30th October, 2020
Ordering a product while reading something in a messaging app or email, using palm to complete a transaction…retailers must gear up for fast emerging possibilities.
Payment specialists and other stakeholders focused on streamlining the digital shopping are trying to keep pace with what consumers are looking for - easy, quick and secure commerce. For example, higher contactless limits or facilitating instant buys within emails and text messages, to support recovery plans/ campaigns.
Certain trends like contactless payments or dynamic / interactive emails that support a transaction as well, aren’t new. Merchants are used to offerings like crafting an abandoned cart dynamic block, using event data, within a flow email. But as digital commerce and payment specialists dig deep to ensure shoppers feel at ease novel initiatives continue to emerge.
Visa has highlighted that consumers are choosing PIN-free technology for their everyday spending. The company has processed more than half a billion additional touch-free payments, where previously consumers would have needed to use a PIN pad, since contactless limits were increased in more than 29 countries across Europe.
Recently Amazon shared plans for a contactless way, Amazon One, for people to use their palm to make everyday activities like paying at a store, presenting a loyalty card, entering a location like a stadium etc.
And the likes of Discover and Mastercard are already looking at SRC specifications. It being asserted that SRC gives every merchant “the ability to offer the Amazon experience”.
As for using existing channels, Google to is working on plans to let Gmail users view real time product options and checkout from inside email.
Specialists working with airlines have been working on various aspects, be it for interactive content, selling ancillaries or simplifying the checkout experience. A couple of examples - SeatAssignMate connecting email content to the airlines’ PSS system in order to streamline in real-time data. EveryMundo has partnered with Uplift to integrate monthly payments within airModules. Partners can now display installments with their fares to make travel even more accessible.
Travel merchants need to prioritize and gear up latest e-commerce related developments.
By Ritesh Gupta
16th September, 2020
Key aspects of airline indirect distribution including GDS surcharge, distribution of content, booking flow of shop, order, pay etc. are being assessed in Europe.
Post the recent deal between the Air France-KLM group and Amadeus and the news of Lufthansa opting to hike GDS surcharge by 30% or so, the timing as well as the nature of the same is being probed.
Commenting on the recent Air France-KLM and Amadeus deal, experienced airline distribution and technology executive, Ann Cederhall said, “Private channel is not a new concept and kudos if the administration of the deals can easily be managed by the airline. The agent will in the private channel get a discount on the GDS surcharge and only pay a few euros for the NDC content, this is a first as I see it.”
“What would be interesting to understand is how much better the content is and is it worth paying for. Another observation is the parity, that the access will be the same as for any other intermediary or GDS,” said Ann, who added that a significant part of NDC is about control, in the GDS the airlines have little or no control mechanisms. As for the GDS and the agent community. She said, “My understanding when reading the article is that Amadeus takes the step towards becoming an aggregator and the assumption here is that it would allow any integration the agent requires e.g. a low-cost airline? The whole purpose of using an aggregator is the ability to integrate any content of choice. Slightly worrying in this release are the comments on how "there may be agents struggling with the content and servicing of the content.”
The industry has questioned the timing of Lufthansa’s latest move. On Lufthansa’s move, Ann said, “The hiking of the LHG surcharge is bold but might be the right timing to do so as they strengthen their role as the forerunner of disrupting GDS distribution. It will be most interesting to follow this development especially as SQ are rolling out their program simultaneously.”
“Any move towards servicing the customer in the whole digital journey is a step forward and I look forward to following this development with interest,” said Ann.
By Ritesh Gupta
11th September, 2020
The Air France-KLM group and Amadeus NDC distribution deal is under scrutiny.
“What does it mean for different stakeholders?” and other aspects like the link between a surcharge and new content are being evaluated.
Commenting on what it signifies as far as NDC and indirect distribution is concerned, Alexander v. Bernstorff, Director Airline Solutions, InteRES said, “We are in year 10 of AFs NDC efforts. 12 years after Lufthansa paved the way for airlines to leave the full-content model with their Preferred Fares Model, it appears airlines are still in the process of managing GDS commercials and signing parity agreements. That’s somehow weird as NDC was meant for airlines to make more relevant offers to consumers and also to finally solve the issue of ridiculous complexity, particularly when it comes to changing a booking.”
Von Bernstorff pointed out that seemingly there aren’t any suggestions as to the nature and quality of content delivered through this pipe, plus it doesn’t look like the complexity issue has been tackled: “they say it will take until 2021 for sellers to even have access to that content (albeit at an undefined surcharge) and well into 2021 for providing servicing features, he said. “Hold on – NDC provides for a significantly simplified re-shop process, so where is it?”
But what von Bernstorff finds most striking is that Amadeus has obviously not yet realised a “primary integration of Altea and Navitaire into the Amadeus travel platform for NDC content”, as Robert Buckman of Amadeus says.
“My call-to-action for airlines is to not follow suit with financial models, but instead to build capabilities that can help them differentiate and improve consumer experience. And this has nothing to with NDC – a generic commercial strategy is needed badly in these most uncertain times. The good news is: tech providers like ourselves are ready to go!” concluded von Bernstorff.
By Ritesh Gupta
Interview with Ernst Hemmer
9th September, 2020
How can the travel industry make the most of novel finance and shopping-related activities that have emerged or strengthened over the past six months or so?
This must be assessed as travel brands chart recovery plans, looking at avenues that can trigger a transaction by being present on non-traditional travel marketing touchpoints.
Can a fintech app be a new channel for customer acquisition? How can frequently used superapps remove payment-related friction?
The fact digital activity has risen this year owing to the demand for contactless/ touchfree interactions, and much of it is related to paying for frequent bills, utility buys, personal finance etc., travel companies must look into opportunities that come along with such evolving behavior. A lot is being said about how consumers, especially the Millennials and the GenZ , are saving money, trying out new payment options etc.
“There is a clear redefinition of the retail banking and payment space taking place, where platform apps and neobanks are offering digital-only banking and payment options,” said Singapore-based senior travel industry executive, Ernst Hemmer.
Looking at “painpoints” and capitalizing on them
Hemmer highlighted that consumers are growing increasingly frustrated with legacy banking service providers, and traditional banks are being challenged.
“The new, post-Covid, economy is accelerating this trend toward digital-only payment modes. This provides both opportunities and challenges for travel e-commerce merchants. There are challenges in regulatory requirements to be overcome, and there are opportunities in expanding ways in which travel is purchased and in flexible terms of conditions and payment,” he said.
Consumers have been worried about various aspects of their lives, and even not satisfied with several activities, as Hemmer pointed out. And those companies which are looking at better solutions can be new allies for travel. “Travel e-commerce players need to have a thorough understanding of their (limited) place in the customer’s circle of purchase points around daily needs. Travellers not only buy travel products, but they also need to assistance with paying bills, sending money, buying online, and managing expenses,” mentioned Hemmer. He referred to the role being played by fintech apps and superapps:
Possibility of strategic investment by travel giants
Established online travel players have invested in car hailing and superapps in the past.
So does Hemmer foresee any investment in consumer fintech apps in the near future?
“Investing in new lines of business is a challenging undertaking, even for established online travel players. It requires long-term technological investment, brand development, as well as significant legal efforts and regulatory requirements to be addressed. Fintech apps will face the same challenges as established OTAs do when it comes to introducing new products or services. Organic growth is not for everyone. Instead, those who have the financial strength will likely look down the acquisition path as a way to expand business lines that support further access to the full circle of purchase contacts of their customers, including acquisition of some fintech players,” explained Hemmer.
As for how the fintech apps are expected to approach travel content, he said the likes of buy now pay later specialists can build content such as travel products, and promotions. “There will be opportunities for these apps to expand into travel, however it’s likely this will need to come through partnerships with travel providers and OTA’s, rather than from building travel as a core product,” he said. For example, Grab, Shopback, Rebatemango, have all smartly embarked on this partnerships route, mentioned Hemmer.
Explore payment-related trends at the upcoming Airline Travel Payment Summit - ATPS Virtual Conference 2020
Date: 20 - 22 Oct 2020
12th August, 2020
Travelers are seeking additional information and it is up to travel companies to boost their confidence, writes Ai’s Ritesh Gupta
Travel recovery depends on a lot of how safe one feels about the next trip, and this is in addition to a number of other aspects that one generally considers before finalizing an itinerary. Airlines and other travel e-commerce players are adjusting to the realities of how to serve consumers across all the phases of a trip.
E-commerce specialists must work on the blend of content, tools, UI, UX etc. to ensure relevant details are provided just when needed. These include areas like – How safe is a particular location? How can one prepare for a trip and what is mandatory? Can I get a refund in case I decide not to go ahead with the booking? What does Force Majeure on my travel policy cover me for?
Airlines are doing their bit to encourage travel. For instance, Emirates is offering free global cover for COVID-19 medical expenses and quarantine costs should they incur these costs during their travel.
The entire booking flow needs to be refined. Some pertinent points are:
Related video - Impact on travel e-commerce’s digital product strategy
Airline Travel Payment Summit - ATPS Virtual Conference
20 - 21 Oct 2020
The ATPS Virtual, co-hosted with UATP, is dedicated to the payments and fraudprevention strategies needed for airlines and travel-related businesses to survive.
30th July, 2020
27th July, 2020
Interview with Ann Cederhall
Airlines have struggled with the cash flow and liquidity-related issues over the past three-four months. As the entire industry focuses on recovery campaigns to stimulate and capitalize on travel demand for revenue generation, what to expect as far as indirect distribution is concerned?
What is going to happen in the following areas: the focus on pushing for more bookings via NDC content and cutting down on the “traditional” bookings; NDC indirect sales and 21/20/20 target; the equation between full-service airlines and GDS etc.
Ai’s Ritesh Gupta spoke to experienced airline distribution and technology executive, Ann Cederhall. Excerpts:
Ai: How do you expect airline indirect distribution, especially for full-service airlines, to shape up post crisis?
Ann Cederhall: Observing the response of certain entities in the traditional PSS/ GDS and the distribution landscape during the ongoing crisis, there are ample indications that these players are not agile enough. They are not able to adjust appropriately to a crisis.
Hats off to ATPCO for delivering a waiver in three months but will we yet one more time find it acceptable that the systems we work with require this type of lead time?
In the other corner are those fighting for the old tried solutions and who keep reiterating that NDC does not work.
So, this crisis has made the divide wider and to each side proved their points. But the crisis has most likely required airlines to look into and question their processes and the cost associated. The biggest problem for traditional airlines is that they never change processes, functionality and the way they do stuff meaning that they endlessly build on top of legacy processes instead of asking questions such as what can be removed. I have rarely come across airlines who look into what is the profit versus cost of codeshare, complexity in fare rules and fares distribution, one example that I often mention is the need to benchmark lowest fare on the Internet, is that worth the cost when 70-80% of all corporate fares are private anyway?
The low-cost airlines with relatively simple structure are not impacted by distribution in any different way than before the crisis, on the other hand they are probably well prepared to create products that match the needs of customers like refund value going into travel banks, they are not hindered by the traditional distribution landscape and can focus on loyalty and new functionality attracting customers. An example is Wizzair who offer a higher refund value if the refund goes into its travel bank.
Ai: Considering that airlines are trying to chart recovery plans and, in this context, they would be ready to take as many as bookings as they can from any channel, what sort of impact it will have on focus on differentiation, cost of distribution etc. that is essentially associated with NDC content/ distribution?
Ann Cederhall: Airlines are focused on getting bookings and not going to initially care where that booking is coming from. Airlines are also constrained by their reduced workforce and the main focus is not going to be on the cost of the booking. Those airlines who are more mature will be trying to create content that is unique and fits the context of the new world they are selling into. Reducing risk for COVID19, adjusting where/ how they sell their solutions based on the channel. I can't stress enough how airlines have failed to understand the total ecosystem and have focused on their own channel; this is a mistake. I find it remarkable that you still have mid and back office solution designed based on a GDS PNR. The times are gone when the GDS is the single source of truth, this is not possible in a digital world where content must be aggregated irrespective of how it is sold.
My personal view is that so much time has been wasted in NDC initiative by not focusing on what does matter such as:
Airlines must be able to provide their data for free or at a low cost via a modern API that the airline owns and controls together with airline partners to enable tech developers to drive innovation, cost should not be an encumbrance.
· NDC should have focused on Corporate Customers and TMCs and drive innovation in the mid and back office space, if these agencies and tools are GDS centric it clashes with the customer requirements.
· NDC should have lobbied and worked for mandating communications between systems, they should have from the start been looking into how can an airline sell its content to e.g. another airline at a reasonable cost, you should be free to sell your content from your PSS in a cost-efficient way.
Ai: GDSs are critical to the adoption of NDC. What sort of response do you expect from them when it comes to tech and commercial aspects of working with full-service carriers?
Ann Cederhall: GDSs have their own business model and it often conflicts with what the airlines want. In the end it is the distribution network that suffers. Solutions from the airlines have to plug into existing solutions/ paths with the GDSs. More and more everyone is going online - so TMCs and OTAs who have a single interface going to multiple systems are more aligned to accept other channels.
However, they have been somewhat reticent and lack some of the expertise to do this effectively. Those that do succeed, will no doubt find additional content and pricing being made available to them. The question is whether changes can be made to the very traditional GDS business model to find a meaningful way forward? Then I think there will be a paradigm shift especially if newer 3rd party solutions begin to mature and plug into these channels as well complimenting and eventually building its own self-sufficient ecosystem to manage bookings and deliver true Door to Door servicing for a frictionless traveler journey.
Ai: Going back by six months or so, it was being highlighted that 21 airlines had committed that by the end of 2020, 20% of their indirect sales will be made using NDC i. e. 21/20/20 target. What to expect on this count?
Being able to service, provide more revenue opportunities and meet the needs better of the travelers across all channels is where we are lacking. Volume will of course put more money and attention here, but true vision is what is needed. There are those who still discount NDC altogether. They are not wrong with their comments about where it has failed to meet expectation, but I think they are wrong about their conclusions that it will never work. I don't think it is the right time to even have a target, the need for a better customer experience should be the focus instead rather than setting goals.
I am a firm believer though that a direct connect should be a booking made through your host system and visibility of that booking in your host, or maybe we will see the day where the whole concept of PSS changes, for what is it more than reservation and inventory, couldn't the rest just be systems operating services?
Ai: Talking of the power balance, considering the role of GDS in distribution, how do you expect the equation between full-service airlines and GDS evolving in the next 18 months or so? What will happen to the focus on distribution featuring NDC content via one API?
Ann Cederhall: The NDC concept was alive before NDC even with ITA and G2. The GDSs however fought back, and only now are adopting it a bit more readily. However, they are in this to make money too. Those who can find a way to update their solutions to accommodate NDC and existing pathways, will find they that will continue to stay relevant. As we see more and more business shift from one GDS to another, there will be a definitive change in the ecosystem. Having said that, the real change I still predict will come from 3rd party solutions who are able to plug into the ecosystem. To support this change, GDSs SHOULD, ensure that they have platforms that can successfully manage NDC content along with other APIs to 3rd parties as well.
Interview with Alexander v. Bernstorff, Director Airline Solutions, InteRES
16th July, 2020
Airlines and travel tech companies have witnessed the need to serve millions of concerned and even peeved passengers during the pandemic.
This had to be done for changing previously issued tickets, refunds etc. The industry responded, for instance, with the introduction of automated emergency flexibility solution. Did automation work? Overall, how did the industry fare? Is this the right time for airlines to transform their business model at this juncture in order to become a retailer?
Ai’s Ritesh Gupta spoke to InteRES’ von Bernstorff about the same. Excerpts:
Ai: How do you think the industry on the whole has managed to respond to passengers?
Alexander: The industry has done a poor job in responding to passenger needs and the main drivers of complexity are still prevalent. As long as traditional carriers are not willing to abandon the concept of a fare, a ticket and an EMD, changes of any kind will never be handled without friction. Airlines are telling me that supporting ticketless air travel means a one-year project to them and that’s not much time in airline IT project terms. So why have we not been seeing a massive increase of ticketless travel over the past years, especially as NDC, an airline-driven project, has been suggesting ticketless from its very beginning in 2012?
Our industry cannot progress as long as we’re implementing NDC based on EDIFACT and Teletype. Unfortunately, that’s what we are seeing all around.
Fares and fare rules have gotten so complicated that even costly automated tools are subject to errors and also cases they cannot process at all. How can we expect the customer to understand and deal with such an amount of complexity? Modern OOMS solutions like the InteRES Airline Retail Engine are built to process business logic for changes and refunds as a service (aka NDC), thus enabling a superb user experience of simple shop and re-shop and complex re-issues are made obsolete. OOMS is an offer- and order-management system; by separating NDC and ONE Order, a situation was created where airlines are looking for offer-management and order-management as separate solutions. The problem with this is that airlines and vendors designed offer management based on the existing order management process, i.e. PNRs, fares, RBDs, tickets and EMDs. And what now? They are looking for vendors with modern order management systems (based on ONE Order) and find that their offer management and a modern order management are not compatible.
From a consumer’s perspective the problem is that airlines are not willing to approach the various elements of complexity because the customer is not at the heart of an airline’s thought process. As a result, passengers still have to manoeuvre through a jungle of ticket conditions (not always very logical rules…), often requiring help from the airline’s service centre.
Ai: As a travel tech professional, what according to you is the biggest lesson from this pandemic?
Alexander: At the moment we can see many airlines launching just another cost cutting programme and innovation may be blocked (again) for many years to come – with user experience still way behind “normal” modern digital e-commerce.
There is an opportunity for those who act now in order to build state-of-the-art, durable digital systems and processes - ideally jointly with partners along the travel value chain - that are not only addressing customer expectations (and thus help to differentiate from the competition) but will also be much more cost efficient.
Ai: As you say, the Corona crisis is like a magnifier for so many structural problems. How can airlines better prepare for any pandemic or any situation?
Alexander: Digitalisation is the key. The current sheer amount of manual interaction between airlines and their customers (and this flows through the whole value chain and many travel agents are more than frustrated) puts light on the shortcomings of missed digital renewal.
So instead of introducing frictionless (and far less costly) online servicing capabilities, consumers have to deal with a mess. It has never been more obvious that the underlying processes have to be simplified, and thus also the systems supporting these processes. These kinds of projects are not very popular with airline executives but after they managed to postpone digitalisation for a decade or two, it’s now the time for some heavy-duty plumbing. And although after the crisis this will not solve immediate problems, it will be the enabler for future adaptations of an airline’s business model, service offering and user experience.
Ai: Do you recommend airlines focusing on transforming their business model at this juncture in order to become a retailer? If yes, why?
Alexander: Yes, and here are the reasons.
First and foremost, renewing their business model will help airlines to look at their customers and the processes and technology serving their customers differently. Airline managers have been discussing the customer journey for many years – with no result. No wonder, as still desktop and kiosk and mobile are approached as completely different animals. For a retailer, post-mobile is imperative and it could be a refreshing experience for many airlines.
Beyond a different approach, the need for ancillary revenues beyond seats and bags is obvious. In average, airlines offering more than just a flight seemed to have more cash when the Corona crisis began compared to their traditional competitors. However, traditional commercial systems cannot properly handle services that are not directly fulfilled by the airline. Necessary enhancements take ages to implement and are costly. Next-generation offer- and order-management systems like our Airline Retail Engine, combined with real dynamic pricing capabilities based on enhanced pricing models, are the way forward.
In addition, and as sad as it may be, middlemen like some tour operators will not survive the crisis. Airlines now have the opportunity to step into offering hotel and tour content and consumers will appreciate their local or regional competency and cherish content curated by their preferred carrier.
Ai: How does this bring NDC and ONE Order into the equation? How to build new, modern e-commerce and online servicing capabilities?
Alexander: During the past year or two I am seeing the discussion around NDC and ONE Order go crazy. When we started out, the idea behind was a different one than performing a simple technical upgrade, i.e. put an XML layer on top of the existing EDIFACT process.
NDC and ONE Order are 2 x 50% of the whole game. Combined, they enable airlines to design, implement and run modern, digital systems and processes and – over time – to replace or to discontinue many or all of the existing complex legacy systems. In addition, they allow airlines to communicate with the entire industry using modern industry standard data formats, e.g. between airline and a third-party city tour provider. That being said, NDC and ONE Order deliberately do not come with “best practice” or dedicated systems.
Ai: What do you mean by redesigning the process?
Alexander: The change process in particular has to be modernized. Simply put, as a customer I want to exactly understand what the change conditions, i.e. exchange and refund, are. This is not the case today for airlines using the traditional process based on hard-coded fare rules, the dependency on tickets and EMDs, the distinction between change and cancel and the necessity in certain cases to perform a past-date-cross-check. Remember that when we started NDC we deliberately refused to having a “servicing task-force” because we wanted to get rid of the current craziness. Unfortunately, we have not seen any implementation where a change is a service.
Now what’s important with NDC and ONE Order is that these data formats are well designed to support a simplified, user friendly process. There are other ways of doing it, but we should not waste or time with discussions if NDC is the rich data format if we haven’t come to the point where we want to increase customer satisfaction.
Ken Segall, Steve Job’s creative advertising director for about twelve years, says that simplicity is what made Apple so successful, because “Complexity is what frustrates employees and confuses customers”. Anecdotally, airlines – at least some of them – believe that mastering an ever-increasing complexity is what makes them successful. “Too many people are brought into the process, more levels of approval are created, more research is demanded and, as a result, it becomes more difficult for common sense to prevail.”, says Segall. But it should be the other way around, and Steve Jobs knew that: “Simplicity was the lens through which Steve Jobs observed everything. In the pursuit of simplicity, compromise was never tolerated.”
9th July, 2020
Striking improvements – be it for improvising or overhauling existing processes – are being suggested in the travel domain.
It is interesting to evaluate how specialists in various disciplines, including ones featuring in core operations of airlines as well as digital commerce, are counting on this phase to prepare for the future.
- Counting on external data for scheduling decisions: Iztok Franko has highlighted how scheduling decisions are being advanced owing to the uncertainty, and the role of agile analytics with which one can blend available external data with internal, historical data.
For more: https://diggintravel.com/agile-travel-analytics-external-demand-data/
- Cart abandonment: Shreyansh Durgesh, too, referred to agile analytics and how the same along with domain-specific expertise can help in bringing down cart abandonment rate. How to work on an optimized checkout process and cut down on abandonment rate?
Follow Ai on LinkedIn: https://www.linkedin.com/company/airline-information/?viewAsMember=true
11th June, 2020