Ai Editorial: Is IATA’s NDC standard maturing?

First Published on 27th October, 2017

Ai Editorial: What is the real utility of IATA’s NDC standard in “indirect” distribution as of today? Is the XML-based messaging standard maturing? Ai’s Ritesh Gupta examines.

 

Questions around the progress and even the viability of NDC continue to crop up, even though the XML-based standard has been around for years now.

Of course, the number of airlines associated is always under scrutiny, but the IATA asserts that the standard is progressing and “maturing”. In their recent update, the IATA referred to the progress with version PADIS 17.2 (went live last month). It has also been stated that by next year, 55 airlines representing 55% of IATA member passengers boarded are slated to be NDC certified.

“Look at the total revenue generation (featuring NDC),” questioned one senior industry executive, who also questioned the utility of XML. Also, “too much flexibility in the initial versions of schema and continuous releases”, too, haven’t gone well with even some of the proactive players in the industry, as the standard is not only an airline topic, it does have an impact on the entire industry.

What is there to be seen as a progress then?

“It is clear that airlines, especially full service carriers, can’t play the waiting game. The game of retailing isn’t just about selling on direct channels. Of course, data-driven retailing (identifying frequent travellers, infrequent travellers, anonymous travellers etc.) is the focus of airlines for their channels, but airlines are looking beyond that. If NDC XML API connectivity can result in bundling of offers for certain routes in an ecosystem such as Alibaba then they need to prepare for it,” said a source, referring to Lufthansa and Emirates’ deal with Fliggy, a part of the Alibaba ecosystem. “Of course, certain, though only a handful of airlines, have chosen to re-work on their respective commercial strategies (for bookings coming via non-NDC channel/ connections) – and if you see NDC it features prominently among them. Every stakeholder has their commercial interest, if there is a way to disturb certain deals or have new ways of doing business then so be it. If an airline wishes to cut down on “costs” in one channel and pump in more money in another channel that’s their choice. That’s the way business goes.”

So direct connectivity, as exemplified by certain airlines, is driving the quest for being in control. “If an airline has worked on something special for outbound tourists from China, and if they believe the shopping experience on Fliggy could be served best by the NDC XML API or it is relatively a faster route to market, then why not? In fact, if there is a provision for rich content, bundled offers including ancillaries, and bookings are being managed via an airline’s reservation system without any 3rd party involvement, it does sound attractive, even though it needs to be added that working on such connect takes perseverance and investment.”

Too slow for some

In case of certain intermediaries, say a meta-search engine, that aren’t as big as Google in terms of garnering traffic but do understand the significance of showcasing the best possible content/ deal from airlines to make comparison shopping easier, the pace with which NDC has progressed has rather been slow. They expected a lot more, still for them, NDC has failed to deliver to an extent.

As Skyscanner acknowledged in one of our recent interviews, the issue has been flexibility with schemas. There are 2000 partners that Skyscanner works with, and there is plenty to deal with as far as APIs are concerned. “We hope to see more airlines adopt it (NDC),” mentioned Filip Filipov, VP, Product Management at Skyscanner.

Explaining the positive side as well the struggle that shackles airlines’ progress with NDC, Umesh Nair, president NDC and Distribution at travel technology start-up Airlines Technology, says, “Airlines want to go ahead with the NDC standard but have this in mind - when to start? How to start?” So where is the void in the market today and how is Nair’s company ensuring NDC picks up steam? “ The void is firstly (the) cost of implementation for airlines and travel agents, secondly travel agents are concerned about their push back from airline. They should understand an airline doesn’t earn profits from ticketing, in fact, ancillaries are the major revenue source for them. If travel agents sell more ancillaries, which means more revenue resulting to more profit. That is the integral part of NDC – whatever you are able to buy on an airline.com, in future you would be able to buy on a travel agent’s website/ brick and mortar.”

As Nair explains, certain airlines have realized that the game of retailing isn’t just about flight, air ancillaries such as flight boarding or bags, or hotels and car rental. In fact, airlines are being advised to dig deeper and target the “second wallet”, offering meals, insurance, events, transfers, taxi etc. Some of these products can result in attractive margin, for instance, meals with average order value of $15-$20, and net revenue of $9-$12.

But, according to Amadeus, the Level 3 is disruptive for agents, changing workflows and processes. As Cyril Tetaz, Head of Commercial, Asia Pacific, Airlines, Amadeus, explained to us recently, the cost and difficulty of integration remain quite high and may be difficult for some parties to address.  Airlines have been largely focused on Level 3 connectivity (Offer and Order Management) that would allow airline offer creation as well as order creation, retrieval, change and travel document issuance, payment and refund to be done via NDC-XML technology. IATA has also been highly focused on providing standards around this. But this represents a major booking flow redesign and requires travel agents to invest in NDC interface adaptation and costly IT integration, according to Amadeus. As Tetaz said, there are many ways of integrating NDC, and Level 2 connectivity (Airline Offer Management) is one of them. Here, airline offer creation through search and pricing of flights and ancillary services would be done via NDC-XML technology, without impacting the booking, servicing, payment and ticketing steps. However, Level 2 connectivity has not yet been defined by any industry player, he said. Options for integrating NDC are still in the making and being discussed by all players. Within the context of NDC, “our vision is to develop an integrated solution that can be widely adopted by both travel agencies and airlines to deliver sustainable results at a scale that matters. The objective is to ensure easy adoption in the marketplace with minimal disruption and to meet the business objectives of all parties. Collaboration across the industry will be a key factor in driving success for all players,” he said.

On the positive side, even the certification attained by different stakeholders could vary, specialists have found a way out to get the work done. There are offerings that can normalize different schema versions in real time, enabling connections to work between airlines and aggregators. This has helped in the implementation of NDC.  So even if an aggregator could be at different level of certification and an IT player could be at different level, “this is where NDC Adaptors come into play where we make sure that no matter on whichever version they are, we will make sure they are able to talk to each other – backward and forward compatibility,” said Nair.

So progress is being made regardless of schema standard and version.

As of today, different stakeholders have different take on the maturity level of the NDC standard, and expect such mixed response to continue in the time to come.

 

Explore how airlines, intermediaries and B2B specialists are going about distribution at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

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Ai Editorial: Solving the conundrum of “no single passenger journey”

First Published on 27th November, 2017

Ai Editorial: A traveller’s journey, right from dreaming to planning to booking to travelling, encompasses several touchpoints. How being a part of a digital economy and industry-specific business processes can help airlines in serving passengers in the best possible manner, explores Ai’s Ritesh Gupta   

 

For an industry that is caught up being process/ operations-focused, being too “siloed”, the task of being a part of a digital economy or embracing new business processes isn’t a straightforward one for airlines.

Traditionally airlines have focused on safety and operations, and this means customer-centricity has largely been way below in the list of preferences.

But with the race to own the customer largely drifting away to those who “own the data”, airlines are rightly looking at evolution to sector-specific processes, systems etc. to serve the passengers in the best possible manner. The consumption pattern and the fulfilment part of taking travellers from one destination to another is unique, quite different from buying a book online, but airlines can’t ignore consumerism that essentially is now about a connected, contextual experience.

Going by what airlines can possibly do to being more customer-centric falls in two categories:

1.     Improving upon on this sector’s underlying processes (every airline’s IT strategy is unique, thus they may decide to take relevant/ best of breed components from a range of suppliers), and

2.     Making the most of datafication and IT trends to be a part of a digital economy.

Both are equally important as there is no single customer journey.

“There will be no single customer journey. In fact, it will be the opposite. We go into the area of hyper-personalization, where each passenger will get a different offering through potentially unique set of channels. Artificial intelligence combined with platform economy allows unprecedented customer flows,” explained Marko Javornik, VP/GM Mobility and Travel, Comtrade Digital Services.

 

 

Here we explore how airlines are finding a way to serve their passengers by being part of a digital economy, and via industry-specific systems and processes (offer management, OneOrder concept, as envisioned by IATA), ahead of this week's 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).   

Platform economy model

Javornik emphasised that digital economy works through a platform economy model.

An interesting aspect of such model, according to Accenture, is the frenemy-like set of vertical industry groups “competing with captive offerings of horizontal platforms (e.g. Spotify on iOS vs. iTunes, Netflix on Prime vs. Amazon) is a characteristic of the platform economy”.  Good news is that the travel industry is starting to count on computing power, data storage, and open-source frameworks. Whether airlines make the most of datasets in their own environment or find a way to act on the activity of a shopper on Facebook or Alibaba (could be via retargeting or a branded storefront), acting on quality, relevant data must.  

Being part of such model or ecosystem can help airlines to make the most of where traffic is – it could be Facebook Messenger, WeChat, Fliggy etc. Say, a user ends up having an interaction with a chatbot on an airline’s account on WeChat about a fare from London to Shanghai. How about showing content (things to do in London)/ deal related to Shanghai when the same user visits airline.com? And if the airline knows about the profile of this traveller, how about offering precise options for things to do or a bundled offer? Plus, contextual signals such as like the time of day, weather, location (if you’re at home or traveling) and style (family, adventure etc.) can even refine recommendations further. This is where preparation in terms of having a single view of the customer, rules-driven content architecture, making the most of content on 3rd party ecosystem etc. can end up delivering a differentiated experience.  

Industry-specific systems and processes

Airline are looking at the systems they use or processes they are part of to improve upon several counts. One of them is controlling costs (considering the level of the look-to-book ratio as of today). Another area is improving upon KPIs such as average order value. Airlines have a lot of operational systems, for example, seat load factors by routes. So can such systems be fed into merchandising platforms to make offers that are dynamic, on real-time basis? Yes.    

Also, even though there is a continuous debate around JSON vs. XML featuring in NDC and OneOrder schemas, different stakeholders have gone ahead and allocated resources for the same. This is being done to be in control – making available customized, rich content offers via every sales channel.

It is being highlighted that by building on the Offer and Order Management systems, using NDC as the distribution protocol, and creating the One Order standard, airlines will have a much larger pool of APIs and third-party content providers to offer their customers the right travel offer at the right time, regardless if the customer is coming to the airline. As for the OneOrder offering, it would communicate with an airline's passenger services system through industry standard interfaces. The offering running in parallel to an airline’s PSS, would feature complete PSS booking connectivity and document process capability, converting PRN into “orders”. So PSS would pass on information to the NDC platform, where master record would be stored. The blend of this approach counts on historical details provided by the order management system and this vital, real-time business intelligence is leveraged in personalisation of offers. The fundamental concept of order management system is that it becomes the central source of truth. So the airport display, check-in counter, ground handler, catering…every aspect connects to the order management system. This would again help in serving the customer through the journey in an earnest manner.

Here from experts at this week's 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

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Ai Editorial: Personalisation at scale –what’s the journey like?

First Published on 20th October, 2017

Ai Editorial: How an organization that has embarked on a journey to personalise every interaction is going about the same? Ai’s Ritesh Gupta gains an insight from the travel industry, some dos and don’ts for getting closer to personalisation.

 

Personalisation requires clear vision, resources and investment.

From the outset, the roadmap needs to be clear. So how the graph of personalisation is moving along, the entire organisation needs to be aware of.

Here is the journey of one airline that is still in middle of the same, but is actually delivering personalised experiences on certain touchpoints. So if one on hand, a passenger, who is willing to upgrade seat at the boarding gate might not get recognised, but the same passenger when interacts with the in-flight staff can be identified. “We have digital dashboards for crew (on-board), but still lacking digital tools (for the airport environment,” shared an airline executive. “But do remember personalisation is a never ending story, there is a need to start somewhere, and don’t try to include all the touchpoints from the beginning. Even if an airline starts with personalisation, preferably for individuals, they would be be able to generate additional revenue and loyalty.”

Journey

So the journey of this airline, especially on digital touchpoints, for relevant recommendations and messaging, and seamless, unified experience, has been as follows:

Start with segmentation and make steady progress to rules-driven personalisation. This means setting up and further reworking on business rules that are utilised against clusters of visitors, based on information one can garner about users. This stage is generally based on relatively broader categories – for instance, starting with location or gender specific targeting to an advanced phase like one who has travelled to one particular destination possibly would be interested in another location. Next step before an airline moves onto an analytics-driven phase, could be narrowing down of segments. So a digital touchpoint is equipped to show targeted, relevant content but at this stage personalisation is around logic-based rules to decide on images or videos to be shown to the visitor. One might finalise rules based on the IP address, physical location, keywords etc. Another aspect that has been around is variation in what is being shown to customers on a travel e-commerce website based on the behavior of the user (banking on visitor profiles and pattern-card matching to dynamically alter the content). For this also, rules are finalised.

The second major component is progressing toward algorithmic personalisation, where one initiates with a relatively broad set of recommendations to ones that are specifically meant for an individual.    

It is also interesting to assess how some of the start-ups or 3rd party specialists can also play their part in personalisation, possibly without any access to data from the airline. (For instance, usage of machine learning in personalising destination discovery, helping airlines to begin their customer lifecycle earlier in the inspiration phase which positions them for the booking/ancillaries – that’s where the monetization is). Of course, airlines would be much better placed with a diligent data strategy in place which would help them to work better with such 3rd party specialists, and then they can even go for better recommendations on their websites or apps.

Significance of data

All through data needs to collected and acted upon via a central hub for the entire entity to come in unison as the journey allows. Three key points:

·          “For any airline to achieve personalisation at scale – the success lies in being able to unite all of their data,” shared an executive. “At some point, the issue of increased complexity would arise, but that’s where involving data science and decision making algorithms would assist.” As highlighted by Boxever, data-driven organisations ensure their customer data collection fits in with constantly evolving behavior based on their context. So if an airline doesn’t end up connecting the dots and act on the context of a situation, then it would end up missing out on optimizing the experience.

·          Also, move towards “operationalising” actionable data. “It is imperative to interact with passengers across channels from one core hub and having an ability to answer swiftly and aptly in context.”

·          Airlines also need to plan for how to set up rules and decisions for all channels, so even if starting with one channel – so say offer or deal for one channel, how the same can be established for all digital plus say offline channel e. g. boarding gate at the airport.

Other than data (which alone cannot facilitate change), certain areas that require attention from the beginning include:

·          Delivery of content: How would an airline deliver dynamic content, what sort of architecture is needed for the same? Also, what would it take to adopt omni-channel approach to content management? The content ideally needs to be crafted once and the organization should be able to reuse it on multiple digital properties without the need for duplication. Explore the pros and cons of coupled versus decoupled web content management architecture (for instance, in case of coupled architecture while the initial setting up is simple, scaling up is one issue. As for headless CMS can result in freedom while finalizing on a front-end user interface technology say for an app, on the flip side the CX or customer experience ends up being decoupled as well.  This would limit the ability to personalize the overall experience).  

·          “Make sure there is at least something to begin with, to personalize – a certain category of products and content to play with,” shared a source.

·          As highlighted in one of our previous articles featuring Vueling Airlines, do evaluate the cost of implementing personalisation. There is evidence that personalisation is profitable because it drives conversion up, but there is also evidence that it only works when you get it right and only on a highly segmented audience. As a consequence, you have to be careful with the cost, both economic –high investment is needed- and also opportunity cost.

·          Don’t rush to eradicate the problem of silos. Be careful about pushing for a sudden change. People aren’t going to be responsive to “new jobs, new skills, and new people to work with” resulting from drastic steps. Don’t risk the continuity of teams

 

Hear from experts about unique challenges that airlines face as they attempt customer-centricity at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Airlines and customer-centricity - do focus on unique challenges and people

First Published on 6th October, 2017

Aspects like an airline’s business continuity or the organizational structure are often cited as major roadblocks to being data-centric, be it for customer service or retailing, writes Ai’s Ritesh Gupta

 

Every interaction – be it via app/ website, self-service kiosks or staff at the airport, a chatbot etc. – matters today.

Airlines, just like any other e-commerce organisation, are gradually finding ways to work out a single view of the customer.

As it turns out, more than any investment, any data-centric platform, any IT-related move etc., it is the entire organisation that has to come around and ensure that every data trail is being capitalized on.

Aspects like business continuity or the current organizational structure, including unique challenges posed the way a majority of airlines are run, are seemingly the major roadblocks to being data-driven. Of course, extracting data out of transactional systems associated with airlines is one area that can’t be ignored, too. But equally important is the tendency of airlines not to embrace change. It needs to be countered.

Taking “digital” out of shadows

Airlines executives themselves are probing critical areas – is it time for airlines to split digital commerce from operations? Is an ecommerce/ digital business sitting under the same roof as operations curbing customer-centricity and data-driven retailing at airlines?  Airlines need to take the quantum leap into the future, combating organizational/ cultural defiance, limitation of this industry’s legacy technology and operational silos.

Nik Laming, GM - Loyalty Division at Philippines’ carrier Cebu Pacific Air believes that these businesses will more often be physically split into an operating business and more of an Uber- or Airbnb-style business, which is very focused on e-commerce. This would pave way for businesses to be quick enough, innovative enough without the operational concerns to respond to the new market conditions and harness them for profit. “ When there is supposedly an ecommerce/ digital business sitting under the same roof as the operational business it tends to be get slowed down, caught up in procedures and processes that weren’t  designed for nimble and disruptive growth, but were rather designed for operational delivery, regulated delivery where it not about speed, but it’s about accuracy, and quality and safety.”

Being pragmatic

Today the whole talk around digital transformation is being scrutinized minutely. Every airline’s journey is different. But there are some key lessons and recommendations that are emerging from experienced professionals:

·          Any change, right from sharing a mission and goals, needs to be top-down driven, with incisive leadership laying a strong foundation. “The executive leadership needs to buy into and own the undertaking of this magnitude. Then push it through the entire enterprise, break down the barriers for the working group to work,” recommends, Blair Koch, Datalex’s CTO and President USA.

·          Data alone cannot provoke change - rather accessibility, acting on it, customer support, training, incentivizing employees and ending up with the development of a customer-centric culture is key, Barcelona-based RJ Friedlander, CEO of ReviewPro, a specialist in guest intelligence for hotels, told me in an interaction this year.

·          Count on cloud for time to market, agility and cutting down costs. But this doesn’t need to be confused with the actual delivery of customer-centric capabilities required by an airline.

How to be data-driven?

So there is a need to prepare people in an airline.

Learning how a hotel company is doing the same, as explained by the Thailand-based hotel company AMARI, various departments need to take the responsibility of collecting data, and in turn, actionable information is being provided to ensure the experience of a hotel guest improves.  So, for instance, if a guest who has booked via an online travel agency, the hotel front desk staff is being instructed to collect the email id and being trained to get this guest enrolled into a loyalty program. Similarly, if a loyalty program member has turned up, then the screen (yes, there is an additional dashboard on the screen used by the front desk) would reflect relevant information and offer an opportunity to enhance the experience of this guest. So if a guest tends to stay in a certain type of room or prefers a particular location, then the staff can offer the same to them.

So how AMARI is bringing about the change?

“We talk everything in terms of a guest or customer profile,” shared Chetan Patel, ONYX’s Hospitality Group VP Strategic Marketing and E-Commerce. “We are moving towards real-time, 1-to-1, personalised, seamless interactions with our guests. That’s the end goal,” says Patel. The company is working on a new platform.  

As explained by Patel, relevant people in the company are capturing data right from what triggers the search to the next trip, and this entails what people tend to do and what are the opportunities to influence the behavior of the traveller. “The entire journey is being evaluated for our own systems and touchpoints,” mentioned Patel.

There is clarity on the following areas:

·          What data needs to be collected from each touchpoint?

·          What system will be involved at each touchpoint?

·          Where the data will be stored at that touchpoint?

·          Who will be the owner of that data once is collected?

Having an integrated customer profile that combines online and offline data is what AMARI is prioritizing.

Each airline has to chart their own journey. There are common challenges, where one can learn from some of the proactive organizations. Interestingly, in a recent post by Adobe, it was suggested that don’t rush to eradicate the problem of silos. Yes there are organizational silos that block departments from being on the same page working toward one goal, but also be careful about pushing for a sudden change. People aren’t going to be responsive to “new jobs, new skills, and new people to work with” resulting from drastic steps. Don’t risk the continuity of teams, it suggested.

Referring to marketers, it recommended that focus on collaboration (work out a journey map to help address technology and skills gaps), assess goals (cross-team KPIs that align well) and evaluate the transition plans for overall change management.

 

Hear from experts about unique challenges that airlines face as they attempt customer-centricity at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

Follow Ai on Twitter: @Ai_Connects_Us

Ai Video: Targeting anonymous visitors in travel e-commerce

First Published on 3rd October, 2017

Identifying anonymous or repeat cart abandonment visitors, engaging them at the time they are on a website, capturing vital information for remarketing etc. is significant to stepping up the likelihood of a conversion.

Airlines have to make an impact in a matter of few seconds otherwise the chances are that the same visitor can jump on to another airline or OTA site. So even as on-site display of content and messages such as “only 4 seats left” or dynamic countdown such as “10 minutes left to complete a booking” can help in a purchasing decision, certain aspects like sending a personalised content (say after 4th click) or capturing a vital piece of information can help in tapping the customer as per their booking funnel. Also, if the captured information one that is related to user’s activity on a site is mundane, it can also mean that remarketing (done via email, Facebook ads etc.) can be futile.

Zine Voza, Enterprise Sales Manager (APAC), SaleCycle asserts that other than a user logging in, one has to make the most of every input that they make on the site or via on-site messaging. 

 

Hear from experts about on-site personalisation and retargeting at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

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Ai Video: Japan Airlines gears up for retailing and NDC

 

How can airlines that haven’t really adopted a sophisticated approach to retailing and ancillary sales gear up for the same? Is NDC emerging as a viable option to offer legacy airlines the framework, based on XML standards, to match the “LCC” approach to unbundling or ancillary sales?

As a carrier from Asia, Japan Airlines considers NDC to be an opportunity to position itself as a premium carrier that has the capability of delivering a variety of products that suits the needs of the customers. The airline has formed a cross-functional team, says Akira Mitsumasu, VP, Marketing & Strategy, Asia & Oceania Region, Japan Airlines.

“Being a full-service carrier, we just don’t want to unbundle things (for the sake of it) and sell them. It could be a leisure traveller or a business traveller (even a same person travelling on different occasions/ trips), it’s about identifying a need and then presenting with relevant options,” he says.

According to Mitsumasu, as an organization, Japan Airlines is gearing up for retailing and is open to fine-tuning their distribution strategy as well, including being open to the option of direct connectivity and looking beyond traditional means of airline distribution.

 

 

 

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Ai Video: Skyscanner gears up for differentiation, are airlines ready?

First Published on 22nd September, 2017

Shopping for flights tends to get mundane when travel e-ecommerce sites or apps come up with an overly generic or inconsistent presentation of product attributes. As key players in the flight search category, meta-search engines are being counted upon to let travellers understand, compare and personalize their trip essentials by overcoming data, technology and user experience (UX) hurdles.

How close are airlines to letting travellers visualize what they have to offer - Wi-Fi, power ports, seatback entertainment, food, seats, in-flight shopping, specific aircraft, baggage etc.? Yes, one can garner and compare basic information, but there are also signs that some concrete, functional information about product attributes is being showcased.

Filip Filipov, VP, Product Management at Skyscanner, says, “As we go deeper into the purchasing funnel (working with certain carriers for the same), we are now showing how big is the seat pitch, what is the actual seat like (in terms of photographs/ rich content)…ultimately it comes down to whether the airline is able to provide information to us. We do intent to show as much as we can, but it’s a question of technological advancement (where airlines are able to pass on the requisite content)."

In this context, the role of IATA’s XML-based standard NDC (New Distribution Capability) is being continuously scrutinized. Filipov says the standard has simplified the ways the API is structured. So, for example, every airline would define their attributes, say baggage or in-flight entertainment, in a certain manner. So considering the number of airlines, every single definition then becomes an exponential problem for an intermediary like a meta-search engine.

Considering that there was “too much flexibility in the initial versions of schema and implementations weren’t the same”, intermediaries are hoping that this aspect would be taken care of in the future. The challenge for an intermediary arises considering that airlines have developed their API based on a different or a certain version of the NDC XML standard. So aggregation of multiple airline APIs requires further work to achieve the desired result.

For their part, Skyscanner is open to the collaborative route, for instance, the concept of airline store-front on their platform where shopping is practically identical experience to one on airline.com.

The team at Skyscanner is experimenting with rich content, be it for photographs or videos at this juncture, to improve upon the experience of the shopper. Of course airlines, too, need to play their part in making this a possibility. So, yes, attributes of a particular flight are being displayed, but there is no video yet. But one can expect lot more immersive experiences in the future, may be 3-4 years from now on. 

Hear from British Airways and Skyscanner about the role of meta-search and the contribution of NDC in improving merchandising at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

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Ai Video: Jay Sorensen on Branded Fares

First Published on 28th August, 2017

Branded fares allow a traveller to upgrade his or her experience. Travel shoppers aren’t always after the lowest fare; in fact a considerable set of travellers are open to paying for a premium for more comfort and convenience.

Among a number of factors that go into finalizing branded fares, a basic criterion that is applicable is to go ahead with 3 options. “Research has shown consumers are more tempted by a “middle choice” when three are presented,” says Jay Sorensen, President, IdeaWorksCompany, who referred to SWISS’ way of presenting the same. “SWISS adds to the attraction by flagging its Classic fare as “recommended” and using a visually larger display box.  The features for each fare are listed in a simple and transparent style,” he said. 

It is also recommended that focus should be on simplicity, for instance, add bullet points to list the features associated with each branded fare product. Avoid generic display of information that isn’t directly related to the decision-making of the traveller.

Sorensen also mentioned that the basic premise of choice needs to be supported by apt pricing strategy, and the price distinction needs to be consistent irrespective of the starting price of the base offer. Other areas of consideration include whether to set up itinerary flexibility into the branded fare choices or not, the profile of ancillary items in terms of their margin, excusive service or ancillary item that isn’t otherwise available for sale etc. 

 

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Ai Editorial: How does Amadeus see NDC connection and commission for agents?

First Published on 23rd August, 2017

Ai Editorial: How quickly can NDC connections bring about a big change in the manner in which travel agents go about selling airlines’ offerings? What about the long association between GDSs and travel agencies? Ai’s Ritesh Gupta spoke to Cyril Tetaz, Head of Commercial, Asia Pacific, Airlines, Amadeus, about the same.

 

A couple of months back, American Airlines with their NDC connection, featuring end-to-end shopping, booking, and ticketing capabilities plus new content and functionality, introduced $2 per flight segment NDC commission as part of their NDC incentive programme. 

There are interesting aspects associated as far as the participation of travel agents is concerned. For instance, how would agencies go about developing an NDC connection? What happens to agencies-GDS volume agreements?

American has mentioned that NDC is not designed to create extra work for travel agencies, and in fact, this will provide agencies with richer sets of airline products and services to compare when using NDC, “which increases consumer choice as compared to today’s legacy GDSs, which may be constrained by outdated technology“. At the same time, travel agencies are responsible for their own hardware costs.

So it is also important to assess how does a stakeholder of Amadeus‘ stature foresees such developments shaping up.

Association of agents with GDSs

Is the dependency of travel agents solely on GDS getting reduced year by year?

“We don’t believe that’s true,” Cyril Tetaz, Head of Commercial, Asia Pacific, Airlines, Amadeus

“Travellers want consistency, transparency and choice and the GDS remains the most cost-efficient way for travel agencies to deliver that to their customers. Amadeus allows our travel agency partners to connect to the richest and most relevant array of content on a single platform. We imagine that managing multiple connections or platforms would require a substantial level of investment, effort and IT skills for travel agencies. “

Tetaz also emphasized that what Amadeus offers no other GDS or channel can replicate – the Altéa community model.

Over 130 of the world’s airlines, including some of the largest, use Altéa for their PSS.

“Altéa and the Amadeus GDS are built on a common platform which means Amadeus travel agencies booking Altéa airlines enjoy best data accuracy and cross-channel consistency. Benefits include fare accuracy, automatic frequent flyer validation, instant SSR (Special Service Request) confirmations, and guaranteed last seat availability,” he said. “Any changes made to a traveller’s PNR by the travel agency is immediately seen by the airline and vice versa. This is a level of service that our travel agency customers appreciate they can offer to their travellers.”

Business processes and functioning of agents

A section of the industry is pushing airlines to re-look at the process of creation of their offers, sharing of fares via static filings, and even 3rd parties creating the offers on behalf of the airlines.

Today airlines typically publish fares through ATPCo and all distributors have easy access to them. Furthermore, the current model also relies massively on caching technology for fares and availability.

“This brings speed (in response time) and cost efficiency for all travel players. As a result, travel agents do not depend entirely on airline systems to make an offer for the traveller. As we’ve seen in their public response to NDC, these are things that concern travel agencies and must be taken into consideration for whatever new model comes into play,” mentioned Tetaz.

If we talk of XML connectivity, Amadeus has also been distributing LCC carriers with XML connectivity since 2008. What are issues with adoption of NDC, is it “too much flexibility in the initial versions of schema” and interpretation being different the main issue? How agents need to move along?

Tetaz highlighted that the cost and difficulty of integration remain quite high and may be difficult for some parties to address.  He said airlines have been largely focused on Level 3 connectivity (Offer and Order Management) that would allow airline offer creation as well as order creation, retrieval, change and travel document issuance, payment and refund to be done via NDC-XML technology.

“IATA has also been highly focused on providing standards around this. But this represents a major booking flow redesign and requires travel agents to invest in NDC interface adaptation and costly IT integration,” he said. “In fact, there are many ways of integrating NDC, and Level 2 connectivity (Airline Offer Management) is one of them. Here, airline offer creation through search and pricing of flights and ancillary services would be done via NDC-XML technology, without impacting the booking, servicing, payment and ticketing steps. However, Level 2 connectivity has not yet been defined by any industry player. “

Options for integrating NDC are still in the making and being discussed by all players.

“Within the context of NDC, our vision is to develop an integrated solution that can be widely adopted by both travel agencies and airlines to deliver sustainable results at a scale that matters. The objective is to ensure easy adoption in the marketplace with minimal disruption and to meet the business objectives of all parties. Collaboration across the industry will be a key factor in driving success for all players,” mentioned Tetaz.  

Merchandising, GDS and agents

Amadeus says they are making sure that branded fares and ancillary products are available through all channels – direct and intermediated. The team has been working with over 128 airlines to date to bring to the market their ancillary services offerings. During the 2014-2016 period Amadeus has witnessed a 125% CAGR on ancillary bookings done through travel agencies using the Amadeus system, with a significant growth in attachment rate across travel agency segments.

“Furthermore, we have seen double-digit growth when it comes to the number of airlines selling their fare families through Amadeus. This has facilitated the selection. of fares by travel agencies for their clients, as well as being a powerful upsell tool that has generated significant incremental revenues for airlines,” said Tetaz.

Meet executives from Sabre, Amadeus IT Group, Datalex, Farelogix, Travelport, OpenJaw Technologies etc. at this week’s The Mega Event Asia-Pacific 2017 - 4th Annual Profitabilty Summit, to be held at the Grand Mercure Roxy Hotel in Singapore (23-25 August, 2017).

 

For more, click here

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: How is Sabre placed today with “rapid of evolution” of IT offerings?

First Published on 21st August, 2017

Ai Editorial: “Any competition is good. We are the leaders, we are the innovators, we continue to invest significantly to maintain and expand our position,” says Rakesh Narayanan, VP of supplier commerce, Asia Pacific, for Sabre Travel Network. “For us, it is not about a point solution, we look across the whole ecosystem where we can add value.”

 

By Ritesh Gupta - One big challenge that airlines need to address today is how to offer a sublime experience to passengers. There is no doubt the journey of planning, shopping, travelling and even beyond needs to add to the joy of travel.

In order to being inspirational to offering choice to seamlessness to serving in a contextual manner, it is being evaluated to what extent the status quo is being challenged. This includes dealing with the combined impact of complexity in both technology and distribution that leads to inconsistency for the passenger,

Expectedly, the role of travel B2B conglomerates has been under the scrutiny.

It is being highlighted that what airlines manage to do with their content and merchandising via direct channels, replicating the same via the indirect ones has rather been slow. So constraints remain to extend this capability to intermediary channels, but that’s not a technology constraint, rather an evolving business model to be tied down with airlines partners.

So lots of critical questions are cropping up:

·          What is being done to improve upon the overall IT infrastructure, industry-specific business processes, e-commerce and merchandising, distribution connectivity etc.?

·          Are airlines moving on from tightly integrated processes?

·          How can airlines craft an offer and show their content in the best possible manner via intermediaries?

·          Is the reliance on the GDSs set to come down? How indirect distribution is evolving?

·          How quickly can airlines introduce a new offering across all channels?

·          Is there going to be any change in “full content” agreements?  

And as a consequence, the tussle around the best-of-the-breed vs. a single vendor for all commercial as well as operational needs of airlines is interestingly poised. In this market, it isn’t easy to dislodge traditional players and their volume-driven, transaction processing-oriented business models.  

Sabre banks on “rapid evolution”  

From Sabre’s perspective, Rakesh Narayanan, VP of supplier commerce, Asia Pacific, for Sabre Travel Network, asserts that the organization is evolving, just as different airlines continue to move ahead with different strategies.

What works in an organization of Sabre’s stature is the fact that they are a provider of mission-critical offerings, spanning across reservations, operations, commercial and data and analytics.

If we talk of reservations only, a decision to shift to a new solution can take years. For example, as it emerged this year, Southwest’s move to bring together multiple reservation system capabilities onto one common platform took 3 years or so, featuring over 1500 people!

On top of their ability to deliver offerings for commercial and operations of an airline, organizations like Sabre act as strategic partners from a consulting perspective, too. “Being a technology company, we believe technology can be a differentiator for airlines to be successful and we get involved early on from the strategy stage,” mentioned Narayanan, who added that Sabre has introduced more than 31 new solutions in the last 2 years or so. “There has been a rapid evolution of various technologies, modules, applications, software (at Sabre)… on the PSS side and other areas for airlines” to benefit in a significant manner. But as witnessed, certain airlines have been separating core functioning of a PSS that are needed to run operations, and opting to control their own merchandising, e-commerce and API technologies for differentiation. “Technology is evolving, the marketplace is changing, travellers’ behavior is changing…if you look at some of the markets, web and mobile commerce is outpacing some of the relatively mature markets. So whether an airline opts for an integrated offering (from us) or works with multiple partners, we are supportive (of that, too). From our perspective, a real differentiator and value addition from Sabre is the integration piece.”

How are Sabre’s solutions including the PSS, Revenue Optimizer, Digital Experience, data and analytics etc. coming along? Aren’t new age IT companies taking lead, be it for letting agencies sell say advanced seat selection capabilities or branded fares or distribution of content via APIs?  

Sabre has been asserting that the products from 3rd party specialists are worked out in “isolation” and entail  “manual intervention” to garner and put together the requisite information from passenger-service and operational systems, “resulting in delayed and inconsistent offers”. The team also emphasises that working on a retailing mindset means carriers have to plan for an astute IT architecture that is “extremely flexible, scalable and able to handle thousands of sophisticated transactions using real-time or near real-time data in a matter of seconds”.

Referring to how the team has been working on right tools to enable airlines to make more money, Narayanan referred to the Digital Experience platform, which has been designed to optimize web-based offer execution. Terming the newly introduced offering as interactive and customizable, he said that flexibility and agility is coming into the marketplace for airlines to make changes, considering the significance of time-to-market and differentiation. The architecture is as such that there is provision for contextually-rich customer data between SabreSonic core services applications, its retailing platform, encompassing ancillaries, brands and non-air sales; and the Digital Experience, which distributes the optimized offer throughout various web-based channels. Sabre also allows airlines to dynamically combine and make packages based on a specific set of variables or based on value, for instance, frequent flyer program, spend with the airline etc., shared Narayanan.  

Narayanan also referred to the introduction of Sabre Red Workspace, which allows agencies to visualize airlines’ offerings via apt mix of content (branded fares, graphical seats maps etc.) and data (seasonality, weather etc.). “If travel consultants (agents) are able to communicate better, they can sell better.”

Data, tools and revenue generation

Another area that Sabre has been working on is their customer data hub and, as Narayanan says, the same isn’t just about FFP or previous spend or travel with Sabre.

“It is a comprehensive view of the traveller, their experiences with the airline, providing that data at multiple touchpoints. And this, too, not only at the time of making an offer or position on price during the sales process, but even beyond that. So be it for post booking, the day of travel, etc. what kind of value addition can be done to enhance the trip? So Sabre asserts that in their technology, it is possible to assess whether a passenger is likely to buy an upgrade at the airport or lounge access voucher. The ability to up-sell or work out a tailored ancillary product and to be presented by the airport staff is a possibility.”

“It also helps on the service part. If a passenger had an indifferent experience then he or she could offered an upgrade or free Wi-Fi as per the policy of the airline.  So the PSS allows to support customer service and revenue generation opportunities,” said Narayanan, underlining how the core functionality of the mission-critical system is evolving and supporting requirements for e-commerce and retailing.

In addition to this, Revenue Optimizer combines with the PSS and looks at maximizing revenue on a segment as well as the entire journey of the passenger, could be via code-share partners. It will also start maximizing ancillaries, too. So if there are 6 special seats – whom to sell it to, and how to revenue manage? If there is a passenger who is willing to spend $100 but nothing on ancillaries, and $90 on ticket plus $20 on ancillaries, then Sabre is in a position to target the latter. So can a new product, say lounge pass, can be introduced a matter of weeks? According to the company, Sabre’s Dynamic Retailer roll-out has initiated, and the company says in “pretty much” in real-time assembling of different ancillaries or put together bundled offers or customized offers or individual offers.

“So Sabre having the portfolio and the underlying platform that allows us to have an integrated solution, and not interfacing multiple systems together, enables us to most effectively provide the service and maximize revenue,” explained Narayanan.

Also, integration of solutions would also feature handling of operations related to disruption.

“A lot of offerings are interconnected in a certain fashion. We experience with airlines what they go through on a daily basis. So in case of a disruption, passenger services take a hit. Aircraft end up at wrong places, it is imperative to put them back in place, get schedules back, manage crew, and ensuring passengers get back to their destination as soon as possible. (One core development is) Sabre has automated recovery management tools. We have an optimal solution i. e. focused on least disruption to the passenger, ensuring airlines are  operationally viable and not violating any rules/ regulations and keeping disruption cost and impact on service to minimum,” added Narayanan, again asserting the significance of a platform that can support critical functions.  

(Stay tuned for Sabre’s perspective on distribution including full content agreements, direct connectivity, NDC and lot more).

 

Meet executives from Sabre, Amadeus IT Group, Datalex, Farelogix, Travelport, OpenJaw Technologies etc. at this week’s The Mega Event Asia-Pacific 2017 - 4th Annual Profitabilty Summit, to be held at the Grand Mercure Roxy Hotel in Singapore (23-25 August, 2017).

For more, click here

Follow Ai on Twitter: @Ai_Connects_Us

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