First Published on 22nd November, 2016
How mobile, cloud, social media, big data and analytics, and artificial intelligence are driving the future of flight search?
San Francisco-based Gillian, CEO & Founder of mobile app Hitlist, a personalized mobile travel agent, underlined that new business ideas have a certain gestation period before they go mass. “Disruption doesn’t come out of the blue. It’s a process, where trends develop over a long time before they hit the mainstream,” Gillian said.
She noted that “millenials” and “mobile” are two trends that are tipped to signal a new era in the flight search category.
Referring to emerging trends in the flight search space, she mentioned that this segment is witnessing several approaches. These include assisted (FlightFox, TRVL, Lola, Slingshot), inspirational, proactive alerts (Hopper, Hitlist), customer-first (Skiplagged) and socially integrated, shared Gillian, who took an unusual career path, marked by her journey of staying in different countries and opting for different assignments in around 10 countries. She eventually ended up a venture-backed start-up. As for Gillian’s company, Hitlist proactively finds best itineraries for users, helps them to make the most of data in their social graph to provide them with relevant destinations and deals.
“Millenials buy in a different way,” she said. It is being estimated that 40% of overall travel spending is going to be contributed by this segment by next year, as the level of spending from this age-group is set to go up. This group embraces mobile offerings faster than “older” generations, and it is time for travel companies to engage millenials on their terms, offer a range of payment methods.
As for mobile distribution, Gillian mentioned that the industry is yet to see the real shift the way travel is marketed and distributed. “(Mobile) is a personalised, super-computer in your pocket, present all the time,” she said.
Follow Ai on Twitter: @Ai_Connects_Us
First published on 21st November, 2016
Ai Editorial: Organizations that aren’t start-ups, and are executing a proven business model, have a lot to learn from growth hacking, writes Ai’s Ritesh Gupta.
When one reflects upon the story of Airbnb, it is inevitable that their Craigslist integration and the so-called growth hack strategy would surface in the discussion. Could a marketer have ever achieved that? Or was it the sheer brilliance of an engineer to script such a legendary story?
Stories such as these have set a new benchmark in the arena of growth hacking. What can trigger “virality” of a campaign? How to master the art of A/B testing and landing pages? How to deliver personalised content? These posers aren’t really new, but cracking them isn’t a solution that has stayed the same for years. And if any marketing initiative/ campaign proves to be a successful and that too at relatively “lower” cost, then it’s worth an applause.
In today’s digital era where ecosystems such as Google, Facebook, Alibaba, Tencent etc. can be home to massive volume of traffic, optimizing a product or message requires a new skill set. Not too long ago, Pokemon Go became a rage, and there was a rush to make the most of the associated users/ traffic. Here only the blend of content, data, analytics, algorithms etc. can do the magic, and it is clear that lines between marketing, product, and engineering are diminishing.
This is what “growth hackers” have achieved over the years, especially when we talk of scaling businesses. They excel in crafting sensational success stories that have marked success of brands such as Airbnb. They can be described as experts in several disciplines - partly marketing, partly product development, partly engineering.
Airbnb rallied on their strong Craigslist integration. Dropbox quadrupled its users in 15 months by redefining an old door-to-door salesman trick of recommending an unsuspecting neighbour who might be interested in the product. In complete transparency, Dropbox incentivised referrals so both the referral and the referee were rewarded. Amongst users it became a race to see who could refer their entire network first.
“There is plenty of opportunity for airlines to take a similar approach by reimagining strategy around the traveller’s needs,” says Matt Walker, Chief Storyteller, LikeWhere.com.
Overlap between marketing and growth hacking
The background of growth hackers makes for an interesting read on the web. There is plenty to learn from growth hackers, even though what marketers set out to achieve is different (trying to find a balance between awareness, reach and conversion). Growth hackers stand out for their ability to reap results from repeated testing, and proficient at being precise with return on investment. In a recent article on rockboost.com, it was highlighted that with apt blend of user testing, data mining etc., growth hackers focus on crafting a product or refine it to attain product/market fit or PMF. It also stated when at least 40% of your users have strong affiliation with a product/ service (about using it), PMF has been achieved. So the growth hacker’s goal is to create a product their customers cannot live without.
A marketer in a bigger sense has to create an aura around a brand. It just goes beyond virality or finding a PMF.
“It certainly (growth hacker becoming a VP marketing) could fit the bill, but there are other factors to consider industry by industry. Making a growth hacker VP could entrench your marketing efforts in that approach alone,” says an executive. “I wonder does a VP need a broader, more nuanced approach - of which growth hacking could play a considerable role.”
Unearthing something new
What about the need for growth hacking in a mature industry like air travel?
“I do think airlines could take a growth hacking approach to long tail inventory: new and underperforming routes. Currently, cutting prices has been the predominant solution, and limited at best. Hacking is about identifying or creating opportunities. Increasing the perceived value of lesser known and underperforming routes through context and story is a fresh strategy, and one that is proven in other industries,” pointed out Walker.
Being disruptive as a non start-up
A mature sector such as air travel needs to embrace change, and be more agile.
· First, specialists point out that for relatively mature companies to make the most of capabilities of growth hackers there is a need to re-look at the goal of a marketer. Go beyond awareness and acquisition. Departments operating in silos doesn’t work today, and there is a need to evaluate the whole funnel in a holistic manner. So evaluate activation tactics and metrics such as customer segmentation/ behavioural analysis, cohort analysis etc.
· Second, problem doesn’t lie in understanding innovation, rather it’s about how to pave way for innovation and embrace in an organization’s culture. So look at the design. Dig about innovation KPI’s, policies, processes and incentives. So JetBlue Technology Ventures comes across as a visionary move. The entity is focusing on investing, incubating and partnerning with early stage start-ups at the intersection of technology, travel and hospitality. Objectives include customer experience and operational efficiency.
· Third, look at data and platforms. Even as we talk about owning the entire customer lifecycle – from awareness and engagement to conversion and loyalty, one can’t ignore the fact that the landscape is fragmented. “We are sort of locked in a data ecosystem, which is not transferable. So what we call is a “walled garden” – you can’t get data out of it,” says a marketer, referring to Tencent and Alibaba ecosystems. Find ways to have a unified view, and do away with data silos that can create inaccurate customer profiles and duplicate information.
· Fourth, focus on what can go viral or facilitate virality. For instance, gamification is spoken highly of in terms of experience and engagement; freemium - offering simple and basic services for free for the user to try and more advanced or additional features at a premium, and this can be used for expanding social media base; target low-hanging opportunity such as page load time, focus on link building and spread your content; memes are considered to be very attractive.
Establishing a huge user base, quick publicity, massive sharing of your post, etc… this is what growth hacking is all about. It is exciting. When all of it happens at virtually no expenditure or at best “low-cost”, it’s like winning over a battle without even letting your opponent know when it started and got over!
Follow Ai on Twitter: @Ai_Connects_Us
First Published on 21st November, 2016
What would it take for airlines to become passenger-centric organizations? Can IT lead transformation and be a source of competitive advantage?
Airlines are facing a barrage of questions, being challenged to drift away from their process-centric way of functioning. There is a call for digitalisation and the move to ‘digital-first’ delivery methods. Airlines need to scale their digital business processes and enterprise models to align with the digital ecosystem.
Experienced airline executive Dean Dacko acknowledges that airlines across the world are keenly looking at a passenger-centric evolutionary process but are having difficulties in moving in that direction and implementing that kind of capability.
Most airline environments consist of a mix of technology vendors, but some of that technology is old, inflexible. As one executive points out, most airlines “are at the mercy of their PSS or CRS provider”. And this hampers the aspiration of being customer-centric, since airlines tend not to own their own data and rather incur expenditure for accessing their own data. The combined impact of complexity in both technology and distribution leads to inconsistency for the passenger – and their overall experience. The passenger sees different products, different prices, different offers or bundles, all depending on which site they are visiting, or what device they are using. Be it for crafting an offer (dynamic merchandising, pricing, availability, and schedule building) or distribution of content, airlines need to evolve in order to be in control.
But change isn’t easy in this industry considering so many tightly integrated processes.
“The main challenges lie in leveraging the legacy environment, that database environment through the PSS, that has for most part handcuffed majority of airlines for many years. It is being envisioned that customers need to be at the forefront when it comes to all the way they engage, they communicate and market them relevant offers/ services,” Dacko says.
“Airlines need to take the quantum leap into the future, to recognize that time has come to continue to work on capabilities, build on technology that doesn’t necessary build on an existing PSS. One needs to gear up for digital first, customer first business environment,” said Dacko.
Follow Ai on Twitter: @Ai_Connects_Us
First published on 7th November, 2016
An efficient API strategy paves way for pervasive adoption of applications, enabling an airline to greatly expand its presence across related applications.
Airlines need to act swiftly and make the most of APIs in a connected world.
This is imperative as systems move to the cloud, mobile devices become ubiquitous, and the Internet of Things unleashes novel ways of connecting with passengers.
As Kevin O’Shaughnessy, CEO and co-founder, Indigo.gt, recommends, “Be your own API”.
All systems – whether digital or legacy - must work and run on APIs. The likes of Google, Uber, and Alibaba have leveraged technology to unify their end-to-end operations. These organizations are in a position to serve their offerings with outstanding accuracy, maximising their operations while engaging directly with and owning their consumers.
A competent API platform lets interoperate with other enterprise solutions regardless of technology or platform. It facilitates an enterprise model that opens technology to connect people, organizations, and resources in an interactive ecosystem. Airlines can reap several benefits, be it for serving customers during their various stages of their journey as well as working out tool sets for configurability and integration to partner merchants.
It’s time airlines refine their API strategy, which is about working on a proficient interface to an IT application or data source that allows authorized applications or machines to easily access it.
As Kevin points out, do value on focus on first. APIs offer a myriad of value propositions within airlines and travel companies.
Follow Ai on Twitter: @Ai_Connects_Us
First published on 3rd November, 2016
Ai Editorial: Travel marketers need to consider the prowess of emails featuring item-level ecommerce receipt data. Ai’s Ritesh Gupta explores how such data can help in understanding the traveller and optimize the travel booking funnel.
How can travel brands make the most of data captured from items purchased?
This isn’t a new opportunity as such, but surely is one that is getting sophisticated.
Email data featuring retail transactions is offering visibility into shopping activity, paving way for profound analysis into buying preferences and patterns.
Travel marketers are being enticed to look into such data as details relate to actual transactions made by consumers in “near” real-time.
So is the transactional data market being disrupted?
Yes, says Dwight Sholes, Senior Consultant, Travel and Hospitality, Return Path. The company maintains a panel of over 1.3 million consumers who are active buyers and are receiving email receipts into their inboxes on a regular basis. These consumers have given “permission to have confidential visibility into their email inboxes while strictly protecting their privacy and personal data”, says Sholes. “We capture data at the item level, including product titles, colours, sizes, individual order quantities, pricing information, and more. Analyze the macro and the micro,” he says.
Today, receipts for a very large percentage of consumers’ online and offline transactions are being transmitted via email. When a consumer walks into a brick-and-mortar location and makes a purchase, or when a consumer transacts business online, he or she will receive a detailed receipt via email to her inbox. Receipts are sent via email for all online transactions and, increasingly, for many offline transactions made at both large and small businesses. These email receipts contain detailed information about the purchase, including the specific items purchased, the amount paid, the method of payment, the merchant making the transaction, and so forth.
Rich, detailed data
Armed with rich, detailed data, travel marketers will have the ability to understand where consumers are transacting, when they are buying, what they are buying, and how much they are paying.
Source: Return Path
“And with overlays of demographic and other profiling data from third parties, travel marketers will be able to understand who these customers are in greater detail,” said Sholes.
When asked how such insight can play its part in the travel booking funnel, Sholes says the quality is superior. Credit card companies, for example, typically only provide data at the merchant level and do not provide data down to the individual item level. “We parse nearly 100 pieces of information into a database,” says Sholes. The team at Return Path is in the process of completing development of Consumer Insights for Travel, which will provide detailed receipt data about airline transactions followed, in later releases, with data about accommodations, car rental, cruises, transfers, and other travel products and services. “Initial beta applications of the data have been very promising, shedding light on how different demographic groups buy different types of ancillaries at different rates, and how different carriers have different take rates for ancillaries. Going forward, additional applications include leveraging Consumer Insight data to gain a better understanding of the path to purchase not only for airline ancillaries but other travel products and services as well.”
“In particular, Consumer Insight provides airlines with valuable data about ancillary products and purchases. With Consumer Insight, airlines will be able to develop deeper understanding about the profile of consumers who buy different types of ancillary products and services, both for their own passengers and for competitors’,” shared Sholes.
Gearing up for parsed data
The challenge for airlines (as well as many other businesses, particularly in travel) is creating human processes to make more effective use of data in their business planning. Too often, businesses ignore data that is available to them and continue setting strategy as they always have. In today’s data-driven business environment, it is important to break down silos, to take a customer-centric view, and to make smarter decisions by leveraging data that is available rather than the easier route of ignoring the data in favour of business as usual.
As for what sort of infrastructure or integrations are required to optimize parsed data in an airline, Sholes said this depends on the infrastructure and capabilities of each specific airline. Such data is provided as a data feed to existing non-travel customers, and the amount of integration required is minimal. According to Sholes, any airline that is able to accept a data feed and utilize Consumer Insight data with its current analytics capabilities could start receiving the data relatively quickly.
Expect more in the time to come
Generally a retailer tends to have information about individual purchase histories for regular buyers. In addition to this, one can evaluate certain demographic and payment preference details.
But one can beyond this, too. For instance, what sort of activity or shopping the same set of buyers indulge in outside a brand’s touchpoints. Return Path has underlined that 3rd party consumer data can tell retailers more about how much their average shopper spends at competing stores, which brands they prefer for non-competitive, non-substitute products, and even provide a glimpse into customer psychodynamics. The company also added that the term consumer insights and the underlying art/ science that turns insights into action “are still shaping into something meaningful, but let this be the first step on a journey to understanding what consumer insights really are”.
Follow Ai on Twitter: @Ai_Connects_Us
First published on 26th October, 2016
Ai Editorial: Airlines need to drift away from their image of being technology or processes-centric. But it doesn’t mean old can be completely replaced, writes Ai’s Ritesh Gupta, who is attending #MegaEvent16 conference in Toronto, Canada
Airlines need to break the shackles in order to gain better control of what they offer, and move on from being technology-centric entities to a passenger-centric one. But while certain areas, especially the issue of legacy technology can be tough to deal with, there are few that demand a certain level of swiftness to move in the right direction.
As it turned out from some of the key discussions that took place during #MegaEvent16 conference in Toronto, Canada, airlines need to blend traditional with modern means, be it for infrastructure, payments or targeted marketing:
IT infrastructure: While the role of the PSS can’t be undermined, airlines need to work around specific areas like fully calculating their own availability, and gaining grasp over schedule building. Yes, as much as carriers would like to embrace retailing platforms that are meant for today’s era, but one needs to be pragmatic when it comes to dealing with 3rd party companies that continue to have a significant say in IT and distribution.
Experienced airline executive Dean Dacko acknowledges that airlines across the world are keenly looking at a passenger-centric evolutionary process but are having difficulties in moving in that direction and implementing that kind of capability. “The main challenges lie in leveraging the legacy environment, that database environment through the PSS, that has for most part handcuffed majority of airlines for many years. It is being envisioned that customers need to be at the forefront when it comes to all the way they engage, they communicate and market them relevant offers/ services.” But legacy technology that dates back to 60’s hinders such aspirations, involves processes and ways that you file fares, package and deliver, and qualify how you can sell and distribute those airlines tickets worldwide, that is not allowing airlines to put customers first. “Airlines need to take the quantum leap into the future, to recognize that time has come to continue to work on capabilities, build on technology that doesn’t necessary build on an existing PSS. One needs to gear up for digital first, customer first business environment,” said Dacko. “Lots of time and resources have gone into this, but in 2016 and moving onto 2017, we are now reaching a stage where lot more tangible steps are being taken to build the requisite technology, requisite capability to shape the desired customer engagement, customer communication and ultimately the kind of customer relationship that will demonstrate all of this in a much more meaningful way.”
So airlines need to continuously refine their merchandising, e-commerce and API capabilities, plus find a mechanism that would result in faster speed to market. Airlines require platforms that offer business model control (rules based) and should feature modular open architecture.
Targeted marketing: Airlines need to look at every possible way of improving digital interaction. Ganesh Iyer, Senior Manager E- commerce, Qatar Airways, referred to personalization and behavioral data during the conference. “Behavorial data rather than static data is key, how do they (customers) react to a certain situation,” he said. Another executive referred to the significance of emerging XML analytics platform. For any carrier that is sending back an offer as per the request from an intermediary or a GDS (essentially this is what NDC is all about), there is also need to work with partners to understand how one can recognize a customer. So, for example, if a meta-search engine gathers information about a user, then what if membership number of a carrier is also collected for a user to benefit, then this piece of information can be read in the XML messaging flow. This way search data can be capitalized upon.
On another note, one also needs to assess how the so-called traditional touchpoints can be strengthened. Do consider competitive intelligence through email content - emails reveal consumer interest and behaviour. “Email is a unique identifier in the travel marketing ecosystem. There is a whole lot you can do with simple email, first name and last name to personalize the travel experience, to create unique micro-moments for your consumers,” said Dwight Sholes, Senior Consultant, Travel and Hospitality, Return Path. You really don’t need to let your customers fill long forms or extensive data analytics to start personalisation. Rather email in itself is a strong weapon. For instance, it is used as a login avenue for many websites. You can go into overlays, plugging in additional information from 3rd party databases for psychographic and demographic information. Email can be a strong foundation for working on targeting marketing.
Payments: Payment specialists also acknowledge that when it comes to rewriting or migrating legacy infrastructure, this isn’t a workable scenario. The best plan is to adopt technology that is modular in nature and can work as a stand-alone solution with scale and scope. It’s imperative for airlines to have a thin but feature-rich and agile payments layer within the enterprise. With that flexible framework in place, airlines can enable easy on-boarding, omni-channel payments, multiple PSP/acquirer connectivity, improved acceptance rates etc. For instance, airlines need to look at Apple Pay and Android Pay. Both are now making it possible to use OS-Pay through a web browser. There is a need to assess whether Apple and Android can improve upon the shopping experience, without really escalating processing fees. It also needs to be highlighted that fraud risk is being combatted when transactions are processed with ‘OS-Pay’ mobile wallets, as they avail biometric fingerprint technology to authorize a transaction.
Follow Ai on Twitter: @Ai_Connects_Us
First published on 24th October, 2016
Ai Editorial: Digital commerce is one journey, which every airline needs to explore on its own. Yes, mobility, cloud, social media, big data and analytics, and AI are universal for all sectors, but there are distinctive hurdles, too, writes Ai’s Ritesh Gupta
Consumers are starting to expect the gadgets they use, the experiences they indulge in and the brands they choose to understand them and deliver what they are seeking.
IoT or Internet of Things is paving way for an era of personal, contextualized selling opportunities.
Airlines, like any business, need to prepare for an extended ecosystem for consumer IoT to blossom. For instance, if a traveller is waiting at the airport lounge, he or she decides to use personal digital assistant and asks: “Can I have mango pudding during the flight? Is it part of my breakfast or lunch?” Is it possible for technology to answer this question? And can the price be known if the same traveller wishes to buy and can it be bought, say via Apple Pay, via the same device? Is this what is going to define digital commerce?
So today one needs to assess the prowess of mobility, cloud, social media, big data and analytics and artificial intelligence while gearing up for digital commerce.
When we talk of the travel sector, buying a book is quite different from booking a seat on an airplane, or even adding car rental and a hotel room to an itinerary. The IT set up that supports controlled-merchandising, the fulfillment part or consumption of the service is quite different. Yes, this simple analogy depicts how triumphing in two vastly different sectors - retail and travel - can be a different ball game. Overall, when we talk of digital commerce, no doubt airlines have to chart their own journey. Of course, there are areas that are universal, and all sectors need to look at – say cross-device targeting or content optimization. As Microsoft’s CEO Satya Nadella recently mentioned: business leaders are looking at engaging their digital customers, wherever they are. For their part, airlines definitely to overcome certain sector-specific challenges. We take a look where airlines can improve in the arena of digital commerce ahead of #MegaEvent16 conference to be held here in Toronto, Canada:
1. Content: Today digital commerce thrives on understanding the intent and the profile of the customer. But what’s the point if airlines despite investing in their product are unable to show the same product the way it needs to be shown. Also, the timing of matching intent with content needs to be perfect, too. So say, if I am looking at a flight that departs at 8am, then a sumptuous breakfast rather than a generic picture might do the trick. I just flew from New Delhi to Toronto, Canada for this conference. I wasn’t shown the food menu hours before the flight as I checked in (may be it was there, but not in the check-in flow). But the moment I sat on my seat, the in-flight screen showed me the list for dinner and breakfast. This at least prepared for me what was to be served over a period of 14 hours!
2. Omnichannel experience: How can airlines lay strong foundation for the same? One of the prudent moves is to invest in robust API strategy. This will also ensure consistency in what airlines have to offer. Recommendations are generally based on historical or real-time interactive information. Airlines intend to interact with their customers and prospective customers through a variety of touch points and timeframes. APIs enable efficient connectivity to these various touchpoints and value aggregators can utilize these airline APIs to enhance their value creation to their customers.
3. Technology: The utility of IT infrastructure, especially in legacy carriers, is being questioned. Be it for merchandising or payments, it is often recommended that its time for airlines to change. For example, every payment method has its own underlying technology. Every mobile device has its own operating system. And then airlines’ legacy infrastructure wasn’t set up for alternate payment methods. “As for rewriting or migrating legacy infrastructure, we’ve learned from others in the industry that this is not a workable scenario. The best plan is to adopt technology that is modular in nature and can work as a stand-alone solution with scale and scope,” said a source. As of today, an alternative is to separate the core PSS capabilities, which are essential to running any airline, from technology that is enables true brand and product differentiation. Carries are opting to control their own merchandising, e-commerce and API technologies, using platforms that enable airline control, faster speed to market, and flexibility – and move away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel. Airlines requires platforms that provides extensive business model control (rules based) plus strong product and channel management capabilities. These platforms must have a modular open architecture that fosters a partner eco-system for collaborations.
4. Being flexible to boost conversion: Conversions in digital commerce can take a strong beating if airlines aren’t flexible to let travellers buy the way they want. It generally takes lots of browsing sessions across various devices to complete one travel-related transaction. What if I am ready to share a date before which I wish to buy a particular travel itinerary – airplane seat, hotel, car rental etc.? Can airlines lead the process of offering me everything depending upon what all I searched for, originating from their website or mobile app? Or what about paying via Apple Pay? Have airlines been slow in embracing new payment options? If the customer elects Apple Pay, they wouldn’t have to worry about typing-in all of their cardholder information for each purchase; that data could simply be stored and recalled at will. As a result, customers would be less likely to abandon a transaction. Of course, this could also be a double-edged sword. There is a kind of balance between streamlining the process and encouraging customers to buy without first thinking through a purchase. As a result, this could lead to buyer’s remorse, which could mean returns or even chargebacks at a later date.
5. Digital enterprise: Every business needs to gear up for behaviorally targeted, device-agnostic, user-journey-centric experience. As Oracle points out, this “seems part science-fiction, part psychology, and part technology”! The pursuit of personalisation means gathering data, and collecting it, and then making the most of first party, second party and third party data. Also, there is a need to look at new platforms that allow entities to leverage artificial intelligence, machine learning and advance analytics. All of this also means investment. And this is where the difference also comes in when we talk of airlines vis-à-vis other sectors. While certain operational areas can be digitized, certain can’t be automated with the same pace. With technology becoming more pervasive, airlines need to digitize customer interactions. At the same time, all processes and staff involvement needs to be crafted accordingly.
Even as airlines look at digital commerce, like any business organization, they need to ensure they don’t spoil the customer experience One needs to ensure messages or ads don’t annoy a buyer, say post purchase communication. There is a need to use CRM, marketing automation or campaign management offerings to manage multichannel interactions. It can be a long journey, but a fruitful one too.
For tweets from our conference in Toronto, Canada (Oct 24 – 26, 2016) – follow #MegaEvent16
First Published on 11th October, 2016
Ai Editorial: As NDC moves along there will be evolving versions of the schema that will impact the specific XML messaging, in that messages themselves will change over time – new ones added, existing ones modified, etc., writes Ai’s Ritesh Gupta
IATA’s XML-based data transmission standard continues to be in the limelight.
While a section of the industry, be it for airlines, meta-search engines, GDS companies etc. is marching ahead with pilots and deployments, it is also being questioned whether a set of standard messages are sufficient, why to rely on only one standard in XML, or even can there be any better messaging format.
One way to assess the progress is to look into how various stakeholders are looking at projects using Offer and Order management messages whose schemas are compliant with the standard NDC message schema.
- How are things coming along as far as capability to receive and send NDC messages is concerned?
- How the schema from the airline will impact the established workflow?
It needs to be clarified that IATA certifies the messages, not the underlying architecture and processes or workflows.
· Schemas for shopping and, order management: There are schemas for shopping and, order management, and the end result is creation of Offer ID and Order ID, featuring order creation, ticketing, issuance, payment authorization and BSP reporting. So when we say different airlines have different objectives/ expectations from NDC, does it mean some are only working on schemas for shopping and, some are working on schemas for both shopping and order management? So yes, certain carriers may opt to go end-to-end; others may only end up controlling the offer and wouldn’t execute. Or, the execution on the offer becomes more of a tactical/ economical decision rather that a strategy decision. As per my recent interaction with Farelogix, the company has 20 airline customers that have adopted the NDC schema for the API that the team has built for them. The actual schema version will vary from baseline to 15.2, but all 20 are controlling and creating the offer (Offer Management). These airlines are creating and delivering just over 1.4 billion airline offers annually through their NDC API. (Not all offers are accepted and executed as tickets).
· Capability to receive and send NDC messages: It is vital to know how does the capability to receive and send NDC messages vary as per the version of a particular schema. Messages may change and improve with new versions thanks to the addition of new elements (e.g., sending video images) or enhancements to existing elements (e.g., split PNR improvement). Airlines will adopt new versions based on whether or not the newer versions address a required business need or if they simply want to update their version usage. In today’s world of deploying an NDC API between airline and intermediaries, there will be evolving versions of the schema that will impact the specific XML messaging, in that messages themselves will change over time – new ones added, existing ones modified, etc. So if an airline has deployed NDC schema version 15.2 and a newer version becomes available (15.4), then the airline would need to work with all their intermediaries that deployed version 15.2 in making the upgrade to 15.4.
· Connectivity issues: The biggest issues are in understanding the various workflows that have been established by a GDS or OTA and understanding how the schema from the airline will impact the established workflow. “It is also being prepared to make what we refer to as “implementation accommodations” to how the GDS or OTA want to utilize the specific schema elements. There is also the concept of the end user being able to “interpret” how a particular schema element is utilized. This is why it is very important for either the airline, or it’s developer proxy such as Farelogix, to have the technical resources (people, documentation, etc.) available to support an NDC API implementation,” says Farelogix CEO Jim Davidson.
In one of our recent articles, Amadeus stated that the whole industry and airlines in particular, are coming to the realisation that having a set of standard messages is necessary but not sufficient. “Connecting systems with these standardised messages is the easier part, but it takes a lot of knowledge and industry understanding to turn them into successful distribution tools. Most vendors underestimate the complexity of the integration part,” mentioned Hazem Hussein, Executive Vice President, Airline Group, Amadeus Asia Pacific, Turkey and Eastern Europe.
Dealing with different versions of schema is all about change management.
Airlines must learn how to build, deploy, manage and upgrade APIs in a way that streamlines the task of developers. Proprietary APIs tend to create “one-off” implementations that make repeatability more complex and therefore more expensive. Carriers also need to upgrade their internal systems to be able to support API-based distribution. So as carriers’ set up is gearing up to process all distribution-related transactions, it isn’t going to alter the inherent proposition of GDS, i.e. the reach they deliver to airlines. Rather they need to move on from being a transaction focusing company to a supplier of enterprise-like applications to the agency communities, based on the effective aggregation of hundreds of airline APIs. As for NDC certification, it needs to be mentioned that certifying one NDC message for one single ancillary service as part of the existing, opaque and flight-centric shopping process is easy. Leveraging the full scope of airline APIs to re-think the search and booking process and the experience delivered to users (whether they are agents or the end-consumer) is another story. Lastly, talking of online travel agencies and to a certain extent flight search engines, these organizations also have to consider their ‘flights’ offering. With carriers pushing more ancillary services as stand-alone or as part of fare families, it is imperative for online intermediaries is to evaluate how to make flight search and shopping more transparent.
How are airlines going about distribution of content via API connectivity, considering that different airlines and intermediaries can have different API gateways for exchanging XML messages?
Today there are IT specialists emerging as new aggregators and are also offering NDC adapters.
It comes down to the value proposition that can be created between airline and intermediary. NDC is really only the catalyst to enable this new value proposition. If the airline can send new and relevant content via an intermediary that can display and transact on this content better than another intermediary, then competitive pressure gets created which is beneficial for the entire travel supply chain.
Where is NDC headed in the next 12 months? Hear from senior industry executives at the upcoming 7th Mega Event Worldwide 2016, The Event for Loyalty, Ancillary & Merchandising & Co-Brands, to be held in Toronto, Canada. (25 -26 October, 2016).
Twitter hashtag: #MegaEvent16
Follow Ai on Twitter: @Ai_Connects_Us
First published on 3rd October, 2016
Ai Editorial: Is airline IT and distribution status quo really evolving with NDC? Ai’s Ritesh Gupta interacts with Amadeus’ Hazem Hussein about NDC, and whether a set of standard messages is enough to bring about the change.
IATA’s NDC initiative is about to get into the last 12 months of the original 5-year timeline marked for this standard’s mass implementation.
But there is one pertinent question that continues to get raised. Why would travel B2B conglomerates, mainly Sabre and Amadeus, alter their synergistic and profitable distribution and IT businesses? Yes, NDC’s key objective is to improve upon selling via indirect channels, but why would these organizations alter their established volume-based, transaction-based business model?
So it all boils to assessing whether NDC can shape up change – right from inventory over distribution to sales.
If we look at the way the likes of Amadeus and Sabre are associated with airlines, how airlines are picking and choosing the available options available in the wake of direct connect strategy? For instance, in case of Lufthansa and Siemens, the new arrangement uses Amadeus Altea and Amadeus- owned Cytric OBT, and GDS being bypassed.
Considering that Amadeus and Sabre are deeply entrenched in the overall IT, distribution and sales, a couple of carriers challenging the status quo doesn’t seem enough. So if we talk of airlines being in control and what has changed (say the way fare filing, scheduling, availability etc. are accessed), then there is a mixed response as of today.
“With the exception of a few airlines, most of them are at the mercy of their PSS or CRS provider,” this is what a senior industry executive told me when I asked him about where do airlines, cumulatively as an industry, stand today in their quest of being in control of their inventory, distribution and sales.
GDS companies aren’t perturbed at this juncture. “The GDS gives airlines a geographical and industry reach that would be very hard for them (airlines) to replicate. 64% of all bookings outside home market come through the indirect channel,” said Hazem Hussein, Executive Vice President, Airline Group, Amadeus Asia Pacific, Turkey and Eastern Europe.
In order to get Amadeus’ perspective on NDC, Ai’s Ritesh Gupta interacted with Hussein.
“Everyone is working out how to optimise NDC implementation project timelines,” says Hussein. He pointed out that cost and difficulty of integration remain quite high and may be difficult for some parties to address. However, with experience, overall project lengths should be reduced. “The fastest way to bring a product to the market remains the traditional approach relying on ATPCo filing. On our part we aim to launch soon on the market our NDC-dedicated solution Amadeus Altéa NDC that will benefit from our level 3 NDC-capable certification granted by IATA,” shared Hussein.
· “NDC is not only an airline topic”: The core mission of aggregators like Amadeus is to acquire content in many different ways. GDSs have been using EDIFACT and teletype messaging for many years, but Amadeus has also been distributing LCC carriers with XML connectivity since 2008. “Working with some key LCC customers, we found some specific ways to handle dual connectivity,” said Hussein. He says with the surge of interest in NDC, the industry has to think about the transition period. “We believe that airlines should be free to choose which connectivity makes the most sense to their business, constantly re-evaluating the cost-benefit ratio of changing connectivity. At Amadeus, we work hard not only to secure content acquisition the way airlines want but at the same time ensure that we minimise the impact to our subscribers. Travel agents obviously prefer to consume content that does not disrupt their processes, in particular when it comes to comparative shopping, mid- and back-office integration and customer servicing and this has a major impact on the success factor of any strategy involving the channel.” He added, “Amadeus recognises NDC is not only an airline topic but affects the travel industry across the board. We have the ambition to make it profitable for all parties.”
· “A set of standard messages is necessary but not sufficient”: All stakeholders, including airlines, are coming to grips with the fact that having a set of standard messages is necessary but not sufficient, said Hussein. He said connecting systems with these standardised messages isn’t tough, but it requires certain expertise to turn them into successful distribution tools. “Most vendors underestimate the complexity of the integration part,” he said.
· NDC and standarisation: It is highlighted that not all airlines choose to participate in and utilize the same standards. Sabre and Amadeus need to support standards for all suppliers of content – including hotel, car, rail and cruise content for example. While a base level of standardization is valuable, there is always going to need to be some level of customization. Amadeus has managed several NDC-XML implementations. Airlines have different objectives and there are different versions of schema. NDC is still in its early stages and it will take time to reach full maturity, says Hussein. “There are concerns around the cost to support implementation, employee training to use NDC-enabled processes and ongoing product and technology support,” he said. There is a need to bring the economies of scale in the value chain. “So, yes, it is costly now but we expect easier integration in the future as all stakeholders’ needs are taken into account,” said Hussein.
· NDC and merchandising: The ability to offer bundles has existed in the GDS. The only new element here is that this initiative is using NDC messaging to distribute these offers. NDC XML can bring advantages and efficiencies, acknowledged Hussein. One such efficiency is that it can allow for better automation in the distribution of airline products. Other types of connectivity deliver the same end result, but the process can be more efficient with NDC XML that also introduces the offer and order notions. As NDC XML is only a messaging protocol, it needs to be powered by advanced merchandising solutions that can serve traveller needs across their whole journey, and support travel agency requirements. This is where Amadeus has been investing to enable airlines and travel agents meet their travellers’ needs with the right offer, at the right time, at the right touchpoint.
Amadeus is also allowing carriers (for example, Etihad) to display images of its product and ancillary services, such as exit row seating.
Hussein said as an IT provider to airlines, Amadeus has been delivering NDC XML-specific enhancements to its leading product suite, and is already using NDC XML in its solutions, such as:
· Amadeus Flexpricer uses the NDC XML AirShopping verb.
· Amadeus Ancillary Services Catalogue uses the NDC XML FlightPrice/ServiceList verbs.
· Amadeus Rich Content uses the NDC XML FileRetrieve verb
As for supporting ATPCo Branded Fares, Amadeus offers airlines the choice to file their branded fares centrally or directly in the Amadeus system. “And uniquely, Amadeus Fare Families includes a proactive up-sell prompt boosting the revenue potential for each seat sold,” said Hussein. “For travel agencies, the full mid and back office integration means no disruption to normal workflows.”
As also Hussein acknowledges, having a standard for XML connectivity such as NDC XML will help standardise future such integrations, delivering greater efficiency across the industry.
The industry is witnessing GDSs consuming airline APIs but how much penetration of the same as of today? Or how much of it is part of point of sale agency volume?
Also, are PSS/ GDS specialists deliberately slowing down the movement till they are ready with their respective merchandising systems that will enable airlines to create their offering dynamically, refining of their retailing and distribution systems to enable the efficient and effective delivery of enhanced airline content at the point of sale, and complete integration of their merchandising, and retailing and distribution systems with their respective PSS suites?
A lot to look up to when NDC’s 5-year timeline gets over in the next 12 months.
So is such disruption deep-rooted or will GDS/ IT conglomerates find their way out? Hear from senior industry executives at the upcoming 7th Mega Event Worldwide 2016, The Event for Loyalty, Ancillary & Merchandising & Co-Brands, to be held in Toronto, Canada. (25 -26 October, 2016).
Twitter hashtag: #MegaEvent16
Follow Ai on Twitter: @Ai_Connects_Us
First Published on 26th September, 2016
Ai Editorial: Talking of major outages this year, it is being pointed out that at no time was “any mainframe system down at Southwest or Delta”. So do we need to target mainframe, explores Ai’s Ritesh Gupta
The efficacy of core airline IT systems is under scrutiny. Be it for routine operations or preparing for data-driven merchandising, airlines are expected to improve upon the current state of affairs.
No doubt the industry on the whole has suffered owing to sudden cancellations and delays, and it is being underlined that the current crop of IT systems is susceptible to faltering because of the way they have been for decades. But is the industry really at risk today as legacy systems run core operations? Or there is some other way to look at the whole issue.
“I don’t think we can put the blame solely on technology,” asserted Roland Heller, Managing Director, TIK Systems.
“It’s a combination of technology, man-made complexity of business processes and human errors. For sure, mainframes are complex and difficult to configure and optimise, but availability wise they are as stable as new generation systems such as Navitaire, Radixx, HITIT, IBS, WorldTicket etc.,” said Heller.
Defending the “mainframe”
Recent well publicised system outages at Southwest Airlines and Delta have seen a wave of attacks on legacy mainframe airline systems.
Why is the mainframe the source of ire for many?
“Those two major outages that disrupted “000s of passengers” – the most important of all were network router and electric power (fire) related,” said an airline IT executive. He referred to a couple of key issues:
· At no time was any mainframe system down at Southwest or Delta.
· At no time was any mainframe system suffering from performance problems.
“In fact, in Delta’s case, it was experienced staff who knew how to use “green on black”, who could revert to native mode who saved the day because the “New Gen” front end was down – its famed Tier 0 reliability relegated to a statistic on a beancounter’s spreadsheet. So what is that people are so scared about? Why was the “legacy” mainframe attacked so strongly after those major “outages”. One aspect is definitely risk. Managers are uncomfortable with the thought of a highly specialised “non-standard” programming workforce – normally highly trained in IBM Assembler and now often staff in their 40s and 50s, disappearing by attrition, retirement etc,” added the executive.
Heller also referred to an incident. “The main difference is the impact of an outage. When Virgin Blue had an outage of 21 hours no one really noticed, except for the passengers. Other providers offer system-availability of estimated 99.6% - that’s almost a 3 hours downtime a month. Does anyone notice? No!”
Senior management ignorance
Heller added, “Based on my experience the weakest point with all the systems is networking and not computers. I actually think that backend servers are stable and with a proper setup you can reach 99.999% up time and that’s pretty good. However, as soon as humans touch these boxes, issues emerge. Too many people think they understand what they are doing just because they know how to operate a mobile phone.” He emphasised that IT is no longer being taken seriously.
The airline IT executive also mentioned that those that are firing bullets at the mainframe are almost with exception those who have never programmed on the IBM Mainframe, never studied Assembler language and in many cases never used a “green on black” interface. “In airline parlance, they are the “children of the magenta line” - they would follow the “magenta line” because they can’t fly without automation. For “automation” read “Server Farm” and “Java”. The world of ones and zeroes – pure Mainframe coding, is somewhat alien to them. Mainframes can’t do everything. But what they do they do better than any other IT Technology because there is nothing more pure than the world of ones and zeroes. Mainframes give high throughput, high performance, fast recovery and high reliability.”
Another executive referred to the possibility of a delivering “Amazon-like travel experience”. He questioned the involvement of e-commerce specialists in shaping up areas like modern retailing in this industry. He says, essentially the industry is “building more complexity on top of complex systems most of the people do not even understand any longer – and then we blame the hardware or technology when the people do not really know what they are doing. How many people are still alive who understand the full scope of such systems?”
Specialists point out to airlines like Air New Zealand. These carriers harness the full power of the mainframe and combine it well with other technologies. They have in their mainframe system and they have invested in their staff. The way forward is to get a balance between mainframe and decentralised technology.
Those who believe in the power of mainframe recommend that one needs to invest in the mainframe, invest in the mainframe staff, who are committed to their jobs and use its capacity to the fullest. “Embarking on a mantra of “get rid of the mainframe, get rid of the mainframe” is doomed to failure,” summed up the airline executive.
In case of switching over to a new PSS, such projects are complex. And then there is debate around whether to go for best of breed offerings or not. Are airlines going to stick to a single partner/ vendor with an established presence stretching over decades or there is room for embracing change by being flexible?
For instance, there has been talk of how to gear up for today’s data-driven omni-channel merchandising. As explored in our previous articles, featuring comments from e-commerce, IT executives and industry consultants, “extending PSS” or “Out of the box” approach seems to be a likely option for FSCs as of now. E-commerce specialists tend to assert on developing a new system instead of relying on the existing PSS. And at most, if one has to continue with existing PSS, they recommend real time PSS data reliable interfacing to external contemporary systems where the proper data aggregation could be maintained. This is where airline IT executives tend to agree and as one of them would say: “Offload as much data as possible. But keep the mainframe for its phenomenal message processing capability. Use the data which is there on the mainframe, but do that analysis offline.”
It’s time we create something fruitful rather than playing the blame game.
Some of the questions that need to be answered at this juncture:
· What are the reasons behind IT outages?
· How prone are airlines’ IT systems to malfunctioning and how to prevent the same?
· How to modernize existing IT set up? What is there to learn from a mainframe programmer?
· How to ensure the journey or passenger experience isn’t negatively impacted in case there are delays and cancellations?
Among those who suggest change, this section of the industry recommends digital infrastructure based on core platforms that are highly flexible. Airlines are still using very inflexible platforms. These are either based on shared community models or platforms that require a lot of development / programming to facilitate every change. To create and manage rich omni-channel customer experience, airlines requires platforms that provides extensive business model control (rules based) plus strong product and channel management capabilities. These platforms must have a modular open architecture that fosters a partner eco-system for collaborations.
Interestingly airlines tend to mark 60-70% IT budget for running and maintaining existing IT set up in place.
As for coming up with a new IT system for a business like running an airline, can we expect IBM, HP, Unisys, Sabre, Amadeus etc. to deliver? Would there be a competitive edge for any carrier? How about reducing complexity, going after cost control and also bring up system availability to almost 100% - say counting on cloud!
How is the industry trying to shape up airline IT infrastructure? Hear from the cream of the industry at the upcoming 7th Mega Event Worldwide 2016, The Event for Loyalty, Ancillary & Merchandising & Co-Brands, to be held in Toronto, Canada. (25 -26 October, 2016).
Twitter hashtag: #MegaEvent16
Follow Ai on Twitter: @Ai_Connects_Us