Ai Editorial: Why only NDC + One Order isn't enough for digital CX transformation?

First Published on 29th June, 2018

Ai Editorial: Airlines can't focus only on IATA's NDC distribution standard or One Order to attain customer-centricity. In addition they need to break organizational silos, leverage data and set up CEM platforms and go for adaptive IT architecture as part of their journey to become digital organizations, writes Ai's Ritesh Gupta  

 

Being ready to serve a passenger as per their intent is what today’s organizations are after.

Comparison between airlines’ offering and any product from a retailer, say a book or clothes, is unfair. Clearly, planning, buying and the consumption of a travel product is a prolonged journey. Even the day of travel when a traveller goes to the airport, the time it takes to board the flight, in-flight experience etc. is unique. Plus, a traveller has multiple avenues to get in touch with an airline. And the fact that airlines, especially full service carriers, have been using legacy IT set up and airline-specific systems and associated processes for decades, coming to grips with digitalization isn’t a straightforward task.

The stage has reached where the whole business model of running only logistics operations as an airline is also being questioned. Digitalization starts a radical change in organization culture. Eventually people and processes are put in place to embrace rapid learning cycles, empowering autonomous teams to innovate and validate at speed – be it for the product offered or the way customers are served in an omni-channel environment.

So how are airlines getting ready to embrace digitalization?

From personalization’s standpoint, Chris Eite, SITA’s VP Passenger Services says, “Certain carriers in the Asia Pacific region are undergoing a big transformation.” Referring to the example of Singapore Airlines, Eite said, “This (transformation) is starting to get reflected in terms of impacting the look and feel of the way an airlines treats me. It is a huge leap as it indicates that such organizations are starting to use the data they have lot more than what they have done in the past.”

The journey of personalization

A key component of how transformation results in customer-centricity is the combination of IT set up and data collection, processing and eventually offering insight via relevant dashboards for various disciplines (such as marketing, customer service etc.) to use for decision-making.

In their endeavor to come up with a passenger experience that considers context and real-time response, airlines need to count on computing power, data storage, and open-source frameworks. Eite acknowledged that airlines are looking beyond the legacy set up and gearing up for modern commerce and omni-channel service. Focus is on how data about customers is being garnered (CRM, loyalty, PSS etc.), it is being processed via a customer experience platform, say working in conjunction with CRM, to deliver a differentiated experience. “Some airlines are starting to focus on differentiation. This impacts the customer in a meaningful manner and in turn results in retention. (By acting on data), airlines are starting to move insights into operational systems. Biasing is starting to happen, for instance, in terms of seating on the aircraft,” said Eite. “Within a frequent flyer program, higher lifetime value is being identified and accordingly biasing some form of the product, driven by data analytics.”

As for going deeper into identifying and delivering a personalized offer/ service at every touchpoint, say at the airport, Eite mentioned that even if data dexterity is attained by being a digital organization, it doesn’t mean that systems managing key operational facets like departure control systems are going to change overnight. “These systems – reservation, DCS – the way they are handled is still sort of cumbersome.” Overall, the way flying tends to happen and the way airlines manage the journey – from check-in to boarding gates to in-flight, they have certain processes, the systems reflect that. “How IT can streamline all of this (processes that handle a passenger at the airport), supports all the data that is available and then how IT additionally paves way for treating a customer in a non-commoditized way would key going forward,” he said.

Eite acknowledged that if on one hand certain carriers in the region are making diligent efforts to gear up for today’s connected era, there are others that aren’t even gearing up to leverage their digital assets optimally. “If we talk of NDC, one key aspect is to be in control of the offer being pushed to the indirect channel. But airlines in APAC need to introspect and assess how they are doing the same via their own .com or app?” Eite mentioned there are carriers in the APAC region that “hardly seem to be knowing about their passengers, there is lack of personalization and are offering same offers not considering the type of traveller, their context, who is accompanying etc.”  

Improving selling and servicing – not just about transformation

In order to be in control of the offer and serving the way passenger intend to be served, airlines not only have to transform themselves, but they also need support from technology providers as well as the industry processes such as One Order that are being planned.

Airlines are assessing opportunities about how to optimize their inventory and work out data-driven offers. In addition to air and non-air ancillaries, retailing platforms and B2B connectivity have positioned airlines to target the second wallet. The possibility of moving merchandising, pricing, scheduling and availability out of the PSS in order to create an offer that is under the control of the airline.  

Eite mentioned that there are other issues that aren’t only necessarily about operations vs. commerce aspects of a PSS.  

He shared that revenue management systems are not well equipped to cater to increasing number of ancillary options that airlines offer today. These systems fall short of delivering real-time dynamic pricing options without disrupting the booking flow. And the flow is an integral part of ancillary sales success.

“The industry is struggling with RM at this juncture (in terms of managing ancillaries). So if ancillaries are contributing 30-40% of the revenue generation, how RM as a discipline has responded to the same,” said Eite. “RM is starting to respond – improving upon the forecasting around total revenue per passenger and evaluating profitability per passenger with the product being unbundled.”

In terms of progress, the industry is counting on predictive analytics for ancillary pricing by taking into account traveller type, price point, timing etc.  

It is interesting to assess how the entire industry is enabling airlines to dynamically create and price bundles of itineraries and ancillary services at a transactional level.

“Also, a lot of airlines have been going ahead with a “me too” approach with their ancillary selling. Each carrier needs to assess impact of ancillaries on profitability plus how systems such as revenue accounting get impacted, how the interline world works with ancillaries and unbundling,” said Eite.

Another area that highlights complexity is in the nature of contracts plus the lack of appetite for risk (to go ahead with relatively young technology companies) in this industry. One reason that airlines don’t come across as agile retailers is owing to the fact they are averse to going beyond one tech provider. For instance, airlines need to partner those Internet Booking Engine (IBE) companies which are investing in API’s that allow airlines or partnering software developers to build their own user interfaces or applications on top of their outdated IBE’s.

“Also, when you consider NDC and the concept of One Order, one of the complexities is to work around the interline world especially when the emphasis on direct selling,” said Eite.

One Order removes the current booking, ticketing and miscellaneous document records and combines the content of those into a single retail and customer focused order, according to IATA. But switching over to One Order will affect operations, including reservations, ticketing, customer servicing and revenue accounting areas. “In addition to interlining it is important to assess how One Order would streamline the concept of Super PNR (a record consisting of all the different bookings) and tie the whole travel experience around it,” said Eite. IATA has worked out three solution architecture for One Order environments and envisioned transition paths to move from the current PSS record-based environment. So the challenges would include switching from the current data model built around PNRs, ETKTs and EMDs to the new data model built around orders plus dealing with interline between airlines using current and new processes.

“In case of no changes there are  hardly any issues, but if changes have to made into a trip itinerary (which contains bookings related to hotels, car rental, excursions etc.) owing to weather, technical issues at the airline level or even when the traveller changes plan, then One Order will streamline the process, but it would take time to happen,” said Eite.

Augmenting indirect distribution

Airlines need to find ways to support fragmented distribution.

As much as they can find brand agnostic travellers and high yielding travellers from indirect channels (via search engines or GDS companies), there is also need to ensure they refine their API connectivity. So be it for conversational commerce or the emerging blockchain technology, enabling technology for them to pursue would be APIs.

A couple of areas where airlines can improve:

  • Evaluate the option of offering UI level API rather than extending XML or JSON level API.
  • Airlines need to sharpen their respective XML data processing capabilities. 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 that has been around for nearly six years now?

Many pieces of puzzle need to come together

So for airlines to attain customer-centricity, it is imperative to not only transform themselves by breaking organizational silos, embracing customer experience management platforms and adaptive IT architecture. But equally important is how the entire industry evolves and complements proactive airlines in their quest to serve the passengers in the best possible manner.

 

Chris Eite, SITA’s VP Passenger Services 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: XML data processing – how airlines can get it right?

First Published on 26th June, 2018

Ai Editorial: Airlines are investing in infrastructure to make data usable in real-time and at scale for search and analytics use cases. But there are significant challenges in processing and surfacing XML data which needs to be in place to pave the way for actionable business intelligence. Ai’s Ritesh Gupta spoke to Triometric’s Jonathan Boffey about the same. 

 

Digital organizations count on data as a core asset in their quest to serve their passengers in an earnest manner in today’s connected era. It is imperative to not only act on 1st party data, but also ones emanating from non-company owned sources, including 3rd party distribution partners, to deliver a consistent offering.

Airlines, as an industry, too have been gearing up for the same.   

For airlines, the journey of being in control of their own data and making the most of it hasn’t only been about breaking organizational silos, embracing customer experience management platforms and adaptive IT architecture. Carriers have also acknowledged the need to modernize airline-specific systems and legacy processes. One tangible result that needs to come out from such massive transformation is the understanding of travellers’ buying preferences, what is being searched for, the most popular destinations etc. The available intelligence has to pave the way for improved airline network planning and revenue management, airport route development and travel-related marketing.

Airlines’ data processing capability 

A testament of any successful digital or technology transformation is the intelligent information that comes from transformed data.

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 that has been around for nearly six years now?

It is vital to assess how airlines are counting on various data sources and focusing on real-time processing. 

“Airlines need to sharpen their respective XML data processing capabilities,” asserts Jonathan Boffey, Triometric‘s SVP for Business Development.

According to Boffey, the capability should 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 such as QlikView or Open Source big data technologies such as ELK.

As for how Triometric is playing their part in preparing airlines for the same, the company promises to deliver via their new offering, Trio Data Engine.

The Trio Engine initiative brings together a number of key technologies that will greatly improve the chances of airlines trying to deliver actionable information from data projects based around technologies such as Kibana/ELK, Kafka. Pentaho and QlikView amongst others.  

“For airlines, it (Trio Engine) can process in real-time the potentially huge volumes of valuable search data from NDC APIs.”

Significance of search data in a digital economy

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,” says Boffey.

Boffey also highlighted that by counting on search data, an airline can differentiate their offering for several reasons.

“Firstly for ‘right price’ reasons, everyone is using recent booking history in their RM system to predict the probability of getting another booking.  That has nothing to do with how many people are actively searching and potentially not booking.  Secondly for ‘right product’ reasons, you need to understand who is searching or travelling, what their travel intent is, where they are in their planning/booking process and what might be of interest to them. Most if not all of this information can be gleaned from analysing search data,” said Boffey. Overall, counting on search data, airlines can diligently become a part of a digital economy. 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. 

On how airlines are looking for a deeper insight from the indirect channel, Boffey underlined that is there is low search data availability for GDS-based distribution channels but with the NDC channel share growing that will change and this is the opportunity.

Dealing with ELK and budgeting properly

ELK is acronym for three open source projects: Elasticsearch, Logstash, and Kibana.

Kibana is an open-source data visualization and exploration tool used for log and time series analytics, operational intelligence use cases etc. It is known for features such as histograms, line graphs, pie charts, heat maps etc. Elasticsearch is an open-source, RESTful, distributed search and analytics engine and Logstash is an open source, server-side data processing pipeline that ingests data from log file sources.

As for specific initiatives, Boffey mentioned that whilst some airlines still view NDC analytics as next year’s project, the advanced airlines are starting to deploying open source solutions such as Kibana-based reporting but struggling to get meaningful results.

“Kibana is an attractive reporting interface but the “garbage in” challenge still applies when it comes to what it has available to report,” he said.

Boffey continued, “Logstash is the data collection part of ELK. It provides great support for standard server and website log file formats which is fine for the brand.com direct channel.  In the NDC world, you need to pair and convert XML based requests and responses into actionable business intelligence. The ELK stack doesn’t handle XML well.”

According to Triometric, real-time Trio Engine can be used to solve the XML processing problem and feed an ELK stack so Kibana delivers on NDC.

“Open Source technologies such as ELK have apparently low entry costs but the devil is very much in the detail.  Toe-in-the-water style approaches to ELK or other open source technology based projects that lack proper planning are not an appropriate approach to solving this serious data crunching challenge.  Big Data requires heavy lifting.  A clear plan and sizable investment is required - Airlines need to budget properly for it,” said Boffey.

Role of AI in data processing

Boffey summarized and mentioned that today the main focus is still on collecting the right data and getting it processed into a usable form for largely manual decision making process.

“Make the decision and take an action – that’s where the ROI is.  There is a lot of interest in AI technologies.  AI is the automation of processes that in this area will include analytics and related decision making.  AI means more data can be processed and more real-time tuning of systems and that translates into dynamic offer optimisation and revenue.  It all hinges on having the correct data approach. Whilst there is an element of ‘walk before run’, the opportunity for the advancing airline is pretty clear,” concluded Boffey.

 

How airlines are going about their data strategy?  Hear from senior industry executives 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: Counting on user interface level API to optimize conversion rate

First Published on 18th June, 2018

Ai Editorial: Travel e-commerce players need to optimize their respective APIs, assessing aspects such as user experience, design, usage guidelines etc. to come up with the desired results, writes Ai's Ritesh Gupta

 

API connectivity in the arena of travel e-commerce isn’t new but airlines still need to dig deeper while working on technical considerations and designing of APIs.

This is a significant issue considering the fact that airlines, like other travel suppliers, have been widening their distribution reach over the years, letting B2B partners access their inventory and sales systems via APIs to step up the average order value or target the “second wallet”. If a passenger is on an airline site or app, and there is an opportunity to cross-sell a product by showing images/ videos of the ancillary offering and make the shopping frictionless, then it would end up benefiting all the stakeholders – the passenger, the airline as well as the B2B partner.

Boosting conversion rate via UI level API

If a B2B partner has an API to offer to airlines, there are a couple of possibilities. For one B2B partner, API could be an XML level interface that can be handed over to airlines for implementation from this partner’s systems to the user interface (UI) staff of the airline. Certain players don’t go along with this approach when working with airlines or any other partner. Rather they offer 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.

An example of the same would be CarTrawler offering UI level API rather than extending XML or JSON level API.

So, for example, in case of Ryanair’s platform, all of the options related to car-hire, pre-booked taxis, coaches etc. that a user comes across is based on CarTrawler’s code running on the airline website. CarTrawler ensures a seamless experience for the visitor by working in conjunction with the Ryanair team to connect the B2B travel technology platform’s coding to the airline’s shopping cart. So if a customer adds a car hire into the shopping cart on Ryanair.com, it would be CarTrawler’s code implementing the user interface and the same is working in the background on the airline-owned platform. Eventually CarTrawler uses the airline API to put the product into their basket.  

 

 

Other technology specialists, too, acknowledge the efficacy of UI level APIs.

In case of Travelaer, the company’s Chief Experience Officer Mike Slone shared that  the company’s API provides a JSON interface for easier usage with modern Javascript frameworks.

“It is user interface friendly as all business logic is handled server side by our API layer - API and backend layer. Users of the API can concentrate on UI and presentation. This allows less travel-centric developers or developers who don’t have a background in the travel industry to spend less time trying to figure out how travel technology works and more time on creating a better customer experience,” shared Slone. Overall, the company is focused on producing tools in a modular format via API or UI that will enhance the user experience for an airline.

XML connectivity

Slone added that XML is not very UI friendly as it is hard to parse, it is more resource intensive so should be avoided client side.

“Usually you need to have some kind of translation layer to translate the XML into JSON for better integration (on the) client side,” he said.

“So the airlines using NDC XML should invest in some translation layer like our API layer that would help them build great UI/ UX with short time to market and sound client side performance.”

There are other areas, too, that demand attention. For instance, deriving business intelligence from search and booking streams and transactions or while working with several intermediaries, ascertaining what sort of requests are coming from a particular intermediary. All of this has to be looked into during the designing stages of an API and this will only propel the distribution initiatives of an airline.

 

How can airlines and travel companies make the most of their respective APIs? 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: How Kiwi.com intends to simplify an interlined itinerary?

First Published on 11th June, 2018

Ai Editorial: Kiwi.com is on the verge of introducing a new webpage form where consumers just fill in where they wish to go rather than filling information in different tabs. Ai's Ritesh Gupta spoke to Kiwi.com's CEO Oliver Dlouhy about how the team planned and executed this new search page.

 

E-commerce organizations, including ones from the travel sector, today are focused on being "agile entities". One of their core strengths is their organizational culture and how teams work in unison.

The culture is all about encouraging the team members to experiment, let them fail and always strive to improve upon their digital interfaces, be it for their .com or app.

These organizations avoid quick wins, adopt a fail-fast attitude and are part of a culture that supports curiosity, learning and problem solving.

New concept of search page at Kiwi.com

Booking an air ticket for multiple destinations can be a laborious task. Virtual interlining specialist Kiwi.com has been assiduously looking at ways to simplify an interlined itinerary. The company asserts that every virtually interlined itinerary is covered and guaranteed to get the traveller to their final destination.

So what's new as far as the core product i.e. flights is concerned?

According to Oliver Dlouhy, CEO and Founder, Kiwi.com, his team has been working on plans to launch a new webpage form where consumers just fill in where they wish to go rather than filling information in different tabs. A traveller would share names all of the cities and dates on Kiwi.com's interface. The results would feature a sequence of flights. The order of bookings is recommended to optimize the budget. 

It started as an idea to have a search-page like no other in the industry, shared Jakub Skopec, Senior Manager - Airline Partnerships, Kiwi.com.

Skopec said, "As an experiment, Oliver and our designers created a new concept of our search page from scratch in various iterations. Along the way, a couple more people were added to the loop devs, product and project manager. Oliver's ask was to move fast and still take it as an experiment, so qualitative user-testing went on even during development.  Feedback from the users has shown that the concept as a whole is a too much of a change to digest, so, actually we decided to deliver selected parts of the concept in smaller parts – incrementally." 

Skopec said, "We started with a clean, new, look of search, and built on top of that. Adding Rooms, Cars and Holidays to the homepage, ability to put a flight into favourites in case you want to compare and return to it quickly or explore more destinations, share your flights via social media to motivate your friends to come with you, or searching by points of interest (e.g. Berlin Wall or Grand Canyon) so you don´t have to look for the nearest airport, we serve you up relevant and informative results, saving you the bother. All of the above features originated in the new concept, but are tested in an A/B test and will be delivered individually."  

Taking through the journey of development of this new search page, Dlouhy shared that once there is a feature project launched the UX designer makes sure to invite to the table everyone involved - the Product Manager, UX, Customer Service, Marketing, Analyst, and other stakeholders - depending on the project.

"Gathering requirements and insights from all of these parties is important to enable the designer to frame the problem we’ll be solving and understand also what we don’t know - what blocks us from executing the project. UX Researchers help here with filling the information gaps through various set of research activities. Once we know what problem is to be solved the designer can start exploring ways to solve the problem - typically through a digital user interface but the solution can be found elsewhere too. Loops of concept tests and user test ensure that we design the right thing right," shared Skopec.

Taking complexity out of travel via agility

Dlouhy says Kiwi.com's offering is "super-complex" and "will never be finished".

To keep pace with the same, the staff count has risen considerably over the last two years and there are 350-400 members in the IT team.

So what qualities does Kiwi.com look for in employees?

"(We look for) honesty, transparency, openness, ability to quickly adapt to a constantly changing environment, passion for travel, efficiency, willingness to fail fast and improve," shared Dlouhy.

He added that there are numerous things in the organization designed to make people work together, collaborate and interact.

"Office space, tools we use, encouraging various workstyles and best practices/ guidelines, and key is clear and concise communication across the company," said Dlouhy.

A couple of examples on product delivery level are Product Managers and UX sitting with or close-to Dev teams, office space where project teams can sit together, open and public project channels on Slack, shared docs and definitions, the organization structure itself and many more. No proxies, no silos, more of a matrix structure where everybody can talk to everybody freely and openly. 

Development cycle

Continuous refinement of product means teams are eyeing agile, quick development cycles.

For Dlouhy, agility is a mindset.

He says Kiwi.com (or Skypicker previously) was born agile – without people collaborating, focusing on delivering working software, relentless focus on customers and ability to adapt quickly a start-up could not survive, not to mention grow like it did.

"So now the recipe is simple – try to avoid anything that would disrupt progress and growth and identify tools and agile practices that will help us to achieve and make sense to people using them," he says.

It is being pointed out that if organizations end up settling for commodity-level task for incremental enhancements then it won’t serve the purpose. Don’t incentivize the team to progress only for quick gains. So is Dlouhy for mindset of “incrementalism” or against it?

"I think “purpose” is the keyword here. Let´s say you want to optimize a product – shipping improvements often shortens your feedback loop, enables you to learn, adapt, get better and try again. 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. Incrementalism is harmful when confused with “doing only one-offs” or shipping half-baked products," he says.

 

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 Editorial: Fragmented distribution - must for airlines to sustain their existence

First Published on 5th June, 2018

Ai Editorial: Airlines need to find ways to support fragmented distribution, rather than continuously drifting and ending up with a precarious situation where one player in Google ends up controlling the whole travel value chain, says Bobby Healy, CarTrawler’s CTO.

 

Airlines need to assess how emerging forces such as conversational commerce enable them to break the threat of monopoly. An opportunity in this context is API connectivity.

“When you consider Facebook Messenger or Tencent’s WeChat, these are strong ecosystems in which Google doesn’t have a monopoly (in conversational commerce). Airlines should work with players that will sell their product via a conversational interface. It is a far more fragmented ecosystem and not controlled by one player. Airlines need to stick to fragmented distribution, as is the case now, but they need to be guarded against the future,” said Healy, who added that the concept of Alibaba’s Fliggy storefront or Tencent’s WeChat mini-programs are much better and are quite different from transactional platforms of today. 

Other than conversational commerce, Healy also referred to blockchain technology. “These could be small opportunities as of now, but over a period of time any new distribution platform that airlines find is not controlled by one player they should pursue it. And enabling technology for them to pursue would be APIs,” he said.

Healy added, “If you look at what Google is planning, then there would be no more flights booked on the airline-owned websites. The role would be restricted only for operational notifications and logistics-related conversations with passengers. Google are close to having that vision. Airlines could end up paying more than $50 per booking in 10 years’ time if they keep on going in the direction as they are moving now.”  Healy further said, “A way to mitigate the same is to provide relevant travel products – hotels, car rental, insurance, activities etc. In fact, Ryanair has shown the way, open to offering flight comparisons featuring other airlines.”

The logic behind working out a marketplace like one that by Ryanair would be to retain the customers on their platform even if they sell them some other flights. In a way a platform that connects end users to other systems that provide them important services. The value of the brand will largely come from technology that enables seamless, frictionless, user-centric transaction. 

Considering the way digital economy works, it is being asserted that airlines that will focus only on core business will not be able to survive outside of niche markets. Core business has become commodity and yields no profit.

The role of airlines from being a supplier to a platform operator needs to be contemplated.

NDC – playing into the hands of Google and meta-searchers? 

Referring to IATA’s XML distribution standard, Healy mentioned that NDC certainly helps, but doesn’t make integration any easier. It does improve the capabilities of an airline to distribute their products better.

“For me, the biggest winner from NDC would be companies like Google or Skyscanner. Because eventually it is going to help these players come up with a better proposition for the consumer. It (NDC) doesn’t help them technically (so many versions of NDC XML APIs) but for Google, Skyscanner and KAYAK it is not difficult to implement airlines’ APIs that is bread and butter for them. So NDC doesn’t reduce their effort (as of now) in a way that they really care about. But, overall, NDC plays into hands of the meta-search. Because in the end, rather than showing just price comparison, they end up showing product attributes as well. Only price comparison is a barrier to a meta-search being valuable to travellers,” said Healy.

Healy mentioned that airlines still need to look-out for new trends, such as API connectivity paving way for sharing of relevant information or bookings within the interface consumers are operating in. “Conversational commerce is going to drive a lot of changes. The younger demographic is going to use it and that is going to be powered by intermediaries – Google, Amazon, Skyscanner etc. And they will initially build themselves because they have APIs to their content. Over time airlines would need to refine their APIs to support conversational commerce. An API like NDC is nearly everything that you need in conversational interface – may be additional functionalities could be cancellation that are needed at an API level,” said Healy.

Chatbots are still in the initial stages, and haven’t solved painpoints in a big way. On voice activation software in the travel industry, Healy mentioned that it is currently capable of answering simple questions like the status of a particular flight. “In a decade or so, we will see the rise of micro-transactions carried out in a conversational style completed through a voice operated interface.” So airlines need to prepare for such developments.

Expect a lot of changes in the next decade. It is being projected that mobile apps would be slowly replaced with chatbots that enable constant human-like conversation with passengers. Every customer journey will be different. The more data you will have and the more systems you will have in your digital ecosystem, the better proposition you will have for your customers. The value of the brand will largely come from technology that enables seamless, frictionless, user-centric transaction. Airlines need to gear up for the same.

 

Hear from experts and assess the journey of airlines 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: Personalising destination discovery – an opportunity for airlines

First Published on 1st June, 2018

Ai Editorial: Destination discovery and associated experiences is one area where airlines haven’t excelled in a big way. Airlines need to play their part in shortening the research phase of leisure travellers, writes Ai’s Ritesh Gupta  

 

Travel suppliers, including airlines, are looking at various issues to have a say early in the booking funnel. This way passengers would have a stronger brand affiliation, plus the probability of targeting the “second wallet” would go up.  

For this to work a lot of introspection is needed. Some of the issues that are being contemplated are:

·          If booking a flight isn’t only about price and destination but also timing (say weekend vs. weekdays) and social context (family, individual, colleagues etc.), then how the same is reflecting on an airline-owned channel?

·          Are travellers “converting” faster on platforms such as Airbnb.com when compared with an airline or a hotel site?

·          What is the likelihood of a traveller opening an app from Google or a 3rd party app rather than the airline they flew with when they arrive at a destination?

Destination discovery

When a user ends up on an airline-owned site, there is an immediate need to come to grips with one aspect – what is the traveller looking for? Is it a leisure trip or a “bleisure” one? The ideal situation would be to generate enough data within your own user ecosystem to truly understand where and why people are planning to travel.

Airlines have to focus on pre-booking engagement. The options presented to the user shouldn’t be merely about “where to go” (what if this option doesn’t come into the picture in the first interaction at all!).

“Airlines have had poor representation in this arena (the pre-booking phase) and have handed over the advantage to 3rd party sites,” said Matt Walker, Chief Storyteller, LikeWhere.

And when the main curators of the pre-booking phase happen to be players like Google, Facebook etc., the threat of these players going deeper into the booking funnel is worth noticing.

“We (airlines) are past the stage of avoiding them (Google, Facebook etc.) altogether,” said a source. “Airlines have to focus on their brands and their platform strategy to have a bigger say. The likes of Ryanair, Southwest…haven’t relied on Google in a big way. Association with Google can’t be overlooked, especially for certain areas, but direct engagement needs to be focused upon as well. Being dependent on 3rd parties is a problem, the future is dark then.” 

The art of recommending it right

“What is the consumer actually consuming – is it car hire, airline tickets, hotels etc. or experiences in a destination?,” questioned an executive. “Clearly destination discovery and associated experiences is one area where airlines haven’t focused upon, and even if they have via say a white label travel publisher, it hasn’t really shortened the research phase of leisure travellers or enabled them to get closer to taking a decision regarding their destination, the experiences they would like to indulge in and subsequently the likelihood of booking with airlines.”

This is where companies like LikeWhere are stepping in, trying to build a bond with travellers via knowing about them “on the fly” (even without any previous history of knowing them). So the core idea is to offer what is being termed as “smart travel content”. It is presented by a layer of intelligence that ensures that the content shown would complement a traveller’s likings.

“Lifestyle preferences and lifecycle timing are the two metrics of customer relevance in digital,” says Walker.

LikeWhere focuses on personalising destination discovery and eventually enables airlines to position themselves for the main booking/ancillaries. 

As for how LikeWhere does it, Walker refers to the onboarding process that could last 15 seconds or so, akin to the Netflix does to its users. A user wouldn’t start with typical “from” to “to” tabs, rather share interests/ preferences and then recommendations would ensue. “We ask you about neighborhoods (specific places) in your city, and that accesses our own meta-data. When say 5-10 lifestyle preferences of a user are identified, these are matched to neighborhoods across the world. Once we establish certain parameters with a customer we use machine learning to add value, through informing more contextual recommendations,” shared Walker. “We analyze cities, interpret how they feel in human terms, then match the right location to the right customer.”

Is it too late?

If one searches for “ATP World Tour Finals 2018 London”, which is scheduled to take place from 11-18 November, there is no simple way to book around a complete trip including tickets for matches, hotel, airline ticket etc. It remains a fragmented experience. There are attractive packages for the tournament – hospitality packages, private suite at the venue but nothing more. A site, https://www.tennistours.com, came close to offering a travel package but the link didn’t work! This was after browsing top 10 links on Google. So a disjointed shopping experience continues. It is worth watching how travel technology specialists crack this conundrum. Also, since airlines didn’t figure in the search on the first page, how many airlines are in a position to understand that a traveller is visiting London for a reason and offer a relevant package? So in this case, an airline should target the purpose of the trip, come up with suggestions/ tips that enhance the stay and then inch towards the first part of the booking, which could be an airline ticket or even the main experience that the customer is looking for.

Other than content, airline can also bank on the devices being used. For instance, the mobile phone is a highly personal device, and offers an opportunity to capitalize on certain innate features, such as location. Also, as mobile becomes the primary device and since users don’t like to search on it (easy to mistype, to make mistakes), airlines have to preempt what users are likely looking for, based on their context, and bring them relevant content from the moment they access their devices. Based on the intelligence garnered from the device, plus a host of other signals, one can expect a suggestion for a dinner (say the app is opened at 7pm, so the first recommendation is triggered according to the context).

Airlines need to increase the width of your funnel to allow for a higher quality of user engagement. This can happen earlier on in the booking process. The "engine room" of search and booking may be tough to change from the outside-in. That doesn't mean that airlines can't experiment today with new layers which broaden the funnel and increase loyalty.

Hear from experts and assess the journey of airlines 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: Counting on people and agile adaptive digital platforms

First Published on 22nd May, 2018

Full service carriers have mainly focused on safety and operations for years. But it is time for them to be a part of a digital economy. Otherwise they would continue to get behind in the race of fulfilling customer expectations and being ready for modern commerce.

It is being acknowledged that airlines need to gear up for an entrepreneurial or innovation culture.

“Airlines need to embrace rapid learning cycles, experimenting, and empowering autonomous teams to innovate and validate at speed, says Bill McKimm, Business Development Director, Thoughtworks.  “Airlines need to structure their talent pool, how they bring agile principles into their respective businesses and work out a plan to deviate from their current architecture to a targeted one over a period of time as per a roadmap.” This needs to be worked, even though business continuity and no “downtime” are critical factors while working on such a major transformation.

McKimm 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.  Also there is a provision to leave endpoints as an API that will be consumed by other apps. As for making the most of 3rd party offerings, the adaptive platform with API interface helps in getting associated with start-ups, innovators etc. in a flexible manner.

Hear from experts and assess the journey of airlines 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: 5 areas that can propel airlines’ digital transformation journey

First Published on 14th May, 2018

Ai Editorial: Avoiding quick wins, adopting fail-fast attitude, opting for growth culture, a governance team and setting up a “best of breed” platform for optimizing digital experiences can help in a big way in gearing up for the digital API economy, writes Ai’s Ritesh Gupta

 

Airlines need to gear up for the digital world, which brings significantly different complexity and speed, something the likes of network carriers weren’t used to in the classical economy.

It is time to do away with slow, incumbent development processes, technologies and applications to deliver change.

Airlines have to be ready - digitally enabled end-to-end, by working out new digital front-end experiences, and seamlessly connecting these to the back-end systems.

At the same time, the journey of digital transformation needs to be understood because transforming a business involves an element of risk, too.

Failure to demonstrate value as desired can be a major concern. Here we explore 5 aspects that can help airlines in getting closer to the goal of being agile and delivering a superlative passenger experience as an organization:

·          Avoid quick wins: Do away with the mindset of “incrementalism”. It is being pointed out that if organizations end up settling for commodity-level task for incremental enhancements then it won’t serve the purpose. Don’t incentivize the team to progress only for quick gains. In one of his recent posts, Dave Thomson, Head of Product at Skyscanner, wrote that with this approach, one can avoid “big scary problems”. Thomson referred to a couple of possibilities where such mistakes happen –relatively larger businesses tend to be susceptible and the lack of precise and linked goals letting executives/ teams to work on an idea and deliver it. He says “think of quick wins as handing a lifeline to your competitors” and letting them “entirely leapfrog everything you are doing”. Thomson’s recommendation: think of “the network effects that exist within marketplaces, it’s better to swing for the fence and miss than not swing at all”.

·          Adopt fail fast attitude: Make learning as transparent as possible. For those keen on sharing learning, they go for reasonable prototypes, test them with users, and constantly refine them until they reach a minimum viable product. User experience professionals point out that focus must not be on the functional attributes of your product or service, but instead on the context for how customers purchases and use them.

“A great user experience isn’t enough. Airlines need to be connecting user experience with conversion rate optimization, but this isn’t happening today because most airlines don’t understand the relationship between the two.  We are constantly seeing airlines spend 6 months to 1-year designing a new digital experience, then they spend another year building this new digital experience, but by the time they have the new experience live it is 1-2 years old.  This process can’t continue for airlines to be successful,” says Mike Slone, Chief Experience Officer, Travelaer.

“(Airlines) They need to develop a “fail fast” attitude. One that allows them to quickly produce new innovative digital experiences, launch them, observe successes and failures, revise the user experience, observe and measure, and then optimize and redesign again- this should be a constant process, not one that is started every few years after you realize that your user experience is old and outdated.  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,” shared Slone.

·          Go for growth culture: Specialists point out that digital transformation is certainly not about assets, it’s not even about processes and methodologies. It’s about culture.

As a digital organization, Air New Zealand encourages a culture of curiosity, learning and problem solving, while providing clear direction and support.

Companies like Skyscanner are very particular about agile developments cycles and speed associated with it. Focus on setting up small, cross-functional, dedicated teams. They work on a small set of tasks together as a unit, and get feedback and clarification from each other continuously. In these companies engineering, growth, data science, and product operate together as much as possible. They deliver very fast, ensure teams are never afraid of trying new things and offer them ownership and independence in their functioning. Failure is part of their daily routine, as there is a culture of forgiveness and experimentation.

·          Governance team: Datalex recommends putting in place an agile governance team. Blair Koch, Datalex CTO and President USA asserts that this team should feature senior leader representation from all the functional leaders involved in the scope of the digital transformation.

“The roadmap developed should show how the transformation will take you from the current state to the future state and include a dimension of time, preferably at least quarterly “releases” of capabilities. The roadmap should be 24-36 months in duration,” wrote Koch in his posting.

·          Role of travel technology: The future of an airline’s digital success is building their own “best of breed” platform that can incorporate seamlessly the best travel tech products or modules into one experience.

“Relying on one Internet Booking Engine or one travel tech partner is often a mistake because the airline is held back by the abilities of one provider, when they could be advancing by working with multiple providers. Some airlines will always want the “easy button,” but the innovative airlines will push beyond the spoon feeding that happens from the large travel tech providers,” said Slone.

Airlines are starting to use sophisticated tools not produced by travel tech companies to improve their ability to personalize and adapt the content to their customer’s needs.  

 

Hear from experts and assess the journey of travel companies 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: Leveraging XML data for 3rd party distribution

First Published on 9th May, 2018

Airlines are on look-out for ways to evaluate search and booking behavior on every channel they are associated with. A critical aspect of the whole exercise is to replicate every aspect of the experience that is being offered via direct channels and extend the same to 3rd party ones.  

With IATA’s NDC XML standard, carriers intend to be in control of the offers they are able to make and distribute, and they can get closer to the same by leveraging insights from XML search and booking message streams coming in via the indirect channels. It is vital to assess how such intelligence is being banked upon for real-time decision-making: understanding market demand as it happens, promotional opportunities, flight schedules/ capacity adjustments etc. Data has to pave way for financial gains, be it via cost reduction or augmenting revenue generation, by understanding the performance of product and service offerings in detail.

So how is the industry making the most of XML / JSON APIs to exchange search and booking data? How has NDC played its part in understanding the performance of 3rd party channels via XML analytics?

Ai’s Ritesh Gupta spoke to Matthew Goulden, CEO, Triometric about the same.

For Ai’s 2018 Events, check - www.aieventdates.com

Follow Ai on Twitter: @Ai_Connects_Us

Ai Video: Leveraging XML data for 3rd party distribution (2)

First Published on 9th May, 2018

 

Airlines are on look-out for ways to evaluate search and booking behavior on every channel they are associated with. A critical aspect of the whole exercise is to replicate every aspect of the experience that is being offered via direct channels and extend the same to 3rd party ones.  

With IATA’s NDC XML standard, carriers intend to be in control of the offers they are able to make and distribute, and they can get closer to the same by leveraging insights from XML search and booking message streams coming in via the indirect channels. It is vital to assess how such intelligence is being banked upon for real-time decision-making: understanding market demand as it happens, promotional opportunities, flight schedules/ capacity adjustments etc. Data has to pave way for financial gains, be it via cost reduction or augmenting revenue generation, by understanding the performance of product and service offerings in detail.

 

So how is the industry making the most of XML / JSON APIs to exchange search and booking data? How has NDC played its part in understanding the performance of 3rd party channels via XML analytics?

 

Ai’s Ritesh Gupta spoke to Matthew Goulden, CEO, Triometric about the same.

 

For Ai’s 2018 Events, check - www.aieventdates.com

Follow Ai on Twitter: @Ai_Connects_Us

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