Ai Video: Evaluating the pace of industrialization of NDC

First Published on 10th September, 2018

NDC schemas supporting a consistent interpretation of the standard, the availability of an implementation guide to support use cases and no major need for one to rework on the processes after implementing the 17.2 version have strengthened the case for going ahead with NDC.

The industry is gradually coming to grips with massive changes. An industry-wide as well as a collaborative effort is being made to ascertain what needs to be done to provide a more robust offer and order structure. The industry today stands at a crucial juncture as far as embracing airline retailing is concerned. Every step in the process is expected to bring in a change. For instance, NDC will continue to create e-tickets. “But once we move to ONE Order there will be no tickets,” mentioned Ian Tunnacliffe, Owner at IFT Consulting, who was recently in Bangkok and Phuket for Ai’s #MegaAPAC and #ATPS conferences, respectively. According to him, the majority of live NDC implementations are point to point. As for what to expect from here on, Tunnacliffe says, “NDC adoption will continue to increase slowly with GDSs driving the most growth. Also, the arrival of ONE Order will boost the take up of NDC but large-scale adoption is likely to be several years away.”

Tunnacliffe spoke to Ai’s Ritesh Gupta about the industrialization and mass adoption of NDC.

 

Hear from senior industry executives about NDC and ONE Order at the upcoming Mega Event Worldwide (Ancillary, Loyalty & Co-Brand Conferences) to be held in Long Beach, California (31st October – 2nd November, 2018).

 

 

 

 

 

Ai Editorial: Data – a key starting point in digital transformation

First Published on 3rd September, 2018

Ai Editorial: Data, along with airline-specific systems for both operations and commerce, IT architecture, the talent pool for an agile set up and emerging industry processes such as IATA’s One Order, can propel customer-centricity, writes Ai’s Ritesh Gupta

 

Are full-service airlines in danger of getting disrupted or their hub and spoke model would remain a robust safety net?  Are we doing enough as an industry to efficiently leverage data to manage customer experience and operational efficiency?

These intriguing questions have emerged over the years as various external factors have been impacting airlines, including their overall customer service and offerings for passengers. The industry has responded, even though the pace of change is questioned quite often.

Every aspect of customer-facing facet is under scrutiny.

Data – the starting point 

If today the airline staff finds it challenging to manage customer interaction in case of a delay in a flight’s schedule or fails to have a bigger say in the early stages of the booking funnel, it does indicate that the airline is struggling in today’s connected era. This is simply because passengers’ expectations aren’t the same anymore.  Why aren’t we in a position to provide similar or better experience as Uber?

“Data management is the foundation to managing personalized customer experience and increased revenues”, asserts Vijay Anand, Global Industry Leader for Travel and Transportation at IBM. Given the complexities involved in airline operations, he believes it is not fair to directly compare airlines with Uber although there are best practices that can be adopted from other industries.

When asked about loyalty, Anand said that in his view “loyalty in today’s context is quite different than in the past. For example, the next generation is not worried about tier status and miles/points. They are looking for instant recognition and instant rewards!”

Data key to experience optimization

So where do airlines stand, considering that they have to deal with disparate data sources, organization silos and even outdated processes/ interfaces that the staff at the airport uses to serve passengers? There are cases where passengers are more proactive in gathering updates and information about flights than the airline/airport staff.

“It’s a work in progress. The industry recognizes the importance of integrated data management and several airlines have projects in place to manage big data and analytics more efficiently. We are beginning to see Airlines leveraging data at various tough points throughout the passenger journey. With mobile apps, Airlines are enabling employees with the right information at the right time, which helps in both customer experience management and faster communications internally to ensure efficient operations,” said Anand.

Benefitting from a robust data strategy  

·          Paving way for operationalizing of data: The staff at the check-in desk or at the gate is being equipped with mobile devices to serve passengers based on their travel history, frequent flyer status, the name of their company, past experiences etc.  Airlines can focus on uniting all business rules and decisions, and workout a central hub for business decisions to be made at scale.

·          Personalization at scale: With continuous ingestion of data, airlines can count on artificial intelligence and decision-making algorithms to handle increased complexity. IBM Travel Retail platform uses machine learning as an integral capability for personalization, including shopping, buying and in-journey experiences. The platform learns in real-time on what offers were selected to better optimize price, promotion etc. The system automatically integrates data, learns by itself and reasons what to offer and this includes one’s propensity to buy.

·          Refining data processing for NDC: As airlines sharpen their ability to store and analyze large volumes of disparate data, how are they looking at understanding the search pattern even from their indirect channels especially in the wake of IATA’s NDC standard? Airlines with robust XML data processing capabilities allow multiple data sources such as Kafka log queues or packet level network traffic from an NDC system to be captured and processed for key IT and business data content that can then be fed into corporate BI environment. So by counting on search data, an airline can differentiate their offering – by being aware of the intent and what is of interest to passengers, digital teams can embrace rapid learning cycles and work on tailored offering for different channels. 

To conclude, so be it for personalization, improving customer service at various touchpoints or making the most of IATA’s standard NDC or One Order, it is all about putting things in order to improve the passenger experience. All of this is part of the same puzzle. For example, with profiles of passengers being refined continuously and order management system being the central source of truth, a passenger comes and shares the name at a touchpoint, and that is enough to service in the best possible manner – by being aware of the current flight, current order, servicing needs etc. The last interaction, be it for self-service kiosk or a customer service agent, is clearly documented.   

As for retailing, airlines can differentiate by playing a role, starting from discovering a destination to offering trip essentials. Airlines already have set up a strong partnership ecosystem. The key is to offer the right product in a personalized manner. It is imperative for airlines to fill up seats at a much better yield. Working on a two-sided marketplace would take time. But, yes such model where a traveller or a loyalty program member is offered a relevant product, including ones from the non-travel category, means the airline can benefit from a data-driven learning loop.  More they click and shop, more the airline learns about the customer.

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Why Amadeus believes timing is right for industrialization of NDC?

First Published on 28th August, 2018

NDC schemas supporting a consistent interpretation of the standard, the availability of an implementation guide to support use cases and no need for one to rework on their processes after implementing the 17.2 version have strengthened the case for going ahead with NDC, writes Ai’s Ritesh Gupta

 

Amadeus has been working on plans to industrialize IATA’s New Distribution Capability, an XML-based data transmission standard.

Focusing on the collaborative route to take the standard forward, the group has signed a spate of agreements in the recent past, including ones with American Express GBT, American Airlines, Carlson Wagonlit Travel (CWT),  and BCD Travel in a span of a week. The involved entities are focusing on new use cases for authentic standardization via a test and learn approach.

This route adopted by Amadeus is significant as requisite modern retailing capabilities can only be built on top of the NDC protocol provided it responds to travel providers and sellers’ needs. Amadeus acknowledges that progress made with the version 17.2 in terms of bringing into line the Offer and Order structures in the NDC schemas has set the tone for a dependable understanding of the standard.

“The industry today (when it comes to NDC) is far ahead where things were a year or two ago,” said Gianni Pisanello, VP, NDC-X program, Amadeus.

Laying a solid foundation for various stakeholders

Pisanello underlined progress on three counts.

  • Pisanello described version 17.2 as a “minimum viable industrializable” standard. “The introduction of this version was a big leap (last year). Most of the functional requirements (required) from both an airline and an agency’s perspective feature in it. This is the version that Amadeus is using to integrate with some of the leading airlines,” added Pisanello. “From version 18 onwards, the newly added features are going to be based on the IATA Airline Industry Data Model. It builds on the 17.2 standard.”
  • Second, Pisanello referred to the role of IATA’s data model and refining of the standard, “Any entity that has worked on implementations on NDC 17.2 wouldn’t need to rework on their respective processes and application logic. Instead the focus will be on re-mapping data elements from version 18 onwards. It is another significant development as the data model cuts down on the manual production of schemas. This is a constructive development as various data element concepts would follow the data model parameters.”  
  • Third, the industry has advanced in terms of standardizing the flow. “There is nothing to gain as an industry with different flows,” said Pisanello. He mentioned the issue of flexibility needed to be sorted. For example, one flow could indicate booking a flight first, paying for it and then seat allocation taking place. The other would allow booking a flight and seat, and paying them together to complete a transaction. “So the outcome is same, but the flow is different. Schemas are a set of words. Their use (as per the user’s discretion) was resulting in different flows within the same standard. Now with the Implementation Guide (features sample instances to showcase actual use cases), there is documentation in place to help a stakeholder move with their NDC project,” explained Pisanello.

With the standardization of the schema and the flow as well, is it a case of curbing innovation?

Disagreeing with the same, Pisanello said, “In fact, it is the reverse. By having a standard in place, the industry can create a lot of flexibility and creativity on top of it.” He referred to the role of 4G on top on which mobile apps such as Whatsapp or WeChat were crafted or the Internet which eventually witnessed the entry of Facebook. “Similarly, once NDC is established, the standard will enable the travel industry to innovate much faster how travel is sold and bought.”

Preparedness

Among the set of objectives, a key aspect of Amadeus’ NDC-X program is to ensure that NDC content is easy to access and compare. Initially, the focus is on a simple flow of “shop, order and pay” using the NDC standard. “Post this, the plan is to include the servicing capabilities that travel agencies need, such as the ability to change tickets, or to add ancillaries,” shared Pisanello.

“Once the schema and the standard are in place, airlines have to implement all the right features for the travel agency to do their job i. e. to fulfill the work and provide services to their travellers. Airlines not only need look at content and product offerings that they offer on their respective digital assets, but also at other areas that agencies need for their association with travellers. So in addition to shopping and booking functionalities, but they also need to incorporate vital features such as re-shopping capability,” explained Pisanello.

He added that another critical aspect of NDC would be the performance of airlines’ systems that can handle search requests coming in from various indirect channels. “A sub-second respond (from an airline) would be critical and if this doesn’t happen in the NDC framework then airlines would lose out (be not being present when an intermediary produces results when a user searches).”  Airlines are looking for systems that are interoperable, scalable and flexible, unlike proprietary applications used in the past. “We can deal with it (performance required from systems). We are operating on open systems. Our systems have developed real-time capability to process every shopping request, for instance, managing availability of seats in a particular fare class at a given point of time,” stated Pisanello.

Optimizing the offering for travel agencies

As for the workflow of the agencies, Pisanello mentioned that Amadeus from the early stage of its involvement in NDC conveyed it to IATA and airlines that if NDC is going to be tough for agencies to adapt then it can’t be industrialized. “(In such case) it won’t prove useful for high-volume transactions environment,” he said. “Now we see a number of airlines being committed to the same – American Airlines, Qantas, British Airways etc.”

“An aggregator continues to bring together suppliers’ content via a platform to agencies. We can deliver reach and sale whosoever the provider is. With NDC, the industry is upgrading capabilities – airlines working on personalization, relevant offers; aggregators can build offerings on top of NDC content and combine it in new ways; and agencies are essentially retailers. Agents would have varied content, along with their layer of personalization they would have strong opportunity in servicing their customers better,” mentioned Pisanello.

He added that it is important to understand the productivity of the agencies. “What sort of content is needed? There is a difference between the B2C and B2B environment. Whom are we servicing? It isn’t about putting the same content, even different agencies need different content. NDC has been created for agencies. Airlines can’t manage 100% of distribution via their .com or apps. The agency channel is a vital player in this mix, and who would facilitate and serve them the best is an area of expertise as well,” stated Pisanello, who added that NDC shouldn’t be clubbed with the commercial strategy of airlines, be it for the introduction of a surcharge or offering NDC commission to agencies. “These would have happened anyway. They are more of a function of certain carriers’ size and operations in a certain market,” pointed out Pisanello.

Pisanello expects existing infrastructure using EDIFACT and the one based on NDC to continue for years.

Amadeus is working on its web services product. It will aggregate NDC and non-NDC content, and this product is scheduled to be in production for piloting by online travel agencies. It will then be industrialized and enhanced with servicing capabilities. Worldwide deployment is being targeted in the first quarter of next year.

Gianni Pisanello, VP, NDC-X program, Amadeus is scheduled to speak at this week's #MegaAPAC (2018 Mega Event Asia-Pacific to be held in Bangkok, 28-30 August). https://lnkd.in/fTPx4xw

 

 

Ai Editorial: Focusing on collaboration in connectivity across travel verticals

First Published on 24th August, 2018

 

Ai Editorial: IATA’s NDC standard and ONE Order for product service delivery have an opportunity to partner with OpenTravel to be driven more holistically by working in conjunction with other verticals, asserts Matt Blackmon, OpenTravel Board Executive.

 

 

Undertaking one travel trip tends to involve offerings from various suppliers/ intermediaries, featuring ground transportation, flying with an airline, accommodation, car rental, tours etc. Even though travel e-commerce players have been expanding the basket of their offerings (for instance, airlines not only offer a seat and air ancillaries, but also offer other travel products), there are still gaping holes that need to be taken care of across the planning, booking and consumption phases of any travel journey.

 

And for this various travel verticals jointly need to find a way to streamline the entire experience.

 

“No one entity owns the customer today. The industry needs to look at a traveler’s journey holistically,” recommends Matt Blackmon, Client Solutions Architect, Switchfly and OpenTravel Board Executive.

 

Posing a pertinent question, Blackmon asked: Even as airlines are looking at modernizing their retailing and distribution capabilities via IATA’s New Distribution Capability, can the same standard be used for booking a hotel room? “NDC is an airline-specific standard. At this point one cannot sell a hotel room with NDC. OpenTravel’s Hotel 2.0 electronic message structure interacts with NDC as witnessed at hackathons.” Blackmon pointed out that the  NDC standard and ONE Order for product service delivery have an opportunity to partner with OpenTravel to be driven more holistically He mentioned that the travel industry needs to focus on maintaining interoperability for disparate systems in all segments of the travel industry.

 

 

Blackmon highlighted that OpenTravel diligently assesses the impact of every travel vertical in the journey of a traveler and has impacted the speed to market for this not-for-profit association, which publishes specifications twice a year. “OpenTravel, hotel industry associations (HTNG,HFTP etc.), IATA…all the bodies need to work together, in conjunction, and OpenTravel can leverage it’s 20 years of expertise of evaluating the process of interoperability and streamlining connectivity so that all business partners thrive. Airlines are evaluating the messaging protocol/ interaction and assessing how it would work in sync with other verticals in this industry. IATA NDC and OpenTravel are working together to find opportunities of doing just that so and evaluating  cross-standard synergies.”

 

Making it happen

 

There are a couple of areas that must be focused upon for this kind of industry-level collaboration to work.

 

·          One would be how to pass personal information of a customer in a secure manner.

 

“OpenTravel has discussed exploring the option of blockchain technology with multiple organizations across verticals. Not only for payments, but also for passing personal or storing information about a customer via smart contracts (to govern the access to such critical information). A key development going forward would be the participation of various associations, representing various travel verticals,” mentioned Blackmon.

 

·          Second, what sort of information can be shared among two suppliers that mutually benefit both in terms of servicing the customer (and even in a cross-sell for monetary gains)? At the same time, how to ensure that the comfort level of a supplier as far as sharing of critical data (for instance, 1st party data or data that contributes in working out a profile of a traveler) isn’t disturbed?

 

Blackmon pointed out that if an itinerary has several suppliers, then how can the data be shared to ensure value is added to the entire journey of the trip. “As an industry, we need to look outside of our own verticals and be open to sharing information to deliver a superior passenger or guest experience,” he said. “If you have a travel product/ service on ONE Order, can you see other (travel) products as a supplier?” He also underlined that areas pertaining to where data is being hosted and who all can have access to data are areas that need to be considered as part of the ONE Order initiative.

 

Owning an experience

 

As of result of such collaboration, the travel industry can look at owning the experience, rather than owning a customer in a fragmented manner.

 

“The travel industry if compares itself with the likes of Amazon or Uber, then it needs to learn how to market, personalize and create experiences. That’s what the latest generation wants. Uber capitalized on an opportunity that was around differentiating the interaction and elevating the experience in transportation. The industry should own the experience, akin to what Amazon focuses on. Amazon doesn’t own the distribution for everything that is has to offer. Rather it manages to push economies of scale and scope not only within their proximate company’s boundaries, but outside of it, too, by capitalizing on digital channels to build an ecosystem of buyers, partners and suppliers.” 

 

By Ritesh Gupta

 

 

Matt Blackmon, Client Solutions Architect, Switchfly and OpenTravel Board Executive, is scheduled to speak at the upcoming Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).

 

Follow Ai on Twitter: @Ai_Connects_Us

 

 

Ai Editorial: Preparing for distribution – NDC and beyond

First Published on 21st August, 2018

 

Ai Editorial: Other than assessing how the NDC standard is gearing up for industrialization and mass adoption,  there are plenty of areas that are demanding attention for airlines to optimize indirect distribution, writes Ai’s Ritesh Gupta

 

 

 

Airlines are increasingly counting on NDC to share their rich, distinctive product data with their indirect distribution partners.

 

This XML-based data transmission standard is paving way for airlines to make the offer once a request comes in along with the possibility of differentiating their brand through bundling and unbundling.  

 

Other than assessing how the standard is gearing up for industrialization and mass adoption, and ensuring relevant functionalities are in place for the benefit of the agency partners as well as travellers, there are plenty of areas that are demanding attention.

 

As the traffic comes in from the indirect channels, airlines can optimize their products. And for this carriers have to refine their XML data processing capability. This is important in terms of letting multiple data sources or traffic from an NDC system to be captured and processed for key IT and business data content that can then be fed into corporate business intelligence environment. Airlines should target actionable information from data projects based around technologies such as Kibana/ELK, Kafka etc. They have to process in real-time the potentially huge volumes of valuable search data from NDC APIs. Airlines need to collect and process the recent search data across all their channels.  They also need to have appropriate skills to analyse this data by market segment, formulate offers, set pricing and then adjust booking engine rules to deliver this at point of search. This has to be a continuously improving process of set the rules, analyse the outcome and adjust. In a NDC world this becomes dynamic, according to Triometric. Overall, by counting on search data (for who is searching or travelling, what their travel intent is, where they are in their planning/booking process, what might be of interest to them etc.), an airline can differentiate their offering.

 

Also, in order to optimize indirect distribution, airlines need to enhance their retailing, booking and servicing capabilities for their trade partners. For instance, Qantas chose to introduce a new platform to make its offers more attractive at the point of sale. This way the airline has worked out a mechanism to share images of cabins and meals, and also lets them offer air ancillaries such as extra legroom seating. The Australian airline availed the NDC standard and API technology to extend the capabilities, already worked for its own website, to travel agencies. This ways Qantas has gone beyond price, schedule and availability to craft better offerings for the indirect channel. From travellers’ perspective, there is recognition of the Frequent Flyer tier status, Qantas published and eligible private fares, branded fare rules, better servicing etc. It must be added that in this case the airline hasn’t worked on any graphical user interface.  

 

 

Another area of consideration should be API connectivity. It isn’t new but airlines still need to dig deeper while working on technical considerations and designing of APIs. There is an opportunity to boost the conversion rate via user interface (UI) level API. Specialists recommend offering a combination of both XML or server side request and UI widget. This means full UI all the way down through the technology stack is provided. The reason: when the UI and code associated with it enables one to continuously optimize the business and improve upon the attach rate along with the revenue metrics for that business which can be airline or any B2B partner that is taking the booking from travellers. In case, airlines use their own UI and only use B2B partner’s API, the partner may not able to influence the optimization of that UI.

 

 

How can airlines and travel companies make the most of their NDC strategy? Hear from experts at the upcoming Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).

 

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: NDC 17.2 – is it the solid foundation this standard was looking for?

First Published on 17th August, 2018

Ai Editorial: Buoyed by the introduction of version 17.2, IATA’s NDC standard is set to eradicate concerns pertaining to too much flexibility in the schemas. The promise of no fundamental redesigning of the schemas is a positive development, writes Ai’s Ritesh Gupta

 

The adoption rate of IATA’s New Distribution Capability or NDC has been under scrutiny over the last couple of years. As it turned out, too much flexibility in the initial versions of schema and implementations not being the same was one area that needed to be sorted.

The last year or so has propelled the status, especially with the introduction of NDC 17.2.

“It has set the tone for industrialization and mass adoption of the standard,” said a senior executive associated with a travel technology company.

NDC 17.2 (which refers to second update in 2017) has strengthened the initiatives that started last year.  

It has made progress in terms of bringing into line the Offer and Order structures in the NDC schemas to pave way for a dependable understanding of the standard. There have been enhancements to Shopping, Seats and Order Servicing capabilities. Another highlight was the deriving of the maiden data structure from a new Airline Industry Data Model (AIDM). “Progress has been made in terms of functional capabilities (that streamlines the workflow for the travel agency channel) and along with this added features are going to be based on the data model (an infrastructure undertaking for supervising the advancement of messaging standards development capability at IATA). This would help in further evolution of the standard in an automated manner,” said a source. The data model is expected to augment interoperability across the sector. Also, it will result in faster time to market of new or changed data exchange standards and relatively quicker utilization of the standards. Also, according to IATA, there has been removal or renaming of messages and additional schema enhancements and technical cleanup items.

No fundamental redesign of the schemas

According to IATA, the maiden message associated with the data model that appeared in 17.2 was related to Baggage Logistics and Conformance Services.

Release 18.1 contains new models for Offers, Orders, and Seatmap delivered by the NDC AIDM Alignment project as well as models describing aircraft semi-permanent data developed by a project building new XML messages.

Next release, 18.2, is expected to include all models developed as part of NDC AIDM Alignment as well as those related to ONE Order.

With this data model, each message development project can capitalize on current models formulated by other standards groups to generate interoperable messaging standards faster and with higher quality.

According to IATA, The Airline Industry Data Model (AIDM) is being positioned a single point of access to store:

·          Industry-agreed vocabulary

·          Data definitions and their relationships

·          Related business requirements

·          To generate interoperable, faster and easier messaging standards

“From here on, there won’t be any than any fundamental redesign of the schemas,” said a source.

This is a positive development as aggregators/ intermediaries like GDS, meta-search engines and travel technology companies had raised questions in the past. This was mainly owing to NDC messages being re-factored, resulting in a complex scenario.

“With sharpening of NDC schema description (schema are set of words that could be used in various ways and this was resulting in flexibility and in the eventual analysis different implementations), the utility of the implementation guideline (best practices for understanding the booking flows) and the contribution of the data model (to avoid the discrepancy owing to inconsistent definitions), the stage is set for a solid foundation to build on. There has been a synchronization at large among various stakeholders post the introduction of NDC 17.2 and what’s in store with versions (NDC 18 and NDC 19),” mentioned the source.

The NDC 18.1 features modifications incurred from the alignment to the data model and complete amendments from this initiative are set to be finished by 18.2, scheduled for release in the third quarter of this year.

“In terms of consistency, any update after 17.2 would have core functionalities of this version. So this means that an airline can skip immediate versions and straightaway work on a release after that since 60-70% of the functionalities would still be retained (say between 17.2 and 19.1),” explained an executive. This essentially points out to the fact that various data element names and concepts would follow the data model rules/ instructions rather than any core redesign of the schemas or the way they serve.

 

How is IATA’s standard shaping up? Hear from senior executives at the upcoming #MegaAPAC (2018 Mega Event Asia-Pacific to be held in Bangkok, 28-30 August). https://lnkd.in/fTPx4xw

 

Ai Video: Time for airlines to look beyond the “Where to Go?” option

First Published on 13th August, 2018

Be it for having a bigger say early on in the booking funnel to targeting the second wallet of the traveller, airlines are looking at transforming themselves to make the most of every interaction on their digital assets.

One of the relatively higher margin products that has gained traction in the recent past is the tours and activities segment. “When you think of your last vacation, (in all probability) more than the airline you flew with or the hotel you stayed at, you tend to think of what experiences you indulged in or the activities you enjoyed while being in the destination,” says Shane Mayer, Director of Business Development and Partnerships at GetYourGuide.

From financial gains perspective, Mayer added that this segment can result in “hotel-like commissions” for a travel e-commerce player (coming around a net margin of 15%). Around $130 billion in spent annually on tours and activities. As for selling options for airlines, they can opt for a white-label solution, opt for API connectivity or use widgets. “We on an average drive €10-15 to our partners per transaction,” shared Mayer, who also added that the company runs their customer service department in-house to serve the travellers.   

More than revenue generation, destination discovery is being seen as a big opportunity for airlines to overcome commoditization of their core offering. Airlines need to increase the width of their funnel to allow for a higher quality of user engagement. This can happen earlier on in the booking process by focusing on destination content and related inventory (be it for tours, activities transportation etc.), and via a layer of intelligence that ensures that airlines understand the preferences of travellers. “(It is about) extending your brand into a destination and shaping a trip into an amazing experience,” said Mayer.

 

 

Hear from experts about targeting the `second wallet’ at the upcoming Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).

Follow Ai on Twitter: @Ai_Connects_Us

 

 

Ai Editorial: Assessing the role of `small teams’ in digitalization

First Published on 31st July, 2018

 

Ai Editorial: American Airlines, SilverRail and Kiwi.com are making progress with their respective digital assets by counting on the talent and efficacy of self-organizing cross-functional teams, writes Ai’s Ritesh Gupta

 

There is one common aspect that stands out among those travel companies that have embarked on the path to digitalization. It is about the way they structure their talent pool in order to bring agile principles into their respective businesses.

 

Key to continuous refining of digital assets lies in empowering `small teams’. These self-organizing cross-functional teams focus on iterative development and are offered full ownership and accountability for what they work on. Be it for an airline of American Airlines size, an intermediary like Kiwi.com or a travel technology specialist in SilverRail Technologies, all these organizations have exemplified the prowess of such approach toward product development. Before understanding how these teams tend to function, let’s assess what these companies have achieved by structuring their teams this way:

 

·          Kiwi.com chose to offer a new functionality in NOMAD that would return the cheapest itinerary possible between cities on the dates that a passenger intends to leave and return. The algorithm finds and organizes flights for the user. So what over the years has proven to be a time-consuming and complex exercise for a user (since it can take multiples sessions to find the cheapest flight for different connections), now has been simplified. Kiwi.com asserts that there product does all the work and visitors to their site can reap rewards of the results shown by algorithm created by their team.

 

·          SilverRail recently came up with an outstanding breakthrough to simplify the rail journey for travellers before they even leave their place. The company played its part in enabling Virgin Trains to become the first travel operator to sell tickets through Amazon Alexa. So travellers can use their voice, via Alexa-enabled Amazon devices, and Amazon Pay for this voice-based transaction.

 

 

Making it work

 

In one of our recent interviews, Bill McKimm, Business Development Director, Thoughtworks, referred to the significance of being “agile” and how a prototype of a new offering is crafted with the least effort possible to be used for validated learning about customers. An agile development team works on such minimum viable product to a subdivision of their users to test a new idea, to garner data and doing so learn from the whole exercise. Also, the chosen architecture paves way for the development team to deliver rapidly.  As for how the structuring or a framework like Scrum to embrace agility work is as follows:

 

There is an executive who is responsible for finalizing a list of specifics/ functions that the desired product would need and accordingly, prioritize the work that needs to be done. There is a timeframe and updates that flow in from the team working on the project. There are reviews and room for improvement with work being done. The idea is to learn, adapt, get better and try again. From his own experience, Kiwi.com’s CEO Oliver Dlouhy says, “Innovative features usually require more work and polishing – you can still produce them incrementally, you even might want to get feedback along the way (prototype, beta, etc.), but you might release them once the increments work as a whole, fulfill the need and deliver the experience the customer shall receive.”

 

According to Dlouhy, incrementalism is harmful when confused with “doing only one-offs” or shipping half-baked products.

 

Agility is considered to be a mindset. Companies like Kiwi.com looking for honesty, transparency, openness, ability to quickly adapt to a constantly changing environment, passion for travel, efficiency, willingness to fail fast and improve in their employees.

 

SilverRail ensures the team is supported with tools and resources needed. A couple of other aspects that ensure people are empowered:

 

·          Gear up for swift learning through shorter cycles and constant delivery pipelines. In a blog post, SilverRail recommended that companies need to encourage teams to spot impediments and allow for time and aid to get them sorted. Plus, one should focus on capitalizing on the aggregation of marginal gains to garner exponential returns with minimal investment.

 

·          Another recommendation from SilverRail: Set up means for clarity so that teams are optimizing for the throughput of the system and not any specific or single part.  Cut down on short term initiatives that affect long term velocity and manage technical debt that has the possibility of expanding. Assess and quantity every aspect and set up a core set of key performance indicators that drive to the largest gains in velocity.

 

How can airlines and travel companies embrace innovation? Hear from experts at the upcoming Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).

 

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Video: Is technology inhibiting the UX of airlines’ digital assets?

First Published on 13th July, 2018

Majority of airlines are not agile enough and most are not willing to fail fast, thus they will always be behind until they change their internal processes to stay ahead of their customers, writes Ai's Ritesh Gupta.

 

What does being agile signify from the perspective of being user-centric?

At its core, UX is about creating ease of use. So being agile, being equipped to create compelling, relevant experiences across all touchpoints, devices etc. is must.  

Mike Slone, Chief Experience Officer, Travelaer says airlines need to act fast and ensure technology doesn’t prove to be a roadblock in their quest of being user centric.

Citing an example, Slone said, “Delta Air Lines offers a consistent UX.” He explained: “Below the engine” or working alongside their IBE or Internet Booking Engine, they are working with a lot of technology providers.” Technology has been developed in-house, too. “Airlines need to re-assess their technology requirements – they need to control the user interface and functionality on their digital experiences and often to do this they will need full control of their IBE, which most do not have today.”  Travel technology specialists should be able to assist and enable an airline digital team with their IBE, not provide them with an IBE. “There is a difference. At Travelaer, we are producing tools in a modular format via API or UI that will enhance the user experience for an airline, but we don’t always expect them to adopt our entire IBE. This is different than most travel tech providers that offer airlines everything or nothing approach.”

Also, UX isn’t equal to user interface (UI). There is a need to understand passengers’ journey, from the beginning of the trip idea. “The issue is that technology products across the customer journey are in different departments and there is no one person who owns the journey and not one (entity) who owns the technology behind it. For airlines to be successful, they need teams that think across the silos, go beyond them (silos) and integrate them. Often that means a digital transformation of sorts,” said Slone.    

Hear from senior industry executives about the significance of UX and being agile at the upcoming #MegaAPAC - Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Selling via a digital retail platform - how Ryanair is setting a new benchmark in travel?

 

First Published on 10th July, 2018

Ai Editorial: Why selling via a digital retail platform is an attractive proposition? Airlines can learn from Amazon about how to leverage economies of scale and scope i. e. to expand the basket of retail offerings plus letting other sellers use the same digital retail platform, writes Ai’s Ritesh Gupta

 

The connotation of selling has evolved considerably.

Why would one airline agree upon selling another airline’s flight when for years the two entities have considered each other to be a competitor? If a traveller is fond of reading a book, can an airline include this is an offer for an itinerary which features a seven-hour halt starting from mid-night?    

Selling today is about understanding one’s context, being aware of one’s preferences, and in case of leisure travel, it definitely has to offer a memorable experience. How can airlines get closer to selling this way?   

To make it work, there are several areas that need to click. The industry on the whole has to evolve – not only airlines, but also the offerings of travel technology companies and even the industry processes – so that an airline operates as agile, data-driven and digital organization.  

Following an ecosystem model

Outside of the travel industry, there are dynamics in the arena of today’s digital platform economy that demand attention from selling perspective. Selling as a single-sided market player is what airlines need to do away with. Rather there is a need to comprehend how digital economy works and this brings to the fore the significance of gearing up for a platform economy model.

“The traditional businesses (like airlines) are today disrupted by new players which are acting as digital platforms – two -sided marketplace. The nature of the business is so significantly different, that traditional players cannot compete directly in their current setup as single-sided market players,” said Marko Javornik, VP/ GM Mobility and Travel, Comtrade Digital Services. He added that these new players have taken a significant value away from the traditional players in all traditional industries.

The reason for this is that the digital platforms are commoditizing as well as bypassing the traditional players.

“Some airlines have finally understood that they can take the same tool and get their own share of the digital platform economy. Some will decide to go bold like Ryanair decided to go – trying to create a top level B2C platform and create an ecosystem of retailers around it. Some will go different route. There are different ways how airlines can create or join an open travel ecosystem. However, if airlines do not have a digital platform strategy on their own (even if it is a B2B only), then other players are taking away the advantages and slowly reducing the value that comes to the airline,” said Javornik.

“The essential idea is that airline uses it’s unique physical touchpoints, existing digital touchpoints and its brand to build a digital platform strategy. This will probably not be a direct competition to the winning platforms of today, but rather facilitating secondary marketplaces that will balance out the strong powers of the current winners,” he said.

The example of Ryanair

What airlines can learn from Amazon is how to leverage economies of scale and scope i. e. to expand the basket of retail offerings plus letting other sellers use the same digital retail platform. So why an airline would sell another travel company’s offering? Of course, for revenue generation, but also to bring into action a data-driven learning loop. “This way you know that customers like what you are offering them and you know that in the future, they will like it even more because you learn with each data point. It is a different thinking than it was used in building traditional IT systems,” said Javornik.

The journey of Ryanair, which started few years ago, is an example of how the airline is going strong with their digital platform economy through their “Amazon for Travel” program based on the MyRyanair platform.

“Ryanair was one of the first airlines that understood the power of digital technology to disrupt the existing business model. For airlines, the fundamental component of this is single view of customer, which is basically what MyRyanair is. This is modelled in a way that provides immediate benefit to end users, which is why the users like it and use it,” said Javornik, who added that the platform has over 43 million members and is proving to be an excellent foundation for Ryanair to start focusing on its digital assets. 

“The platform provides an improvement to the user experience of the existing core services that Ryanair provides. However, the future potential of this platform is enormous and the value will grow with time,” he said.

“Ryanair understands that digital assets will count a lot in the future, maybe more than physical assets. Having a large number of active users is definitely one key metric. Lifetime value of users is another one. While at the beginning both numbers will look small compared to the winners of digital platform economy that really is misleading. Here we are talking about an additional business that brings new revenues and profits to the core business which is put under pressure. And the core business can uplift the digital platform with a pace that simply does not work for digital only players. You just cannot compare oranges and apples. In fact, you should look for the differences and then take advantage of them,” explained Javornik.

Citing an example, Javornik referred to digital advertising. “The profit garnered may be small in comparison to what Google and Facebook earn at this juncture. However, if an average airline can make additional €5m or €10m out of digital advertising on top of its core business as pure profit, this can be a very big thing for the airline.”

Traditional ways of selling are being challenged and displaced by ecosystem models in which organizations compete and collaborate across multiple fronts.

Hear from senior industry executives about the significance of running a digital platform at the upcoming #MegaAPAC - Mega Event Asia-Pacific (Ancillary, Loyalty and Co-Brand Conferences) to be held in Bangkok, Thailand (28-30 August, 2018).

 

Follow Ai on Twitter: @Ai_Connects_Us

Editorials

  • Ai Editorial: How agility is playing its part in payment optimization at KLM? +

    Ai Editorial: A tailored payment infrastructure and the structuring of team internally, where multiple teams working in sync within an agile environment, paves way for payment optimization at KLM, writes Read More
  • Ai Editorial: Working out an apt infrastructure for payment optimization +

    First Published on 21st September, 2018 Ai Editorial: Airlines intend to take steps to control their payments strategy holistically. This gives them visibility into  payments in all their sales channels Read More
  • Ai Editorial: Use of app cloners and machine learning rises in mobile commerce fraud +

    First Published on 17th September, 2018 Ai Editorial: Considering the growth of mobile commerce, it is imperative for travel merchants to assess how fraudsters are crafting new techniques and tools Read More
  • 1
  • 2
  • 3
  • 4
  • 5