Ai Video: Selling trip essentials and more, are airlines ready?

14th June, 2019

How are commerce strategies of airlines evolving, and what sort of expertise is required to sell more?

The fact that airlines are going beyond selling seats and air ancillaries, and even gearing up for today’s digital travel ecosystem is exciting. For example, the idea of counting on data to run a two-sided marketplace (running a platform and creating an ecosystem of retailers around it) or pushing a B2B business line via API exemplifies the same.

Also, going direct, for example, for selling vacation packages means airlines are competing with OTAs in the arena of customer acquisition. Offering relevant recommendations, crafting a superlative UX design, content/ pages, search optimization, paid advertising, email campaigns etc. demands solid preparation. “All of this (being a retailer) requires a different mindset (in comparison with just being operationally-focused),” says Iztok Franko, founder, Diggintravel

Franko, who was in London recently for Ai's Ancillary Merchandising Conference, spoke about:

  • Preparation needed for selling more
  • Being an OTA or a marketplace
  • Sending traffic to other sites/ platforms

 

By Ritesh Gupta

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Ai Video: Why NDC and ONE Order need to be considered concurrently?

 

11th June, 2019

A number of critical issues related to change management are being raised as airlines look at being in control of the offer, looking beyond offering a seat or air ancillaries and even serving passengers as per the intent/ context, right from making the offer to being ready to serve passengers throughout their journey.

As for offers, the plan is to reach all the sales channels, direct and indirect, and offer the same services to the passenger through their preferred sales channel. NDC will continue to create e-tickets but once we move to ONE Order there will be no tickets. Moving from the offer, it needs to transition into an order management system for fulfilment and accounting. This is somewhat analogous to the concept of tickets and EMDs in the legacy, but in the Order structure, there are not the restrictions that are present with these electronic documents.

“Retailing procedures can be formed on the basis on the NDC Order even if PNRs and tickets and EMDs are still there,” says Alexander von Bernstorff, Director Airline Solutions at InteRES.

Alexander, who was in London recently for Ai’s Ancillary Merchandising Conference, explained that the NDC Order and a pure NDC-based retailing process result in data quality in a manner that offer relevance and engagement along the passenger journey can be enhanced. With ONE Order, such information is made available and all the amendments to it, in real-time to the accounting and other systems of the airline.

“The NDC Order is the central element of a modern retailing process, including heavily advanced merchandising. It has to be the master record (the single source of truth) – sync'd with accounting and other processes using ONE Order,” mentioned Alexander. As a specialist, InteRES has focused on how to do away with archaic tools and procedures, and managing the transition, with traditional PNR-based procedures facilitated till the point fresh retailing capabilities can be executive progressively.


By Ritesh Gupta

 

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Ai Editorial: NDC Interlining – far from being there?

3rd June, 2019

There are critical financial changes that come along with the adoption of NDC, IATA’s XML-based data transmission standard. 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.

But what about the handling of routing options, based on code share and interline pacts, to manage bookings on partner’s PSS? How is NDC interlining coming along? Without interline, NDC is incomplete, according to senior industry executive, Ian Tunnacliffe, who spoke about the same during the recently held Ai’s Ancillary Merchandising Conference in London.

Another attendee, Ann Cederhall, Senior Strategic Consultant at PROS, in a post on LinkedIn last week, stated: “Surprisingly there isn’t an NDC standard for selling interline between airlines, you would have thought that this was critical to traditional network carriers who sell other airlines and their content. Sadly, interline and codeshare seem to be rocket science in the NDC world.”

 

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Ai Video: Sourcing supply and selling it to be a complete travel retailer

 

6th May, 2019

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.

“Product supply from different sources is important,” says Paul Byrne, Dublin-based OpenJaw Technologies’ Vice President of Business Development and Strategic Partnerships. He says airlines need to strengthen their offering in terms of “in-destination activities, hotel suppliers being connected to their respective platforms etc. to keep the customer on-site and meet all their trip essentials needed as part of their journey”.

In the game of acquisition and eventually conversion, it is critical not to let users drop off a particular digital platform without monetizing the traffic aptly.

Another critical aspect is understanding of different travel products. So as airlines take the onus of meeting all the trip essentials, they end up owning the overall responsibility. Then only airlines can ensure the experience of the passenger ends up being a top-notch one.

Can airlines count on the subscription model?

 

29th April, 2019 

Subscription economy in general has made rapid strides over the years. Learning from the same, the travel sector, including airlines, too, is seeking ways to meet the expectations of travellers, largely set by the likes of Amazon, Netflix etc.

Mexican low-cost carrier Volaris’ decision to embrace the subscription model, v.pass, is one such move.

“We don’t talk of being Amazon of travel, rather our aim is higher,” says Felipe Ocáriz, Head of Revenue Development, Volaris. The vision: Volaris will become the Spotify of aviation. Why? “Because Amazon focuses on transactions. In case of Spotify, the focus is on experience. Volaris should become the only choice for flying and destinations,” said Ocáriz Arce, during the Ancillary Merchandising Conference held in London earlier this month.

Be it for the idea to the development process to managing a subscription product, its technical complexity and above all, ensuring the passenger experience isn’t diluted, the airline asserts it is making progress. It is counting on possible benefits – thriving on data of members, stepping up the ancillary revenue generation, combatting customer acquisition cost and competition.

v.pass - from being a concept to being a core proposition within Volaris’ product stable – has made tremendous progress in under a year, shared Jonathan Newman, Chief Commercial Officer, caravelo, a Barcelona-based travel technology specialist. The team is working with Volaris on this project. “The number of consumers that are using/ subscribing the product are growing 20% on monthly basis,” mentioned Newman

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Ai Video: Assessing the role of GDSs in meeting the NDC 20-20-20 target

24th April, 2019 

There are several ways to market with NDC. Options include a direct connect, via a GDS, a non-GDS aggregator, a meta-search engine and a message hub.

The role of GDSs in pushing the NDC standard forward is being assessed. Considering the fact that 21 airlines have committed that by the end of 2020, 20% of their indirect sales will be made using NDC, this makes the situation interesting.

“GDSs have lot of advantages – their experience, content, capability plus scalability, reliability and speed. GDSs are moving at a certain pace now. There is a sense of urgency (at this juncture),” says Philip Saunders, former Vice President, Air Commerce, EMEA, Travelport. “At the same time, there is space for others in this (distribution) mix.”

For travel agents, booking NDC content is a modification to their customary ways of working. Travelport acknowledges that by making NDC content available, it is providing access to greater choice with NDC content which can be combined with ATPCo content in a familiar workflow. Sabre states that rich NDC content only delivers value to the ecosystem if all the shopping data (NDC, traditional and low-cost carrier APIs) is properly aggregated, indexed, analyzed and delivered. This means the role of the GDS has never been more valuable to the travel ecosystem, highlights Sabre.

Even as the industry accepts that both traditional and NDC content is going to co-exist for years, one positive aspect is that this standard is going to facilitate new entrants into the distribution sector, resulting in increased competition.

 

 

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Ai Video - What’s taking NDC forward and what’s not?

17th April, 2019 

NDC, IATA’s XML-based data transmission standard, has been around for more than six years. The industry acknowledges the need to target a critical mass of volume of transactions. In this context, an initiative, titled the Leaderboard, has been initiated, with carriers featuring in it focusing on sales powered by an NDC API.

“21 airlines have committed that by the end of 2020, 20% of their indirect sales will be made using NDC. If they succeed that will mean that by the end of next year 10 million passenger journeys per month will be booked on these airlines using NDC,” said Ian Tunnacliffe. “If that happens then NDC will definitely have arrived.”

While this is a positive development, there are other commercial aspects that can’t be ignored. For instance, as Tunnacliffe mentioned during Ai’s Ancillary Merchandising Conference in London earlier this month, interline NDC is still the missing puzzle. Interlining is the sale of seats on an airline partner, to offer a wider network to consumers. Interline also covers the ability to cross-sell ancillaries.

Without interline, NDC is incomplete,” mentioned Tunnacliffe. He explained the same in an interview, in which he referred to why the industry can consider the offering of virtual interlining. Overall it is time for a bunch of airlines to move on, and gear up for NDC interline, too.

 

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Ai Editorial: Airline retailing needs NDC, but that's not the only thing

10th April, 2019

By Ai's Ritesh Gupta in London

Airlines are gearing up to answer relatively complex questions as they try to match up passengers’ expectations as retailers.

The plan is to focus on real-time offers, personalization, rich content and ancillary sales. All of this is fine, but as the UK-based senior travel industry executive Ian Tunnacliffe points out, one needs to be pragmatic about the role of NDC, IT systems etc. It is imperative to ascertain the difference between modern retailing and NDC, and be realistic. "NDC is a communication protocol. If you want to gear up for retailing, NDC is just a part of it. Not the full answer," stated Tunnacliffe, during his presentation, titled NDC Update, held as a part of the NDC Workshop in London this week.

All of this holds significance as airlines are looking beyond selling a seat and air ancillaries. The industry is targeting the second wallet by offering other trip essentials - accommodation, rail, mobility, insurance etc.

Importantly, the responsibility doesn’t end here. Airlines have to ensure they can manage the process through day of travel and beyond. And whenever an interaction takes place during the course of the journey – whether at any offline or a digital touchpoint – airlines are diligently looking at ways to recognize the traveller (not only a frequent flyer but could be an infrequent flyer, too), act on the sum of interactions that have had taken in the past, and act accordingly for a superlative customer experience. This in essence sums up the passenger-facing side of the business.

As for what it takes to attain such level of excellence in CX, and also ensuring the product (not only the aircraft but also digital assets including mobile app, website etc.) is ready and is continuously refined in a "test-learn-test” environment, airlines are also looking at means to sharpen their capabilities accordingly. Areas include:

  1. Data-driven decision-making: From how to run the core business (e. g. what sort of schedules and travel offering should be worked out for a particular airport) to precise targeting (automate and segment communications) to personalization (from rule-based segmentation to analytics-driven or algorithmic personalization) to fraud prevention and other areas, a lot is dependent on data. As for indirect distribution and NDC, airlines trying to support distribution via their own APIs, they shouldn’t underestimate what it takes to adopt and execute on a strategy of NDC API distribution. They need to sharpen their data processing capabilities in order to process in real-time the potentially huge volumes of valuable search data from NDC APIs.  
  1. IT and systems: As many as 60-70 distinct systems are involved in operating an airline and specialists stress it is must to set up an integrated system where knowledge and data can easily be shared across the busi­ness. Also, with new standard and initiatives such as NDC and ONE Order, they are looking at their core systems to be based on mod­ern technology and open industry standards. The efficacy of an airline-specific operations or commercial system needs to ensure CX isn’t compromised. In this context, the ONE Order system is expected to deliver. ONE Order would have information about the passenger’s journey. And order would be created based on the passenger information that the airline has. When you go into modifying the order, the process would require a new offer. And that offer is always created considering passenger details and personalization.
  1. People and culture: Embracing a digital culture and agile approach towards running a business demands deep introspection - what is the goal (competitive advantage, engage customers and new data-driven business models), prioritize people, adopt the fail fast attitude etc. Who is going to lead the transformation - chief executive, CIO, CDO, CTO, CMO or anyone else?  Who is going to facilitate change? As Pieter Elbers, President and CEO, KLM  recently mentioned (in an interview with IATA), "...the difficulty is you have to keep the shop open even while you are rebuilding the shop. That is the challenge with implementing new processes." He also mentioned that scalability is another challenge.  
  1. Fraud prevention:  Travellers are reaping the benefit of new digital processes. But simple customer experiences can complicate fraud prevention. As companies allow travellers to create accounts and avail them for their seamless experiences, it is proving to be a fertile avenue for fraudsters. For instance, the threat of account takeover fraud is on the rise. Also, travel e-commerce companies need to dig deep and understand the implications of the mobile channel when it comes to fraud.  A new mobile commerce-related fraud technique that has emerged is the use of app cloners and machine learning techniques to create synthetic device identities.

Being a modern retailer isn't just about NDC. There are several areas that need to be focused upon. Airlines need an ongoing approach that infuses digital literacy throughout employee training and professional development initiatives. Continuous digital learning is critical to embedding digital into an entity. All of this eventually needs to translate into a stage where an airline can thrive in today's digital era, led by a transformation leader who paves way for agility, data-driven decision making within an organization, and eventually a superlative CX for passengers.

 

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Ai Editorial: Airline retailing = contextual shopping + seamless fulfillment

First Published on 2nd April, 2019

Ai Editorial: Airlines are bracing for today’s era in which passengers not only expect frictionless shopping, but also seamless fulfillment. In this context, a lot is expected from ONE Order, writes Ai’s Ritesh Gupta  

 

A lot is being spoken about offer optimization but it is just one aspect of the journey. Without delivering a superlative experience on the day of travel, airline retailing would be incomplete.

Be it for the day-of-travel-experience or even at the time of disruption, there is plenty of scope for improvement.

Though not many full-service carriers have shown swiftness in this context, a handful of them have embraced agile transformation to enrich the passenger experience. And with IATA’s initiative ONE Order program, based around the concept of a single order record, one can only expect the journey of travellers to get better. This, in fact, would be an integral part of overall digital transformation, where agile enterprises are looking at making the most of every interaction with their passengers. The ONE Order initiative is an extension of the NDC program that simplifies the way that airlines operate and interact individually with their passengers before, during and after the trip.

It isn’t uncommon to come across a disjointed experience even with the best in the business. A top airline would probably fail to identify, let’s say a non-loyalty program traveller, at the boarding gate even though the same passenger would have requested for something via Twitter or Facebook on the day of travel. For instance, a flight getting delayed, and the traveller informing the airline about the connecting flight owing to a less than one-hour halt via social media, there is no help on most of the occasions, and the staff at the airport is oblivious to any request. So how to overcome such challenges?

Passenger-centric

The industry acknowledges the need to destroy data silos and historically grown complicated message exchange systems and protocols.

In this context, a lot is expected from ONE Order. It brings the industry to the “single source of truth” model of passenger services.

 

“Within the ONE Order world, there is one data point that contains all of the information regarding a passenger’s journey, and it resides with, and only with, the selling airline,” shared an executive, working with a travel technology company. ONE Order combines the PNR data information with the E-ticket and the EMD information into one single record. In the ONE Order environment, all information is contained in a single order.

By gaining real-time access to the airline’s data, including schedules, pricing, availability, rules, allowances, and so on, the airline regains full control over its data, the executive said. “It is no longer beholden to conform to restrictions in fare rule filling, baggage allowances, price determination, or anything that is in place simply because today’s distribution requires it. Ancillaries are freed from constraints in EMD issuance without impacting the distribution capabilities.”    

“While it may seem a bit counterintuitive, the centralization of the airline’s data is the only way that the airline can be free to address its passenger’s needs and wants, and be able to offer anything it wants to sell, present it how it wants to sell it, and at the right, personalized price to increase the overall sales conversion.  That centralization is not possible in today’s distribution landscape.”

Servicing – as desired by passengers

Clearly airline operations system integration is critical. 

If airlines intend to ensure their passengers are identified when it is needed, it is imperative for airline-specific systems and processes to completely provide an answer to siloed data scenario. For example, if data is being ingested from only a fraction of sources, it wouldn't serve the passenger in all scenarios. That's where the planned offer and order management systems, and the concept of ONE Order will count.

ONE Order would have information about the passenger’s journey. And order would be created based on the passenger information that the airline has. When you go into modifying the order, the process would require a new offer. And that offer is always created considering passenger details and personalization.

As for how this also simplifies servicing the passenger, imagine meeting a request for changing a seat after a boarding pass has been issued. Today DCS or the departure control system is a separate system. Advanced seat reservation happens in reservation, not in DCS. Information goes from reservation to DCS. Today's environment is complex, as it is not a real-time transaction. But with ONE Order and integrated, connected set up, a system like DCS would be having order information in real-time and updating it. Everything resides in real-time in that order. In the NDC world, it is one source of data - it doesn't need to be siloed or to be transferred from system to another. So there is one copy of data in today's scenario and if it isn't shared with another, then it remains siloed. With ONE Order, there won't be any single copy or lag time.

 

Hear from senior industry executives about NDC and ONE Order at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

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Ai Editorial: Doing away with paper-based business processes via ONE Order

First Published on 29th March, 2019

Ai Editorial: With ONE Order there will be no tickets. The concept of a single customer order record holds a lot of promise. The key to ONE Order system’s readiness lies in creating it for a truly ticketless environment, writes Ai’s Ritesh Gupta

 

Airlines are attempting to overcome issues associated with archaic processes and protocols. They tend to hamper the overall passenger experience. 

With ONE Order, the objective is to eradicate the existence of various booking, ticketing, delivery and accounting methods. According to IATA, the plan is to do away with paper-oriented methods deployed for delivery tracking and accounting purposes. Eventually there is going to be phasing out of the current booking (PNRs) and ticketing records (ETKTs and EMDs), and blending the same into a single retail and customer-focused Order.

The customer Order in the ORA’s (Offer Responsible Airline) OMS (Order Management System) remains the single source of truth throughout its lifetime. The ORA holds the customer’s payment until services are operated.

Progress

There are companies that have been working on pilots featuring their respective ONE Order systems and have also achieved IATA certification.

One of them is Dublin-based JR Technologies. The ONE Order solution is a collaboration of its New Distribution Capabilities (NDC) Retailing Platform utilizing Chicago, USA-based MIS Choice’s Airline Choice Departure Control System and Frankfurt, Germany-based Lufthansa Systems’ Sirax Revenue Accounting system to complete the passenger handling business cycle. The company recently achieved the highest IATA ONE Order certification.

Ryan Harris, Director at JR Technologies explained that his team had “very few conceptual problems with the ONE Order process”.

This is because the company’s offerings were developed with the NDC core philosophy of offer/ order management from the beginning. 

“Since we didn’t have the legacy systems that needed to be adapted to the ONE Order processes, we were able to focus on the data flow through the customer journey,” said Harris.

Referring to the role of partners, he mentioned that they “were in similar positions” since their core systems were already adapted to the ticketless environment, which for DCS and Revenue Accounting systems will likely be a major hurdle to overcome if that is not already the case. 

What does achieving highest IATA ONE Order Certification mean? “Achieving the highest level requires that the company be able to handle the entire passenger experience from sale, through to flight, and finally into the airline accounting systems, including any additional products or services that the passenger may purchase,” mentioned Harris.

“We should remember that ONE Order is essentially a ticketless environment that has been elevated to an always available, passenger-centric world.  Since our partners had also already overcome the challenge of working in the ticketless environment, we simply had to ensure that the real-time communication from all parties was available through the NDC and ONE Order standard messages,” shared Harris. He added, “The biggest challenges that we faced throughout the entire pilot process was more due to when we were doing the pilot.  The project that was presented at IATA GAPS in October 2018 was largely done in the summer of 2018, before IATA NDC 18.2, which contained the first “final” ONE Order messages, was released.  As a result, we were constantly giving feedback to the IATA standards teams on what we were seeing and some of the issues so that they could be resolved before 18.2 was final.”

Explaining how the company has focused on concepts such as delivery status and internal values in order to replace current paper based mechanisms used for delivery tracking and accounting purposes, he said, “The delivery and accounting concepts, from a business standpoint, are not actually new.  They’ve been around for years, we just know of it as “ticketless”.  What ONE Order is able to do is to take the concept of a ticketless carrier, expand it by eliminating the structural constraints of the PNR, and make it a standard for the industry.  For carriers that have never worked in a ticketless environment, this is a major change that requires substantial modifications to business and accounting processes, not to mention the technical development to support it.” 

“One of the biggest roadblocks with ticketless carriers has always been how to work with a ticket-based carrier in interline or codeshare relationships.  The traditional approach was to make the ticketless carrier issue tickets, which solved the problem, but brought significant restrictions to the ticketless carrier by now having to issue tickets and EMDs.  What ONE Order looks to do is take that other approach, remove the tickets from everyone, and at the same time, free the airlines from the constraints inherent in the legacy, paper-based business processes,” said Harris.

Enhanced capabilities

One of the biggest advantages that the industry gains through NDC and ONE Order adaptation is that the communication of all information transitions into a standard XML interface, as opposed to the cryptic EDIFACT or proprietary APIs used today. 

“With that transition, it opens the door to any system or provider that can generate or consume an XML message, which is basically any modern system developed in the past 10 years,” said Harris.

“That opening of the door to the airline systems, which rather has been closed to the general public, will allow new opportunities for open communication to and between airlines. New opportunity breeds innovation, which the travel industry in general, and the airline industry specifically, needs to have to offer a better product more efficiently.  I have had the chance to attend several of the IATA NDC Hackathon events over the years, and to see what people outside of the industry can come up with as industry solutions is exciting, and is only possible through the open-source nature of the NDC and ONE Order world.”

 

Hear from senior industry executives about NDC and ONE Order at this year’s Ancillary Merchandising Conference, scheduled to take place in London, UK (9-11 April, 2019).

For more info about Ancillary Merchandising Conference, click here

 

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