Ai Editorial: Depicting airlines’ sales offering aptly, distributing it flexibly too
First Published, 4th April 2016
Ai Editorial: Airlines are gaining stronger control over what offers they wish to display, where, to whom and in which format in the era of omnichannel digital commerce. Ai’s Ritesh Gupta takes a look
Air search technology has come a long way. The blend of data and technology is enabling airlines to craft offerings that go beyond only price and schedule.
If we talk of meta-search engines, carriers can avail valuable propositions when it comes to sharing of data. Be it for quality (say complete fare pricing, branded offers etc.) and quantity (not worrying about futile hits, look-to-book ratios etc.), the efficacy of crafting customized sales offers is coming to the fore.
A case in point is the progress that Lufthansa had made in the last 12 months or so.
Lufthansa has been availing a pre-computed pricing offering, putting together what offers to distribute and also decides on the intermediary for the same. A major highlight is swiftness with which amendments can be done in fare, distribution frequency and markets for any existing or new partner. With such offering, the group managed to double the number of meta-search business partners last year.
Pre-computing and live computing
Lufthansa recently credited Vayant for its air search technology that enabled the group to scale its reach in the meta-search category. The group is pushing customized sales offers to meta-search engines without doing a single pricing and shopping hit to its host PSS.
I interacted with Eric Dumas, CEO, Vayant to understand how the blend of live computing and pre-computing pricing can optimize the results for an airline.
As Dumas explained, a live computing transaction means performing an air pricing calculation using real-time data. Such requests return the most accurate flight search results that can be booked by the traveller. Price changes or expired offers – while still technically possible – are minimal.
On the other hand, with pre-computed shopping, one generates flight offers (including branded offers) in advance and then store them in a smart environment that updates in response to changes in the outside world.
“The precomputed concept turns traditional search on its head: for one, you gain sub-second response time. The economics of pricing and search are transformed. You don’t have to worry about look-to-book ratios because looking no longer comes with a transaction cost,” said Dumas. He added that this opens the door to various kinds of value-added shopping tools like affinity shopping, dynamic packaging, long-range calendar shopping, best-price calendars, etc. “The benefits of this approach are significant, in terms of marketing and enabling a richer user experience. It’s perfect for airlines in case they intend to transform themselves into a rapid click-to-buy platform.”
The blend of two
Travel sellers worldwide can choose their own mix of live and precomputed options and find the best balance for their business. The logic of whether to pull results from a precomputed shopping system or to perform a query on the live systems is determined by the airline through a business rules engine, mentioned Dumas.
It’s all about flexibility, enabling travel sellers to achieve the optimum mix of distribution channels, feature richness and responsiveness. Airlines can handle high volumes of search queries from meta-search engines, introduce transaction-intensive applications (such as maps, calendars, various web, social and mobile promotions) and flexible search menus to search by budget, affinity, month and more - without touching their GDS or host.
“It (mixed live-transaction and precomputed shopping model) provides airlines with distribution control,” said Dumas.
Explaining further, he said airlines push custom high-accuracy data and modify the pricing and shopping logic per partner. Search times vary from milliseconds when precomputed data is used to a few seconds when live. For airlines that is crucial in order to enhance their ability to improve the travellers’ shopping experience and satisfaction and amplify their brand equity by offering unique search experience to the travellers.
Signs of progress
Not too long ago options for distribution of different formats and sales offer data through indirect channels were limited.
“NDC launched by IATA for the development and market adoption of a new, XML-based data transmission standard has unsealed the capability for the airlines to become better retailers using dynamic and media rich content,” said Dumas, who added that airlines no longer need to be limited to information such as price and schedule as the NDC standard allows airlines to transmit much more detail on their service offering to their partners.
The inclusion of rich content paves way for differentiation early in the travel buying process, and better description of the services included in the fare. Also, airlines have full control over how their products appear on distribution channels through visual presentations and comprehensive form of content (videos, pictures, description of the product etc.).
Dumas said the NDC will enable airlines to advance ancillary sales and make booking and search process more attractive to customers as well better predict passengers’ interests and likelihood to buy. Also to establish product positioning and time-to-market approach, access to a full and rich air content – all of which will help create a better understanding of their passengers and more accurate personalised sales offers.
For airlines it is vital to stay in control of their sales offers, attune personalization and dynamically craft their offerings to give customers the most relevant choice at any given time, through any point of sale, any channel, direct or indirect and via any device.
Hear from senior industry executives about how airlines are gearing up to be in control of their offers and distribution at the 10th Ancillary Merchandising Conference (to be held in Barcelona, 21- 22 April 2016)
For more info, click here
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