to enable the delivery of services using orders. These messages can be used by an OMS to trigger the delivery by pushing information to the responsible party or can be used by delivery providers to pull the necessary information proactively. They can track consumption of services as well, which is key to triggering accounting and settlement processes. However, certification for ONE Order capabilities is still very light compared to NDC. While the certifications only may only be taken as a loose measure of maturity, it would appear that there may be a vast gap between what airlines can now sell and what (or rather how) they can deliver.

The reasons for this apparent mismatch are manifold and varied in their nature (technical, process-related, commercial), and some may be easier to resolve than others. What is more concerning though is the apparent lack of awareness of this mismatch among the broader industry. Great focus has been placed on promoting the need for modernisation in how airlines define and sell their products and services. However, there is still one key component that will become a challenge sooner rather than later – where the customer gets to seamlessly experience all those products and services that the airline invested so much effort in to get the customer to purchase.

The collaboration between airlines and their OMS partners is, generally speaking, mature, collaborative and based on a common understanding of business value and goals. The relationship between airlines and their ground handling partners is of a very different, operational nature and is often very cost-driven to extract the maximum value at the lowest cost. On the other hand, the relationship between OMS providers and ground handlers is non-existent in most cases.

Planning and executing the smooth delivery of products is key to being a successful retailer. Achieving this requires close alignment between all stakeholders: airlines, their OMS providers and crucially, the ground handlers and other partners, in and around the airport, in the air or wherever else they may be. So far, the focus has been on the selling aspect of retailing and increasing revenue and airline wallet share. However, if airlines are really to succeed as retailers, customer satisfaction will be determined by what, and how, they deliver. The proof of the pudding is in the eating.

 


Nick Stott, Travel in Motion

 

Last Call for Customer-Centric Retailing

Last Call for Customer-Centric Retailing

From this week, face masks are not mandatory anymore on European Union flights and airports (except in Spain and Italy), more than two years since the start of the pandemic. We may all feel like the pandemic days are about to be something of the past and that things are now getting back to normal. The truth is that some things may actually be changed forever. People worldwide spent these last two years adapting to the “new normal” and, although most of us wanted our lives to get back just as they were, some changes came with interesting challenges. It’s not just about people adapting to a new world. When people start to have new habits and think in different ways, the global market has to adapt as well.

One of the most affected areas was, without a doubt, the travel industry and now, two years later, things seem to be moving forward in a new direction instead of going back to the same place. Last year, online traffic increased by 11% in the travel industry, more than any other (ContentSquare, 2021). Airlines must face the reality of a changing travel experience in a post-pandemic world and create flexible solutions to meet the needs of the “new normal customer”.

change in online traffic of selected industries worldwide

The world was already on a fast-paced journey to digital transformation and the pandemic came to accelerate the rhythm of change. Many customers who were hesitant regarding online shopping are now comfortable with that new habit, and generations Y (millennials) and Z were already shopping online not only for plane tickets but for everyday things like groceries. These times, when the world stopped for a moment, brought much uncertainty, and a strong effort to strengthen digital solutions can be quite a challenge. Fortunately, many airlines are facing this situation as an opportunity and that can only lead us to an exciting future in travel.

 

Flying Above and Beyond Expectations

Customer-centric OTAs and travel suppliers are moving to the next level. Let’s take the example of Airbnb which just launched a new way of selling travel, based on the experience that customers are looking for. Or Amazon introducing a beta in the US to sell digital travel experiences. Airlines such as Southwest which was already leading in digital experiences just introduced additional mobile self-service options to enhance and personalize the customer experience along the travel journey. Travelers will be able to add for example an upgrade for priority boarding before leaving to the airport, instead of having to queue at the airport or call the contact center. All airlines understand now that their business model and digital ecosystem needs a serious revision.

flying above and beyond expectations

Imagine someone — we all know this person — who started a new job in this post pandemic scenario. What new challenges come to mind for this consumer who now has to create a whole office in the house? The journey has shifted completely. This person will spend some time on a thorough search for the right products and maybe find out some other products or services that were unknown before. There’s the space for recommendations where the store will gain the customer’s trust and loyalty.

It’s not just about providing the right product, the expectations are already high. The companies who manage to surprise their customers by going beyond are the ones who will win this innovation race. The companies who do this properly make their customer feel they matter all the time, and right in the device we all can’t seem to leave — the smartphone. It’s Amazon that lets you know your new ergonomic chair is arriving today, it’s the fitness app that sends you a notification that you haven’t been working out for two weeks, or any food delivery service that sends you a reminder that tonight is perfect to order tacos from your favorite place. When it comes to travel it shouldn’t be any less than this.

 

The Future Customer Experience Is Now

If we agree that the customer journey has severely changed with the last pandemic then it’s imperative for airlines to invest in extensive research on user experience.

Airlines could learn a lot from retailers that are investing in this customer experience more than ever, and it all starts with how much they prioritize user research. Tesco, one of the largest supermarket chains, realized how many customers were tired of commuting to the office in the city center because they didn’t have the ideal conditions to work from home. The result is that Tesco is now creating flexible office spaces inside their supermarkets. This is a clear example of companies that listen to the customer’s needs and provide solutions beyond expectations.

the future of customer experience is now

Concepts like innovation and flexibility have never been so crucial and, in the end, it’s all about who takes off quickly to this transition. The airline industry has been able to reach a certain level of modernization since the general adoption of the internet, however, this evolution is still deeply rooted in the same concepts and flows from decades ago. Low-cost carriers, for example, have been driving digital adoption and agile commercial policies, gradually augmenting their products. Even these companies are now realizing the need to move to the next level to remain relevant. It’s urgent to implement leaner technology and processes or rather to simplify and get rid of unnecessary processes.

The latest digital retail platforms, tools, and methods are getting increasingly important for airlines if they want to become true retailers. Air Asia aims to generate 50% of its revenue with non-travel / non-aviation related revenue by 2025. The ultimate goal is that airlines become completely customer-centric in every area. It requires getting away from legacy technology fast, which was built around transactions and not around the customer. This could mean the end of booking classes or fare filing and the beginning of a simplified and flexible process. Alongside innovative platforms travel suppliers will be ready to adopt existing next-gen services and, at the same time, guarantee a first-class ticket to future trends.

People want to travel, and only a few airlines have really used the pandemic to lay the foundations for the transformation journey and move with full speed – and low risk – to ensure they have a state of the art customer proposition. With additional challenges – and opportunities – that sustainability and new mobility models present there will be a lot of new players joggling for positions and some unforeseen ones such as rail becoming stronger again. At the beginning of the next decade, in 2030, we forecast a fundamentally different travel experience. If airlines do not grab the opportunities of digital retailing they risk increasingly turning into operating units for the players who will.


By Dario Martinho, Content Creator at Branchspace