28th January, 2020
Ai Editorial: Be it for offering a complete trip itinerary themselves or being a part of a travel-related transaction on any ecosystem or a superapp, it is imperative for airlines to a find way to facilitate the same, writes Ai’s Ritesh Gupta
Digital commerce is increasingly becoming intuitive and personalized, making it easier than ever for shoppers to close in on what they are looking for. An area where the likes of Amazon and Netflix excel relates to predicting the intent of the customer, with algorithms coming up with a precise recommendation.
Now imagine looking for a travel itinerary on any digital platform.
If it is on an airline digital platform, an itinerary could include flights, featuring both full-service airlines as well as low-cost carriers. Plus, it could include diverse transportation options, for instance, flight + ground transportation. Chances are that the airline you chose for your search won’t be able to produce desired results, including for the first option owing to the fact it might not have any arrangement with another carrier beyond a certain destination.
Another aspect is how to be a part of today’s digital economy, where an airline just comes into the picture with its flight or even travel inventory, for selling via a superapp or Amazon.
Travel retailing can’t be compared with shopping for books or paying for video streaming. The consumption pattern and the fulfilment part of taking travellers from one destination to another is unique, quite different from other product categories. But airlines do acknowledge the need for simplifying travel.
Evaluating the first aspect i. e. related to multiple flights (an itinerary featuring multiple airlines) hasn’t been easy. Till date it is not easy for airlines to connect their own products with those of other airlines. There are several limitations when it comes to traditional interlining and code-share agreements , for instance, the choice of partners. In this context, the emergence of concepts such as virtual and real interlining is a welcome change. A player like Air Black Box is enabling airlines to connect inventory, irrespective of reservation system, via API integration, and sell cross-channel ancillaries. Another company, virtual interlining specialist Kiwi.com, recently started powering the sale of other airlines’ tickets on airasia.com. A point to note – there are no competitors’ flights offered on routes that are already operated by AirAsia. As for the work being facilitated by IATA in this space, it is being highlighted that without the interline feature, IATA’s XML-based data transmission standard, NDC, is incomplete.
According to IATA, the Shopping and Order Management schemas will enable airlines to send requests for offers and associated services to their interline partners, and manage the resulting booking and servicing, including for ancillary products. As highlighted during one of Ai’s conferences last year, there are critical financial changes that come along with the adoption of NDC. Be it for no use of filed fares to no pro-rates to the creation of e-tickets (only goes away with the ONE Order implementation), a lot of areas are being evaluated as airlines look to control the offer.
Questioning the status of NDC and interline aspect, a section of the industry suggests that the work behind virtual interlining products by certain players - dohop, kiwi, Air Black Box – could possibly be a starting point for implementing NDC interlining.
Beyond their own products, the industry is also pointing out that airlines can tap mobility as a service (MaaS) segment, offering an interconnected experience via their own digital assets covering all of the transportation requirements. Entities like Lufthansa Innovation Hub assert that there understanding of travel and mobility is no longer linear and transactional. It points to the fact that airlines are working around ways to look beyond the air product, plus they are looking at integrating their offering into any ecosystem or even a relatively new platform such as a superapp that they haven’t worked before.
Also, for a travel e-commerce company to be a complete retailer, an integral part is to present travellers with an array of travel products, offer choice, facilitate a frictionless transaction and support them all the way to consumption and fulfilment.
It is heartening to observe that the entire industry is attempting to 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 also trying to make the most of datafication and IT trends to be a part of a digital economy. It would be worth following, how by using NDC as the distribution protocol, and creating the OneOrder standard, travel merchants would streamline the entire travel journey to make it frictionless and seamless. All of this is going to pave way for those players to be a part of travel retailing, too, mainly from the non-travel commerce arena, ones that don’t have any hint about Electronic Miscellaneous Documents! Let’s see how carriers collectively build on their much larger pool of APIs and third-party content providers to serve the travellers on any platform the traveller opts for.
Keen on exploring topics related to digital commerce? Ai has planned #AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020: