We recently caught up with Colin Evans, the Chairman of the Collinson Group. He shared his insights in to innovation and what the Collinson Group is currently developing.
One of these key initiatives is Airport Testing for COVID. Currently, one testing site at Heathrow Airport is working for British Airways, American Airlines and Cathay Pacific to do on airport testing prior to departure.
You can watch the full interview online and hear more about contactless and other developments. You can also access the video via this hyperlink: click here
Recorded 16 November 2020
22nd October, 2019
Why should travel e-commerce players opt for a headless commerce architecture? Because it enables companies to conduct commerce in any digital touchpoint with no integration required.
API-led or headless commerce as a concept is being increasingly considered to offer a unified brand experience across all the touchpoints - web, voice, social platforms etc. Headless content management capabilities refer to a solution that stores, manages and delivers content without a front-end delivery layer.
In such approach, commerce and content offerings are detached from the front-end and linked straight to all customer touchpoints through APIs. Airlines, too, can focus on the same to control their respective ancillary offers, for instance, air ancillaries, by abstracting and enriching their API to support any front-end delivery.
For a deeper understanding of how all of it works and can pave way for ancillary revenue via 3rd party channels, Ai’s Ritesh Gupta interacted with Barcelona-based caravelo’s CEO Iñaki Uriz Millan. Excerpts:
Ai: What does headless air commerce refer to and why it is important from an airline’s perspective?
Iñaki: The term ‘headless’ comes from ‘headless computer’ that is a computer system or device that has been configured to operate without a monitor (the missing ‘head’), keyboard, and mouse; typically controlled over a network connection.
In the context of e-commerce, ‘headless e-commerce’ refers to the use of e-commerce platforms whose components are exposed through an application programming interface as the primary mechanism of integration, in contrast to the graphical user interface. In short, it means being able to conduct commerce in any digital touchpoint with no integration required.
Ai: So why is it important to airlines now?
Iñaki: It allows airlines to deliver on their omni-channel vision. As the number of valuable potential touchpoints increases (such as IoT, Instagram, chat platforms, etc.) the need for a zero-implementation distribution solution becomes more relevant. Especially if it also ensures airlines maintain total control of the offer.
Ai: How can headless air commerce help in controlling the ancillary offer, for instance, air ancillaries?
Iñaki: By doing two core things: simplifying the integration process, and reducing the expertise and development required. Tools like widgets or code snippets can be directly deployed by marketers, providing an end-to-end merchandising experiencing. This reduces the time to market for new channels and ensures a harmonized outcome.
Ai: If we talk of creating digital, can you simply how should one approach front-end and back-end development?
Iñaki: That's the immediate benefit! As an airline, if you have to re-render your seat map or recreate your booking engine for every new app, chatbot or mini-program it dramatically slows down your time to market and increases your cost and inefficiency. Instead, through headless commerce, your back-end is embedded in your front, making the deployment eminently scalable.
Ai: Can you simplify what does abstracting a digital product means?
Iñaki: Abstracting a digital product in the airline industry is to include the business logic (the relevancy of the product to user), rendering, session management and other elements in the back-end. The abstraction comes with the inclusion of the business logic, session management and other elements in the back-end. The front-end then just renders and paints what the back-end generated dynamically. Simple content or even entire flows.
Ai: Going forward, more travel companies are looking at framework-agnostic web components as part of their digital strategy. Can you talk about the significance of this?
Iñaki: It is a first step towards a more open ecosystem of content and service providers. We hear more and more that airlines want to decouple their business logic and merchandising from their host system to reduce dependence. Headless commerce comes out of this approach: it is a logical way for airlines to improve their distribution at the same time as reducing their own complexity.
Ai: Airlines should focus on - abstracting and enriching their API to support any front-end delivery. What does this mean and how the same can help an airline considering that it could be working with so many 3rd party OTAs/ ecosystems?
Iñaki: Airlines want to be dynamic retailers and intend to merchandize their product anywhere that is relevant to them and not be held back by integrations when looking at new channels. In effect, that is what abstracting the airline product enables - frictionless deployment of an airline’s ancillary catalog in unlimited 3rd parties.
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First Published on 13th November, 2018
A flight disruption management solution based on blockchain has been worked out by TrustaBit to automate the notification and compensation process in the airline industry.
Blockchain technology isn’t having easy time establishing its use cases in certain disciplines, for instance, in the arena of loyalty. Specialists point out that blockchain paving way for a completely exchangeable currency within various loyalty programs might not be what program managers from the outset would be interested in or even doubt it’s exclusivity in doing certain tasks, for instance, interchanging a loyalty currency into cryptocurrency can be done by another technology. This sentiment came to the fore during the recently held Ai’s MegaEvent in Long Beach, California.
At the same time, blockchain is also being counted upon to sort out specific painpoints in the travel industry. One of them is data reconciliation service in the hotel distribution business, cutting down on losses associated with transaction disputes. Among the other areas, a flight disruption management solution has been worked out by TrustaBit to automate the notification and compensation process in the airline industry.
Saritta Hines, founder and CEO of TrustaBit, spoke to Ai’s Ritesh Gupta about the solution, why the company chose a private blockchain rather than a public blockchain, the status of the offering and lot more. Excerpts:
Can you explain what made you go ahead with the decision to start this venture?
Saritta Hines: One summer, I built an Ethereum mining rig with my daughter. That project piqued my interest the underlying technology of Ethereum, which is blockchain and smart contracts. I began looking for an industry that needed an upgrade and the airline industry came to mind. Travel is a trillion $ industry, yet it is also one of the most antiquated and archaic, so when the idea of using blockchain and smart contracts to automate the flight delay compensation process came about – I knew I was on to something!
What is the problem that your company is trying to sort out? What traditionally has been done to sort this problem?
Saritta Hines: Currently, when flight disruptions occur, there is no streamlined way to receive compensation. Passengers correspond with airline customer service agents, hold for long periods of time and never quite know when they can expect to be compensated. Competing solutions facilitate a back and forth conversation with the airline on behalf of passengers who initiate contact and pay a fee for their services. TrustaBit is different because our customer is the airline, not the traveller. Our solution will be white-labeled and integrated within the airline’s systems to automate and streamline their processes. The passenger does not need to initiate contact or download a new mobile app to receive compensation.
What's your observation around how pain points or even business use cases in travel are being served blockchain as of today?
Saritta Hines: Pain points in the travel industry run the gamut, affecting both airlines and travellers. Airlines have difficulty notifying passengers of flight disruptions in a timely manner and struggle to issue adequate compensation without employing manual processes. As a result, passengers are left frustrated and loyalty wavers. To top it off, airlines suffer losses of $60 billion per year due to flight disruptions.
Why do you think blockchain technology is the best solution to this problem?
Saritta Hines: Blockchain can benefit projects that: have multiple validation and control points within their systems, have multiple actors consuming the data, and if they need to track data quality and data lineage from day one our solution is an optimal use case for blockchain technology as it offers increased security and prevent fraud, which costs the airline industry an estimated $858 million per year.
Can you talk about the technology that is being used by Trustabit?
Saritta Hines: TrustaBit is powered by blockchain, which provides an immutable ledger with one source of truth. Rather than using a public blockchain for sensitive airline API data, we utilize Hyperledger Fabric, a permissioned blockchain. A private blockchain network requires an invitation to be sent out to all network participants so that the business knows who is performing the consensus protocol and who has a copy of the ledger. It establishes trust, transparency, accountability and it does not require mining or expensive computations to assure transactions.
Smart contracts code the business rules outlined by our clients and are written to the blockchain. Once a triggering event occurs, the smart contract executes.
What's the status of your offering, is it live or under pilot phase?
Saritta Hines: Our POC is live and can be accessed at app.trustabit.io. Currently, any combination of numbers can be used as sample data in order to test drive the POC. We are in search of a few pilot airline clients, and are speaking to a few prospects fitting specific criteria, to participate in beta testing.
What according to you are the major challenges for your solution to pick up in the industry?
Saritta Hines: One challenge is implementation. Some airline systems are still using legacy systems. Implementing our solution will not be a one size fits all approach as we will have to be sure our technology is compatible with systems that are currently in place. If this is not the case, we will have to take the necessary measures to make it so.
There have been use cases of blockchain technology, for instance, payment settlement that are active today. Why do you think blockchain is often criticized? Isn't there overestimation of what all blockchain can do?
Saritta Hines: As with any new technology, we will see phases of innovation and early adoption leading up to more widespread adoption of blockchain. The internet is an example. During the .com era, the internet was full of things like cat videos and perceived as a breeding ground for spam and scammers. Similarly, the perception of blockchain has been that it is largely used by criminals. This notion is beginning to fade as more fortune 500 companies begin to employ new use cases for the technology. I believe that as we learn more about the power of blockchain, the early critics will join us as blockchain enthusiasts! I am not sure there has been an overestimation of what blockchain to do. Quite to the contrary, I believe we are yet to see its true potential. This technology could very well change the way we live.
What are your expectations from blockchain technology going forward?
Saritta Hines: I believe the future of blockchain will bring some of the more antiquated industries into the digital age. I have seen the perception of blockchain grow tremendously. A few years ago, most people only associated blockchain with the “dark web” and criminal activity. Now, enterprises are curious about blockchain use cases and are looking for ways to incorporate the technology into their systems. I have also even seen companies implement low code methods to develop smart contracts that can be used on multiple blockchain platforms.
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First Published on 16th March, 2017
The disjointed ways of running an airline are over. If transactional systems or any information processing system can’t contribute in knowing how a passenger’s journey shaped up, then a gaping hole would remain in digital transformation.
In this context, what role do airline-specific IT systems need to play going forward? This question needs to be answered proficiently as IT is being interlinked to many moves, be it for supporting new industry processes, paving way for personalization at every touchpoint or a retailing platform that can help in selling anything that an airline intends to sell. As witnessed in the last 12 months or so, a couple of possibilities that are being explored are:
· Moving merchandising, pricing, scheduling and availability out of the PSS
· Opting for a platform that features Offer Management and Order Management alongside PSS
These options are being explored at a stage when airlines are showing signs of transitioning into digital organizations. There are several areas that are being looked at - new roles, how to be data-driven etc. IT is expected to play a vital role in such transformation. Traditional IT companies need to respond considering the fact that legacy systems and technology can stand in the way of digital innovation for airlines.
IT specialists were slow to respond, acknowledges Beijing-based TravelSky Technology’s Lars Gaebler, Director - Marketing and Sales. The company recently launched QUICK PRS, a hybrid system that encompasses features from a traditional Passenger Service Solution (PSS) and blends them with e-commerce tools, a tactic to capitalize on the emerging opportunity of retailing.
““We” as vendors on the PSS side did not do a very good job (earlier),” says Gaebler, but to his team’s credit with this new offering, one that has been in making for two years, TravelSky is stepping up its basket of offerings. Gaebler is clear that medium and small sized airlines have to speed up the adaption of ecommerce practices and selling of non-air ancillary revenues. “Otherwise we will see a lot more airline funerals in the future globally,” he says.
Five critical areas for airlines to consider:
1. Open and accessible systems: Gaebler asserts that systems need to be open and accessible. “That means that master data such as booking data, schedules, fares and profiles should be available for direct and real-time access for export to other systems and further it needs to be possible to update or enrich data by other third party systems. Certainly that is the job of IT vendors and we are working on this with standardized XML technology,” he said. “That means, we need to destroy data silos and old complicated message exchange systems and protocols. For example, no point why schedules are sometimes loaded manually in a Maintenance System, Flight Operations Software, Crew Scheduling Software, Reservation System, Accounting System and Controlling Tools. A single source of something essential as a schedule should be achievable,” he explained. Focus on open APIs, ensure architecture is easy to understand (pave way for flexibility in modifying systems) and open in terms of data access.
2. New processes, one platform: Airlines are evaluating the possibility of incorporating new processes, such as IATA’s One Order, in their IT set up to come up with a consistent experience across the booking funnel. One platform that’s a blend of both offer and order management, standing out for business intelligence, passenger identification module etc. for a seamless journey (being aware of the current flight, current order, servicing needs etc.). Does TravelSky’s new offering QUICK PRS support Offer Management and Order Management as planned by the IATA? “Yes. In QUICK we created a system which is able to do so. However, there are isolated business cases justifying the initial offer by QUICK to be updated by a third party system, for example in a dynamic packaging scenario or some forms of auction pricing. We are not religious about that QUICK needs to be the one and only system for an airline, however it is important that offers stay controllable and can be easily managed by the airline staff in charge. I believe the PSS of the future needs to become a Passenger Retailing System with open architecture and the capability to store and service order items, no matter if it is a flight or a bottle of champagne as a special treat for a honeymoon couple, hence no more traditional e-ticket structures,” said Gaebler.
3. Working in a cohesive manner: Gaebler cautioned that transformation isn’t just about IT alone. “Simplifying the business is key - airlines need to revisit the system landscape and their organizational set ups and hierarchies. Data silos are most of the times a result of organizational structure and therefore that needs to be addressed. It is foolish to think that with a bit of high-tech implemented, the digitalization of the company is done. I think in the Flight Operations world there was something similar some years back and as much as Operation Control Centers nowadays combine tasks such as flight control, crew scheduling, pax control and so on, commercial departments need to be linked up and work hand in hand,” said Gaebler.
4. Retailing: Airlines can target the second wallet by having a bigger say in the journey. Airlines need to build a layer of intelligence and display destination images, videos etc. as per the trip motive, lifestyle preferences etc. to target travellers early in the booking funnel. And further capitalize on this to target booking of ancillaries or for that matter something not done earlier. “Approaches like ordering food from a grocery store to be delivered at the return from a journey, like Lufthansa is trialing right now, are certainly something to look at out for,” says Gaebler. The diverse set of platforms operated by various suppliers can be a major hurdle. For instance, in case of hotels, how to integrate a property management system from a hotel company and sell the same based on real-time confirmed inventory? But progress is being made in this arena with a single platform approach. Also, airlines need to focus on ensuring whatever is going to be offered is being created dynamically in real time. This needs to encompass certain business specific factors, such as load factor, inventory left etc. Capabilities need to be in place to dynamically fine-tune the offer based on data inputs. Booking engines, too, are becoming sophisticated to handle complex itineraries and also looking at flexible booking flows, considering the fact that shopping for a flight can take multiple sessions.
5. Be clear, be bold: Gaebler asserts that airlines need to be clear about core values their respective brands represent. “From there, it should be fairly easy to productize and make clear demands to IT vendors to address problems which are holding back the execution of the strategy,” he says. He also expects alliances to “play a role in it, as the connectivity between carriers and therefor products should be seamless”. “I think it is the time for responsible managers in airlines to make clear decisions and commitments even so that might hurt a little in the beginning by potentially losing some customer groups, I believe that they will eventually come back if the product is right. So have courage to be different!” summed up Gaebler. And what if airlines decide to break away their main components related to retailing out of the PSS, then what is the level of risk as far as serving the passenger in a consistent manner is concerned? “Well the big question mark is simply, how much are you in control? Depends, on how many systems an airline intends to use, the administrative burden will increase and you would still need to consolidate all your data (passenger profiles, financial data, behaviour data etc.) in order to serve your customer best. Not to lose relevant information might be the key challenge as well as the constant fight against data silos.” He also added that the shift of main components out of the PSS at present times might only be an option for Tier 1 airlines, where a business case can be made.
By Ritesh Gupta
The Ai Editorial Team
Hear from experts about digital transformation and the role of IT at the upcoming Ancillary Merchandising Conference, to be held in Edinburgh, Scotland this year (9-11 April, 2018).
For more info, click here
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Real-time machine learning allows the system to identify fraud before it happens and also automates the entire fraud management process to completely eliminate the need for manual reviews, writes Ai’s Ritesh Gupta
Amidst all the talk around fraudsters finding ways to tame the system, one area where progress is made to stop them is machine-automated fraud management.
Airlines are being recommended to consider the prowess of a decisioning algorithm, with the mandate of maximising revenue at an optimal level of fraud risk. This is expected to make the airline’s fraud prevention methods truly agile at maximising revenue while minimising fraud.
One company that has been making steady progress in this arena is CashShield. The online fraud risk management specialist has been in news for their $5.5 million Series A round.
The machine learning algorithms used in fraud management today can be divided in two types: supervised machine learning and unsupervised machine learning. Supervised machine learning, or traditional machine learning, involves dumping historical data to train the system, while unsupervised machine learning lets the system learn on the fly with real time data collected.
So how can one rate the efficacy of machine learning in managing fraud today considering 3 metrics - manual reviews, chargebacks and conversion rate?
Today’s fraud management systems use only supervised machine learning, which is a reactive approach to treat fraud, says Justin Lie, CashShield’s CEO.
“It is true that traditional machine learning has improved fraud management to a certain extent – automating some processes, collecting more data to churn and analyse, but it still falls short from real time machine learning. Without real time learning, supervised machine learning is unable to predict and counter unknown fraud attacks, since it is reliant only on the data on historical fraud attacks. Additionally, these systems can only produce probability scores for each transaction, therefore still requiring a great amount of manual reviews. With the three metrics in mind, traditional machine learning systems are scoring only a 3 out of 10, its full potential,” explained Lie.
Lie asserts that unsupervised machine learning, or real-time machine learning, is far more effective as compared to its supervised machine learning counterpart. Its proactive approach to fraud allows the system to identify fraud before it happens and also automate the entire fraud management process to completely eliminate the need for manual reviews while keeping fraud rates low. Conversion rates also improve with the higher accuracy at proactively identifying genuine customers and fraudsters alike without any additional friction or blocks, he added.
“If merchants are simply rooted in relying on supervised machine learning, it is hard for them to move towards real time machine learning,” said Lie. “Many merchants are also still reliant on manual reviews, which means that even if they were able to improve their machine learning algorithms and systems, they would always still be held back by the end process of manual reviews and human errors.”
Making the shift
So instead of implementing a fraud prevention strategy that requires long gaps in training machines with data sets, travel companies should shift towards real time machine learning (or real time automated) fraud systems to get ahead of the fraudsters.
Commenting on the sort of progress that has been made as far as real-time automated fraud prevention is concerned, Lie said when airlines and travel companies rely too much on traditional machine learning – and the use of historical data, unknown cyber-attacks without any prior information will pass through the system undetected.
Real time machine learning differs from traditional machine learning in its ability to identify the adversary attempting to trick the system, learning on the fly with each incoming transaction of the fraud attack to match the patterns and block the transactions immediately.
He pointed out that most solutions in the market with machine learning are developed by data scientists who are familiar with traditional machine learning, or merely adopting machine learning algorithms to automate traditional fraud screening methods while still maintaining a heavy reliance on human labour for manual reviews on derived probability scores.
“A probability based approach is basically just predictions that are insufficient to help merchants make decisions. On top of that, cyber criminals are constantly trying to trick the system by feeding manipulated data, making probability measures fall short in its accuracy. This reactive fraud screening methods puts travel companies far away from real time automated fraud prevention, which eliminates the need for manual reviews. Fraud prevention should look to combine multiple disciplines of passive biometrics, financial algorithms, behavioural analysis and predictive analytics to be closer in achieving real-time automation,” he said.
Lie spoke about relevant issues that can impact the fraud management as well as the conversion rate:
· Rule-based systems: Rules-based systems are in general reactive and probabilistic solutions, which is why they are unable to prevent fraud before it happens. Probabilistic frameworks only seek to train the system on historical data, and do not possess the expertise to move beyond probability scoring for fully automated decisions, thus crippling the system on manual reviews. Because of the need for manual reviews, rules-based systems also start to show cracks at high volumes, and reduces the company’s ability scale on demand. Merchants should be realistic about rules-based systems’ flaws and limitations - mainly on their hindrances to scalability and restrictions to instant delivery.
· Being wary of blacklists: Lie says blacklists rarely work because hackers will never use the same credit card information twice, while whitelists are inaccurate since whitelisted customers can be compromised anytime. Also, historical data (which blacklists are categorised as) lose relevance very quickly in the face of unknown cyber threats, since it is difficult for the machine to predict new fraud attacks without any prior information. Real time machine learning can help against blanket blacklists and whitelists by focusing on the customer’s behaviour instead. It works with real time live data collected on the merchant’s website, where the system trains itself with each incoming transactions to identify fraud patterns instead.
· Setting right expectations from new developments: Merchants need to gear up for Dynamic 3DS and Dynamic Authentication in an earnest manner. He says the problem with Dynamic 3DS is that it is controlled by card issuers and is therefore still working with the same set of data as before. They are unable to tap on the merchants’ data for more information on fraud and are not as smart and flexible as they tout themselves to be. Therefore, merchants cannot expect Dynamic 3DS to be a be all and end all solution to solving fraud woes. As for Dynamic Authentication, it is very counterproductive, considering the added friction placed on users. On average, only 70% of dynamic passwords delivered are used, while merchants see a 40% reduction in purchase conversion rates after introducing Dynamic Authentication.
· Measuring false positives: It is a difficult endeavour as there are many assumptions to be made – that all wrongfully rejected customers actually show their unhappiness in some ways to the airline or travel company or that lesser reports of customers’ calls to customer service is necessarily indicative of lowered false positive rates. “To complicate matters further, many fraud detection solutions in the market like to flaunt their false positive rates (or ability to lower it) to airlines and travel companies, based on ‘internal research’. Instead of auto-block thresholds, merchants should shift away from hard rules and move towards utilising behavioural analysis – looking at the permutations of variables and patterns – which is a much more targeted approach to block hackers and yet minimise false positives at the same time,” said Lie.
· Counting on data: As explained by Lie in a recent interview, there are two general types of data that one can collect – industry data and unique merchant data. Industry data includes information on coordinated fraud attacks, which may be shared across different airlines as all airlines are equally vulnerable to coordinated hackers. Unique merchant data would vary from airline to airline, based on the individual information each airline collects or is able to provide. He recommended that airlines to amplify and triangulate the data, analysing the data through multiple permutations and combinations so as to better understand the fraud patterns left behind by fraudsters. For instance, passive biometrics data including mouse cursor movements, keystrokes, words per minute or activity data including wish lists, purchase history or even seemingly insignificant data points like whether or not the user has chosen to subscribe to the newsletter can all be relevant information collected and used. With the data collected, airlines can churn the data through various permutations and combinations to identify potential fraud patterns
So airlines should direct fraud prevention efforts on behavioural analysis instead, which is compatible with all various payment methods, currencies and devices. A further step in sustaining or even improving conversion rates for airline can be to develop a decisioning algorithm.
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First Published on 8th September, 2017
From no member, no 1st party data to 1 million members in 16 months to gearing up for loyalty 2.0, the journey has been quite an eventful one for Hong Kong Express Airways’ reward-U program, writes Ai’s Ritesh Gupta
What is loyalty 2.0? What is the next loyalty paradigm?
This isn’t mere hypothesis any more. There is action that is emerging now.
Consider the example of reward-U, a lifestyle and loyalty program being managed and operated by Hong Kong Express Airways. Launched in April last year, the program has over 1 million members, serving a growing segment of Millennials. The team asserts that there is a robust foundation in place now (based on dollars spent and not miles flown, few restrictions, any seat any time) with a “liquid currency” (rewarding everyday spending). There are other aspects that stand out even today.
Take the case of reward-U Crew. Typically everyone in a family isn’t an expert or even interested in ascertaining how to make the most of a loyalty program or spending. But via the reward-U Crew feature, members can set up their own “crew” (maximum of 4 members, plus 1 Captain who ends up being the in the charge of all existing and future points and will decide how to use them). This not only encourages people to let their family or friends join or plan a trip together (since they are spending on non-travel items) but more importantly, it adds a “social” element that today’s consumers are so much used to.
In order to be a true disruptor in the loyalty space, reward-U’s Hong Kong-based CEO Steven Greenway is focusing on 5 areas:
· Mobile app – an integral for any sort of activity, could be opening an account, customer service etc. The popularity of mobile-based loyalty programs is on the rise. According to study on loyalty in Asia by Nielsen last year, 69% of loyalty program members in Asia Pacific are more likely to participate in a loyalty program if a mobile app is available, compared to 56% globally.
· Gamification – planning to bring lessons from the gaming industry to loyalty. The objective is to “gamify” events, activities etc. in order to stimulate the member activity within the program. The plan is to roll this out in the next 6-12 months. But gamification isn’t really new, yes today consumers’ have different ways of consuming content, it could be “emojis” for instance on messaging platforms. “Gamification is basically about incentives, everyone loves something “free”. So a user can ask someone to join the program and gains points for it. It could be for stimulating a certain activity, says surveys featuring members. Yes, it isn’t new but it helps in triggering repeat activity, getting them more involved. We find many people are open to incentivizing and enjoy that type of behavior,” mentioned Greenway.
· Virtual Currency - high liquidity, minimal restrictions, increase earn / burn etc.
· The concept of “Tribes” - based on overall activity, for instance, travel, retail, food etc. and a member can be in multiple tribes at any time base on a minimal level of activity. This is scheduled for Q1, 2018.
Tribes – a result of data analysis
“We believe that legacy tiers (as part of FFPs) tend to be one-dimensional. They are too linear base on “status” points etc. typically related only to flying. Tribes is about recognizing your everyday spending and everyday activity patterns. So if a user prefers to go out ,they could be a part of wining and dining tribe. Accordingly, there would be relevant content, plus incentives and promotions to step up the participation as per the user’s activity and the tribe they are part of. That way you have a home, there would be affinity with certain things. We are stimulating that affinity, that activity and one can be a member of multiple tribes – so sports, frequent travel etc. So it’s not one dimensional. This way we are going to leverage the program in a far more effective way,” explained Greenway, who added that the team has been analyzing data, encompassing one million-member base, and as a result has come up with the concept of tribes.
Going forward, it’s not just about segmentation but also 1-to-1 personalisation.
“Starting a loyalty program is always difficult considering that there is no data. But we are 16 months old now, we have been accumulating data, spending patterns etc. We are getting a picture of what people are doing. The association with a low-cost airlines doesn’t mean that our members are low spenders. They are high spenders. They might save money on airfares, but they can spend (relatively lot more) money on accommodation and so forth. Their retailing activities are not low-cost either, they are high-spend. They are bargain hungry but not averse to spending, too.
“(The tribes initiative) is a direct result of spending pattern that the team has been observing in terms of consumption and activity,” he said. “And it is really about promoting that further.” So this means partners, too, get precise and actionable information about the behavior or preferences of the member base. “How reward-U and its partners will interact will depend on the dynamics within the Tribes themselves. We will overlay this approach with gamification to further incentivise engagement within a Tribe,” shared Greenway.
Being clear with data
So in this case there is 1st party data and 2nd party data about members that is available (according to Greenway, there are 25 partners and the pipeline of partners from airlines, dining, retail, transport, telecoms, travel & leisure exceeds 200; aiming to secure 50+ by the end of year). Organisations tend to struggle with such sources. So what’s Greenway’s recommendation as far as managing data and coming up with actionable information is concerned?
“If you are just looking at data, then you aren’t really doing anything. (In our case), we take specific learnings and then we act on it, and then observe (what happens). The problem is everyone sees data and don’t really take action. We try to experiment from what we are seeing, try to stimulate activity or some type of behavior. Rather than accumulating data in huge amounts, we are taking snapshots and acting on it.
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What sort of systems, engines, data etc.are needed to make the most of the product that is owned by airlines? How their ongoing technology contracts limit their own capabilities, and what can be done to improve upon the same? Ai’s Ritesh Gupta spoke to Davidson about the same.
First Published on 26th June, 2017
What can step up the average order value every time a passenger shows the intent of buying an air ticket? How to deliver a sublime passenger experience – one that depicts readiness on the behalf of the airline to answer any question that arises at any stage of the journey via any touchpoint?
In order to optimize monetization as well as deliver a personalized experience, airlines need to move on. Their operational capabilities, the efficacy of their technology and distribution partners etc., everything is under scrutiny. The entire fraternity – be it for airlines, travel technology specialists, the industry body IATA, distribution partners etc. – is in the process of sorting out complex business processes that continue to impede progress.
So how are airlines responding to the need of being in control of their own offering? How are issues related to technology and extraction of data from the current airline-run IT infrastructure being addressed?
Ai’s Ritesh Gupta spoke to Jim Davidson, CEO of Farelogix. Excerpts:
Ai: Airlines are often being singled out for being slow to embrace change for different reasons. They tend to miss out on creating the offer themselves, what they should offer in real-time and not showing the product despite investing in the same, be it for aircraft, meals etc. How are airlines going about countering limitations such as their own IT systems or the archaic process of making an offer?
Jim Davidson: In my opinion, airlines in general are conservative when it comes to change. This is typically rooted in the extreme focus on safety and operations. So when it comes to changing a distribution process where the airline takes over control of creating, controlling, and delivering their offers through an NDC-aligned methodology, it is not that surprising that quite extensive study is required at various levels within an airline. What’s interesting is that many airlines have already completed this initial study. Farelogix observes a certain level of caution regularly during initial discussions with airlines, and this is understandable.
Ai: So when do airlines realize what they are missing out on?
Jim Davidson: The evolution of airline offer control generally begins with a few exploratory meetings about what creating and delivering the offer really means from an airline perspective. Usually this early exploratory stage is driven by maybe two individuals assigned to an “NDC initiative”.
It then progresses from there with more individuals and departments getting involved. This is when you know an airline is serious about taking control of their offer. This is also the time that airlines usually realize that they are either behind when it comes to having the right technology in place, or that they are locked in to someone else’s technology (e.g., PSS and/or GDS) that will not enable them to create, control, and deliver their offers. At this stage, the more motivated airlines look to supplement either their own technology with one of more offer engines, or they confront their PSS with an option to “add-on” a few pieces of new technology to their PSS. This, by the way, is also the point when many airline NDC initiatives get shut down by the PSS, as the airline has neither the clout or commercial ability to do what it desires.
Ai: What is the next step for full service carriers to getting closer to creating their own offer?
Jim Davidson: That is the question. What will they do?
In my opinion, they have two options:
1) Give in to the PSS and hope that the PSS will eventually deliver some capability they need; or
2) Push for a PSS renegotiation that gives the airline more freedom to add their own managed engines that will interoperate with the PSS. Here again the airline faces the obstacles of clout and locked down long term commercial agreements that prevent them from expanding their own technology presence.
The problem for airlines is that they are leaving tens if not hundreds of millions of dollars in new revenue on the table while they wait for their PSS or GDS to catch up. And the reality here is, the PSS and GDSs will never catch up. They simply can’t for two reasons:
1) They are too big and entrenched in existing systems they have in place, and those systems were never designed to do what we want them to do; and,
2) Other companies that specialize in offer engines and distribution-related technologies, like Farelogix, are continuing to rapidly innovate and enhance their offer engines, making it extremely difficult, if not impossible to ever catch up. Some would argue that with enough resources ($$$), the PSS/GDSs will be able to “leapfrog” into a better position. However, in today’s world of development cycles and new technology advancement, “leapfrogging” is a dying art.
Ai: Can you talk about significance of supporting ATPCO-based fares as well as non-ATPCO fares to be managed directly by the airline the way WestJet is going about it? How this needs to be interoperable with other offer engines for off-PSS merchandising, availability calculation, and schedule building? How NDC is playing its part in letting airlines create the offer?
Jim Davidson: NDC is essentially defining the model and workflow of the airline creating and delivering the offer.
The very nature of the NDC initiative is to create a robust schema that enables any airline to create and deliver its offers to any distribution channel or third party entity.
Having a standardized schema for this purpose makes this a very scalable, repeatable, and over time economically beneficial process. Like any new process change, especially in an industry heavy on legacy technology and institutions, the initial change of process, workflow, and utilized technology requires significant investment from existing players and new entrants. Here, new entrants have a clear advantage over the legacy players, which is why you still see NDC push-back from the legacy players.
Ai: The approach of airlines for selling their core product and even air ancillaries needs to evolve. Can you cite a couple of examples where revenue is being optimized or average order value is going up because of differentiated content that can be pushed via API-led distribution?
Jim Davidson: There are numerous examples: United Airlines and Air Canada utilize optimization algorithms for premium seat pricing. Westjet uses dynamic pricing capabilities on its Westjet Direct channel. Other airlines use optimized pricing scenarios for upgrades, lounge passes, priority boarding, and more. Farelogix merchandising (FLX Merchandise) and pricing (FLX Shop & Price) engines are used by these airlines.
Ai: What are major challenges as far as interlining is concerned – selling to servicing to financial settlement? Does this hamper direct creation of offer? How are IATA’s initiatives taking care of such complexities going forward?
There is certainly a new level of complexity when it comes to offering additional content from interline partners. I do not believe that these complexities hamper airlines wanting to directly create their offers. It seems that the logical adoption flow is starting with online selling and servicing of additional content, moving into the alliance with these capabilities, followed by unaffiliated interlining. It will obviously take a bit of time, but IATA is doing a lot of work in defining standardized workflow processes and schema elements to enable NDC interlining capabilities.
Hear from experts at the upcoming Controlling Your Offer Symposium, featuring live demonstrations that take NDC, dynamic pricing, revenue management and merchandising to the next level.
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First Published on 24th April, 2017
Airlines need to look at several areas, including the organizational impact, IT, issues associated with access to data and their innate nature to detest change, in order to embrace digital transformation.
Where do airlines stand today when we talk of delivering a seamless, relevant experience throughout the passenger journey?
Ai’s Ritesh Gupta spoke to Orlando, Florida-based Ryan Harris, Director of the Americas, JR Technologies, about the same:
Ai: Can you explain what sort of transformation is required by airlines – IT infrastructure and APIs - to gear up for offer management, order management and customer management in the best possible manner?
Ryan Harris: There is not an easy answer to this question, mainly because the operations and business goals of each airline is different than any other airline. But, it starts with internal education. The stakeholders within the entire corporate structure need to know what is coming and how it will affect not only their own business line, but also all the other lines in the company.
Next important step is to set your organizational goals and diligently plan how you are going to get there. Some of the biggest difficulties I see for most companies won’t be the technical changes, but the organizational changes that come with that through the changes in required business functions. For example, with a complete transition to NDC distribution and One Order, there is no longer a need to file fares. What do you do with your fares department, which is sometimes a rather large asset of human and information assets? Do you just cut the labor and salary cost? Do you transition them to other departments? If you transition them, how do you plan the required training while they are still providing a business-critical function? These are the types of issues that I see as a much bigger challenge to address, not just the technical side.
But, of course, you can’t just forget the technical side. This is an industry transition, not just a company, so while you may be fully ready to jump in and get into the Offer-Order management pool, your interline partners will likely still require the legacy connectivity to be maintained and you will still need the legacy systems to distribute through traditional GDS channels until a critical mass is built in the NDC Aggregator channel to replace it.
Ai: Flydubai has worked out end-to-end PSS API in public domain. How do you assess moves like these when we talk of collaborative approach towards serving passengers in the best possible manner?
Ryan Harris: Public APIs and the entire open-source community, I personally think, have been some of the greatest innovators in the digital revolution since the beginning.
Making things public and open generally leads to exposure to people outside the box. They can think of things that some of us in the industry just can’t conceive. Keeping things closed forces tunnel vision and can stifle creativity.
I think the industry is starting to come around a little bit on releasing public API’s, at least high-level. For example, the NDC, and eventually One Order, XML schemas are currently available for public download through IATA. This means that anyone can get them and create any sort of interface that they want, a fact that IATA itself has leveraged through its several Hackathons. I’ve been to a few of them now and it’s interesting to see how people from outside the industry want to interact with the industry. Most are good, some are questionable, but there are a few brilliant ideas that come from some of these participants. Events like that are only possible because of the open-source approach that IATA is taking on the industry’s behalf.
Ai: How can the power of APIs enable airlines to reach out to audience at the right time via the interface they chose to interact with? For instance, for instance, if I am chatting with a friend on WeChat or Facebook Messenger and planning my next flight, how can a link for search and booking be worked out by various partners via APIs?
Ryan Harris:That is very much up to the limits of the individual airline, which may be decided by either the willingness or ability of their system providers. Some of the airlines with the greatest ability in this area are the ones that run their own systems completely and can do whatever they want to do with it. The problem is, there are very few airlines in the world that either want to take that level of involvement or can afford to do it.
But, this also gets us back to the question of the open API. The airline industry is, by its competitive nature, very adverse to openness. We are also, by our safety-conscious nature, very resistant to change. An airline or a provider can fully publish interactive APIs to the public today, and it would likely be picked up and built upon in creative fashion. But, I remember a few years ago, there was a little bubble for apps that could consolidate all your loyalty points and show you in one screen what your balances were and I found it quite useful. But then one airline blocked access, then another, and another, until eventually there was no source for these apps to access. The reasons varied from security to lack of brand exposure, which after all, is the actual goal of a loyalty program, but the result was that the airlines removed that data source from the public domain and the innovation that was built on that data was quickly destroyed.
So, can something like this be done today? Probably. Will it be easier tomorrow? Likely. But it’s going to be up to someone in the industry to open the door and let the people in to do it.
Ai: So, how can airlines serve passengers in a seamlessness and relevant manner throughout their journey? Can the blend of data, cloud, IT, content and emerging consumer technologies propel ancillary revenue?
Ryan Harris: Knowledge is power. There are entire industries based on nothing more than the data surrounding an individual person’s movements and economic activity. There are likely a lot of things that would be completely possible from marketing, promotions and sales prospective through the data available in today’s mobile devices and the Internet of Things. There are only three issues that I see causing limitations, and technology is not one of them.
The first is consensual, as in most countries, companies are required by law for you, as the consumer, to opt-in to allowing the collection of that data by a company. The second is legal, as again, most companies are limited by the law as to what they can do with the data you allow them to collect.
To be honest, the third limiting factor, in my opinion, is what I call the “Creepy Factor”. I still get a little skeptical when an idea or a product that I was just talking about in a face-to-face conversation shows up in an ad on a website. Maybe it’s just coincidence, but maybe not, I don’t know. But, the fact remains that most people are not prepared to fully give in to the artificial intelligence big data machine telling us everything we want when we want it, even though it is pretty much possible today. If you build in too much of this predictive AI, you run the risk of spooking your customers and seeing exactly the opposite result that you were looking for.
So, yes, it is possible, but with some careful restrictions and customer education.
Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this week.
Date: 25 Apr 2017 - 27 Apr 2017;
Location: Mallorca, Spain
For more info, click here
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First Published on 27th March, 2017
flyiin is 100% API-based online marketplace that promises to show travellers offers that are relevant to them, and in doing so provides airlines entire control over the distribution of their product, writes Ai’s Ritesh Gupta
How comfortable is an 18-inch economy seat? What is the meaning of “customisable lighting” in an aircraft? What sorts of ground transportation options are available at a certain airport?
These are just a handful of questions that a passenger might contemplate while booking a seat on an air plane. And considering the “fickleness” of a consumer in the digital world, how can airlines present their product in the best possible manner when one is looking for the same?
There is no point in making investment in a new aircraft if the same can’t be conveyed to the traveller and that too in a manner that adds to the joy of flying.
In this context, digitisation of operations is rightly being strived for, by drifting away from being technology-centric processes that this industry has over the years followed. Collaboration via APIs is one route that entities, including airlines, are increasingly embracing, and this means the distribution status quo is set to be challenged.
Also, if more airlines are pushing their offerings via APIs, what sort of opportunities is there for start-ups?
Berlin, Germany-based flyiin is the process of crafting a new online marketplace that is 100% API-based, playing the role of an aggregator and working out a new sales channel.
The company recently signed a pilot agreement with Lufthansa Group to take part in the beta phase of their offering. The start-up doesn’t rely on GDS technology. Rather the team has developed their own search and booking technology, plus it is capable of aggregating APIs from the airlines. And even if there is lack of standardization in APIs, flyiin would work on the normalisation of APIs, and then facilitate search and booking (via request and exchange of data, could be content or inventory). So essentially flyiin would exchange data as per the version/ interpretation of the airline, and eventually transform the airline’s response message to NDC 16.2 version. Till recently, the platform could normalise APIs from six airlines, based on different versions of NDC (1.1.3, 15.2 and 16.1).
Ai’s Ritesh Gupta spoke to flyiin’s CEO Stéphane Pingaud about the status of the venture. Excerpts from the interview:
Ai: How does flyiin compare with existing online intermediaries such as online travel agencies (OTAs) and meta-search engines (MSEs)?
Pingaud: There are quite a few differentiating aspects to OTAs and MSEs but the most relevant one for the consumer is that the search - and subsequent booking, payment, ticketing and servicing transactions take place directly with the airlines. When you search for flights (and services) to your desired destinations, your search is sent to all airlines operating the route directly or through their hub. That means the flight information, the fare and any fees for extra service are returned by the airline. Your search result information will always be valid and fares available. Not always the case with OTA or MSEs.
Secondly, as importantly, you will get the visibility of the full costs of your flights prior to booking them. If you search for flights between London and New York, and wish to check 2 bags, select your own seat and be able to change or cancel your flights if needed, flyiin will return the total costs, inclusive of these services. So you can easily compare flight options irrespective of the various bundled fares and ancillary services approach of each airline operating the requested route.
Ai: Why are you calling flyiin a new sales channel?
Pingaud: So flyiin is an online marketplace for air travel, where airlines and travellers interact directly throughout the entire flight planning and purchase (and post-purchase) process. There are no technical intermediaries between the airlines and their customers. Like any marketplace in other verticals and industries, for airlines our sales channel is semi-direct. They keep the entire control over the distribution of their product throughout the whole purchase process.
Ai: What’s your vision for flyiin, and how are you looking at filling the gap in current planning and booking?
Pingaud: flyiin aspires to be the number one brand and product for online flight planning and purchase. How? By bring the both the comparison power of OTA/ MSEs with the in-depth content of airline channels. But once again, by minimizing the complexity of individual airline offerings and making it easy for travellers to compare these offerings in one screen, including of the services that are important to them and available in each flight option.
Ai: Can you elaborate on revenue generation? Also, how do you intend gain traction, looking at growth hacking?
Pingaud: I can't elaborate on the revenue generation at this stage, as we will use the 16-18 month beta phase to get the data that will help us define a proper business model with the pilot airlines. Although new for airline distribution, our business model is typical of a marketplace. Travellers will search, shop, book, pay and get their tickets directly with the airlines. They will be in the flyiin digital environment (like Amazon) but in the background, airlines through their APIs will be in charge. It goes beyond facilitated bookings and encompasses 'facilitated search'.
About growth, the next 18 months - financed by our seed round - are going to be all about building the best possible marketplace product. Growth hacking will be after we secure series A.
Regarding white label and other user channels like messaging channels etc., yes we will consider all of those, to make sure that travellers can use flyiin wherever they are, but once again right now of our focus is on building the core product and supporting API aggregation platform and get as many airlines as possible on-board.
Ai: How has flyiin come up with a technologically advanced, NDC-based distribution model?
Pingaud: We knew the only way we could really deliver a much simpler, more transparent and user-centric experience to travellers was to disregard existing search and booking technology from the GDS (and other fare search system providers) and instead leverage the APIs from the airlines (many of which are based on the NDC standard). As a consequence, we built our API aggregation platform which connects to each airline API and 'normalise' these APIs into the latest version of the standard, since all these API are based on different versions of NDC (or are not NDC-based) and/or interpret the standard differently.
Ai: Can you explain how are you looking at commercializing all offerings of airlines, be it for core offering like air ticket, or air ancillaries and even bundled fares and other ancillary services?
Pingaud: Our approach to flight comparison is to ensure that travellers can compare all flight options returned by all airlines being queried, inclusive of the services that are important to them (number of bags for check-in, select my own seat, flexible fares etc.). We do by showing the fare from the right fare family i.e. that includes the requested services.
The plan is to also associate to each flight option a 'flight details page' that will enable airlines to showcase the experience to be expected during that flight, using a combination of media assets and product/services descriptions.
Ai: Can you explain how flyiin would contribute in terms of real-time data exchange that can help airlines to push the right offer at the right time as per the context or intent of the traveller?
Pingaud: For every search made by travellers through flyiin, airlines receive an XML search request messages that will include not only their desired O&D and dates and number in parties, but also the services that they wish included with their flights. If the traveller is logged in, they will also know who is searching for flights and adjust their offer accordingly. Secondly, we’re using a technology for our front-end development that can potentially provide data about what travellers are interested in (services, destinations etc.) which we would potentially shared in real time and anonymously, but it is too early to talk about this.
Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year.
Date: 25 Apr 2017 - 27 Apr 2017;
Location: Mallorca, Spain
For more info, click here
Follow Ai on Twitter: @Ai_Connects_Us
First published on 7th March, 2017
What are the major obstacles to fostering a personalised customer relationship?
Experienced airline executive Dean Dacko asserts the challenge is three-fold: the lack of a full 360 view of the customer behaviour including customer touch points outside of marketing + competitive search and transaction activity; the inability to convert customer data into actionable customer insights to deliver relevant customer value in real-time; the fear of making the major investments required (technology, systems, processes, talent) without a guarantee of return on investment success.
Data is housed in specific silos across the organization. It doesn’t allow for a single view of the customer. So how to interact with customer, how to communicate with them across various points of their journey? Customers are ahead, and airlines aren’t able to deliver personalised relationships that entities in a lot of other customer verticals are already delivering. It needs to be noted that there could be brands that belong to organizations that aren’t more than 15 years old. They probably started with a platform and business proposition that doesn’t entail involvement of a legacy system. But recognize that their whole ability to succeed and grow lies in personal relationships. So the customer is expecting that the brands they appreciate the ones they want to build a relationship with and the ones they want to transact with are the ones that truly understand them and deliver a value proposition that’s unique to them. In the context of understanding what a personalised relationship looks like - it is about delivering personalised customer value proposition unique to customers. This makes customers feel “You get, you understand me, you anticipate my question before I pose it and you answer/ present me with a relevant offering”. So when talk of that moment of truth, customers always find that brand to be in the scheme of things as per their booking funnel. “Understanding is important rather than offering free stuff,” said Dacko. “So it’s the notion of using personalisation in growing that capability to create a personalised relationship that makes them believe that you are truly investing in them. This reflects in the trust that is developed. So the notion of where the future is going in terms of understanding the importance of personalisation is really something that is understood how the customer is evolving not just in the airline space, but almost every other vertical worldwide.
Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year.
Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain
For more info, click here
Follow Ai on Twitter: @Ai_Connects_Us