Ai Editorial: It’s just not about selling the way “Amazon” does, travel needs its niche

First published on 21st July, 2016

Ai Editorial: Delivering “Amazon-like” travel experience is an apt benchmark. But as much as we can learn from the top-notch retail commerce platforms, we shouldn’t forget shopping for travel and say a retail item could be different, too, writes Ai’s Ritesh Gupta

 

What’s the benchmark for optimizing a traveller's shopping experience? 

Quite often clues are taken from the retail sector, which I believe also tends to exert unnecessary pressure on executives from airlines.

Yes, there could be plenty to learn. So it could be running a personalised platform rather than a website that features customer profiles, depicting brand story in a forceful manner and delivering a distinctive experience, customized offers based on personal preferences etc.

But shopping for travel and say a retail item could be different, too.  When I search for a book on Amazon, and “how to travel from Zurich to a village in Interlaken?” on a travel e-commerce platform, the requirement could be drastically different. While for a book, I might read 2-3 lines of reviews, price, availability etc. (yes, Amazon might be well anticipate what I intend to read), in case of a trip, I would look for different transportation options and then respective classes in each, things to do, weather, etc. As the number of variables increase, the display of content becomes a challenge, too. Definitely not an easy task for any airline, even though airlines might be knowing where I might travel next!

So any technology-related (or even distribution, loyalty, retailing-related etc.) decision isn’t easy as too much is happening around us. Airlines are contemplating several areas:

·          How artificial intelligence (or AI) can pave way for meaningful interactions? Say - personal travel assistant and tips for trips

·          Moving away from disconnected things to Internet of Things (IoT)

·          Earnings points and miles when a loyal traveller isn’t travelling

·          Effective cross-sell and up-sell at the right time and in the right channel

·          Drifting away from websites to platforms as one embraces digital transformation

·          Layering behavioral data on top of transactional information for real-time complete view of a traveller.

·          Crafting luring offers based on contextual marketing, location etc.

·          Optimizing user experience via emerging payment options

·          Making the most of latest merchandising and retailing technology and overcoming limitations of legacy infrastructure

Plan, invest, learn and learn more

Airlines need to be meticulous about the way they go about planning for the future. Earlier this year JetBlue chose to set up JetBlue Technology Ventures, a wholly owned subsidiary. The plan is to invest in, incubate and partner with early stage start-ups. The advisory team includes CIO, and Executive Vice President – Commercial and Planning, along with other executives from the senior management. As much as a proper vision and an enterprise approach to aligning teams and identifying gaps are required, the organization needs to streamline testing of new concepts on an ongoing basis. Big organizations like Expedia, priceline etc. have proved it – iterations, testing etc. needs to go on and on. This week as I learnt about the introduction of a new artificial intelligence chatbot by Gurgaon, India-based travel search specialist ixigo, it emerged that it  took 12 months for the team to come up with their AI chatbot. The offering would continue to evolve, learning from real interactions with users since the team uses artificial intelligence and deep-learning. So the point I was referring to about retail vs. travel – moving from A to B loaded with information that serves the purpose of the trip – travel companies are responding. ixigo is confident, starting with “80% accuracy”, something that has been built upon from over 30 million data points across destinations, points of interest, routes, things to do etc.

Challenge status quo  

May be its time airlines looked beyond existing options for IT and distribution. “Airlines are still to a large extent looking for industry specific vendors and solutions, and – in many cases – still looking for a silver bullet to give them a 10- years leap forward. In my opinion, this is truly strange; when realizing that retailing has out-paced aviation, why don’t airlines look to major retailers for learning and to vendors/ systems in the retailing space, even without any airline special requirements?” questioned a source about the current approach.  The source further added, “I don’t understand why we are looking for one standard – XML – why not allow any standard? Won’t we have the same problem as we have with EDIFACT today (although EDIFACT serves its purpose well in many environments), what will happen in years to come when we claim that XML is holding us back and we have a better messaging format? In that case use converters so if you want to speak XML and I want to speak JSON, why don’t we just translate?” As it turns out, Google currently supports structured itinerary definitions in email confirmations using two standards: an industry format Called Micro Formats, and their own custom format called JSON-LD.

Talking of selling, indeed if we were to see something new and different like e.g. airlines selling ancillaries on other airlines then I think NDC as a standard would become interesting and tangible. Matching content to offer is a major issue even today. Also, beyond a point don’t blame the so-called legacy structure, why should everything be sold in the same way. Sell as “well” as you can in the channels where you can sell and measure those sales. British Airways is introducing a host of servicing options and an additional payment option via NDC. Agents booking BA flights through NDC enabled systems are being equipped to pre-book additional luggage, advise the airline of catering requests for pre-order etc.

Collaborative approach

Airlines are not technology providers. They are service providers. 

So in order to carve a niche, a strong collaboration is needed between strategy, marketing, operations, analytics and IT teams before any major initiative is taken. Your technology should integrate seamlessly across channels and touchpoints, while effectively scaling to meet your evolving needs. This is often easier said than done due to legacy systems and data silos. The digital transformation should not be linked to a certain department anymore.

As for keeping pace with the pace of personalisation and omni-channel retailing, airlines will have to implement a system that can link all the data that is being gathered together to enable intelligent offer management capabilities based on the identification of customers and their preferences. And things are moving. For instance, a carrier in Europe is working on a customer-centric platform. They have chosen a supplier that provides a modern CRM platform framework that enables the integration of all relevant operational systems. Besides the PSS it’s possible to integrate an external identity and access management system as well as social media, real time arrival and departure information and many more. Based on all these sources of data it’s possible to develop applications that can use and combine such data to serve the customers in the best way.

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Ai Editorial: Airlines need to be wary of proprietary APIs

First published on 15th July, 2016

Ai Editorial: Proprietary APIs tend to create “one-off” implementations that make repeatability more complex and therefore more expensive, writes Ai’s Ritesh Gupta

 

Airlines are increasingly opting to control their own merchandising, e-commerce and API technologies.

The focus is on using platforms that enable airline control, faster speed to market, and flexibility – and drifting away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel.

As carriers gear up for personalisation, yield-managed offers, it is clear that they need to sharpen their respective APIs (application programming interfaces). Amidst all the talk around a single, standardized set of XML messages that can feed all channels, how are airlines and GDS companies going about the same? It seems we haven’t yet settled for standardization i. e. relying on XML APIs or set of codes so that structured data can simplify processing and new application development.  

Proprietary APIs – airlines need to be wary of them

NDC-XML is a messaging standard, and not a model or a system. Whether an airline is using XML or any other messaging standard, they will get feedback on their offer when someone purchases it.  But proprietary APIs are not always scalable for widespread adoption.

I recently interacted with the Chinese platform Alitrip's team and it emerged that they have signed direct connect agreements with domestic carriers in China. But these aren’t NDC XML APIs.

“Proprietary APIs tend to create “one-off” implementations that make repeatability more complex and therefore more expensive,” said Jim Davidson, CEO, Farelogix.   

He added, “Proprietary APIs are where we started, and generally it makes scaling more complex and expensive, hence the necessity for standardization. Even standardized APIs are subject to implementation interpretation which we are already seeing with the NDC APIs.”

So how complex it is to change APIs and switch over to NDC XML one?

“It is a process for anyone who has developed to a certain API, as they must reprogram to the new API. Certainly some change, and updating will always be required as new functions and services are added to the API. Standardization allows for developers to get familiar and comfortable with certain APIs, even when they change a bit from time to time. This all adds to greater adoption and utilization which is a good thing,” explained Davidson.

APIs and travel distribution

API’s are all over the place, and companies like Google have thousands. The concept of API utilization in travel distribution is about content delivery and the concept often referred to as the single point of truth. In terms of content delivery, an API generally has the capacity to deliver more interactive content than traditional (i.e., older) types of connectivity. Car, hotel, and even airline APIs have been around for years. “However, they tended to be a bit fragmented in their structure – meaning no two were really alike – so scaling was both challenging and expensive. For the concept of a single point of truth, an API can function as that one place anyone can go to for consistent and reliable (and accurate) content,” said Davidson.

NDC – still a long way to go

So when we compare the way carriers like American Airlines, British Airways, Qatar Airways etc. with say ones in China, it seems there is disparity in adoption of NDC-XML coding. Proactive airlines have shown that it is possible to deliver richer, more personalized offers across multiple channels, and also possible for aggregators to more cost-effectively scale their integration efforts. As Davidson shared with us earlier this year, this is a major accomplishment and bi-lateral win for the industry.  We are seeing that play out in a number of forms – whether it is OTA’s such as Priceline consuming airline direct connects; GDS such as Sabre consuming American Airlines API etc. NDC-XML provides a strong first level of standardization where XML is used, and avoids many inefficiencies that different versions of XML can create. Based on this foundation, the industry will naturally and in practice further standardize how NDC-XML is applied in order to facilitate the widest adoption. This will involve a process of trial and error.

It is pointed out that GDSs have integrated airline content using proprietary airline API interfaces for several years. But GDS specialists are working their way, and even point out that IATA NDC standards are still new and emerging, and the airlines and airline IT providers are still assessing the role that NDC will play in the distribution of fares and content. “While some carriers are further down the path with their assessments and piloting solutions utilizing NDC standards for offer creation and order management, the majority of the almost 400 commercial airlines in the world are not. According to a recent IATA NDC survey, 86 carriers are planning to adopt the NDC standard in some capacity, while 93 are either undecided or not planning to adopt the NDC standard,” shared a source.

For their part, Sabre is closely engaged with IATA and ATPCO on the NDC initiative at both an executive level as well as a working group level.

“(Sabre) will be part of the group of industry constituents driving the evolution in this area,” Kathy Morgan, Director of Transportation Product Solutions, Sabre Travel Network told me in an interview.

In an interview with Ai earlier this year, Gianni Pisanello, Strategic Marketing Director, Airline Distribution, Amadeus did acknowledge the limitation of proprietary APIs and mentioned that NDC-XML will help increase scalability through a level of standardization. The industry will need to further standardize the data elements and the booking flows to benefit from full economies of scale. In order to deliver the economies of scale that everyone seeks and needs, the industry will need to continue to work closely together to find a balance between that flexibility and effective standardization as NDC-XML gets deployed.

Focus on centralized and standardized API

 “When it comes to a distribution approach to an airline’s selling channels, the delivery methodology would be quite clear, i.e., a centralized and standardized API that would be consumed by all channels – web site, kiosk, GDSs, mobile, etc. The technology behind the API is generally related to the functions one wants to deliver through the API. In the airline world its things like flight search, flight price, PNR create, ticketing, etc. It’s nothing really magical, but rather just a highly efficient way to communicate with the outside world,” Davidson said.

Looking at the bigger picture, Farelogix recommends that airlines not only need to work out standardized set of XML messages that can feed all channels, but also need to plan web and mobile front-end that can dynamically add or alter any fare, bundle or ancillary, and facilitate all offer types and corresponding functionality for shopping, booking, fulfilment etc.

 

Ai is set to host Complimentary MasterClass with Farelogix - NDC in Action: Best Practices in Airline Merchandising & Digital Commerce in Kuala Lumpur (on 22nd August).

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Ai Editorial: Sabre’s way of dealing with inconsistency in air travel distribution

First published on 11th July, 2016

Ai Editorial: Sabre is counting on its scale for innovation as the group continues to power apps, sites, reservation systems etc., writes Ai’s Ritesh Gupta

 

The way airlines sell is evolving, and this is ruffling the status quo.

Clearly airlines are re-looking at their IT infrastructure as well as association with intermediaries in order to gain desired control over what they sell. How viable is a direct connect agreement? What sort of investment would NDC require? Cutting down on GDS distribution cost or even doing away with it? These and many more issues are being dealt with.

Be it for consistency in selling across direct and indirect channels, or understanding a traveller’s intent, context, loyalty or even cost control, airlines are seeking change. Carriers are now focusing on a new messaging standard NDC, doing away with inflexible platforms that require a lot of development / programming to facilitate every change, looking at attaining cost-benefit balance while going for personalisation etc.

Sabre – banking on scale for innovation

Since airlines work with technology vendors and distribution specialists, a big question then is: how are B2B travel conglomerates responding to the evolving needs?

For one, Sabre is ready to bring on change with its software, data, mobile and distribution solutions. The group asserts that its scale enables the team to innovate across the entire travel lifecycle. Sabre processes more than 1.1 trillion system messages every year.

We interacted with Kathy Morgan, Director of Transportation Product Solutions, Sabre Travel Network about how the group is playing their part today:

·          Collaborating for emerging distribution technology capabilities: A prime example of this is NDC connectivity to the Sabre GDS, as American Airlines worked on GDS integration to Sabre using the  NDC-style API late last year. We are already seeing that usage of NDC -XML by airlines and GDSs will vary in its shape and form, resulting in a mix of EDIFACT and XML connectivity. “Evolution in technology standards is nothing new, nor is the use of XML technology standards in the air distribution business. But I would say that usage is on the rise,” said Morgan. Sabre has been utilizing a variety of technology standards, including a mix of XML and EDIFACT standards, for a long time. “And we’ve actually developed our platform to have the flexibility to manage the new ways that new technologies are allowing content to be sourced and distributed.” Morgan pointed out that going forward, the biggest challenge will be ensuring interoperability between the various industry standards during this evolution period – to ensure consistency in access to products and services across airlines and channels.

·          Consistency in distribution: Morgan asserts that suppliers can count on improved consistency across channels – whether it’s branded fares and ancillaries or personalised offers and integration of rich, visual and descriptive content. “We can support it utilising a wide array of technology standards provided by entities such as ATPCO, IATA, and OpenTravel”. So for Sabre, the biggest development in indirect distribution that exemplifies how the GDS is enabling airlines to differentiate their offerings is the evolution of Sabre Red workspace travel agency platform, to include enhanced merchandising capabilities for suppliers.

“(The new flexible content sourcing platform) enables airlines to distribute their products in new and different ways, ensuring the indirect channel has access to the full breadth of content an airline wants to distribute and differentiate,” says Morgan. The offering features advanced merchandising capabilities including enhanced product information delivery via images, video etc. “It would enable airlines, hotels and other travel providers to leverage the Sabre travel marketplace for an omni-channel marketing strategy.” Morgan added that the graphically-rich workflow supports ancillary and branded fares sales (and enhanced hotel capabilities).

·          Unique value: Sabre states there are several ways in which the group delivers unique value to airlines. “Through our APIs and Sabre-developed points of sale, we extend the reach of the airline to customers not easily accessible to them in their direct channel – such as managed corporate travellers and buyers outside of their home market,” says Morgan. “(Also, by using insights around the business processes and workflow of users in this channel) we can drive up sales of their premium products to increase revenues.” As distribution specialists, they state that GDS remains the most efficient, neutral and cost-effective distribution channel to reach travel agencies, not just for seats, but also effective retailing.
 

·          Availability of ancillary or bundled products: It is pointed out that ancillary or bundled products are not readily available when shopping through most travel agencies or corporate booking tools – creating an unnecessary discrepancy and lost opportunity for both the airline. Morgan said the bundling and unbundling of products and services drives complexity in the air shopping and booking process. “At Sabre we’ve made ancillary and branded fare content available through all points of sale that we develop, from the Sabre Red Workspace agency booking platform to GetThere, our corporate online booking tool. Currently, 72 percent of bookable air content in Sabre offers an ancillary and/or branded fare, a significantly larger number than other GDSs. This more advanced level of merchandising capability is also built into our APIs, which are used by developers to build or update a customized booking applications for their websites or to use Sabre content within another application,” explained Morgan.

Morgan also mentioned that air ancillaries and branded fares are relatively early in their lifecycle and take time for adoption to grow. However, the industry is witnessing progress in this area. “Using March y-o-y comparisons as an example, growth of ancillary sales in the direct channel was 87.9 percent while growth in the indirect channel was almost twice that at 174.5 percent,” shared Morgan.  

·          Industry standards: Morgan said Sabre is a strong advocate for industry technology standards as the group believes they are the backbone of travel commerce and enable the broad and rapid deployment of products and services in the most efficient and cost effective manner. “We are also a major contributor to industry technology standards through participation and collaboration with industry bodies such as IATA, ATPCO, ARC and OpenTravel,” said Morgan. “Having said this, not all airlines choose to participate in and utilize the same standards. Sabre also needs to support standards for all suppliers of content – including hotel, car, rail and cruise content for example. While a base level of standardization is valuable, there is always going to need to be some level of customization.”

NDC Certification

Morgan says NDC Certification is a formality – it is not required for Sabre to develop and deploy NDC-based solutions. “Sabre was the first GDS to launch American Airlines’ premium and paid seats capabilities (Preferred and Main Cabin Extra Seats) based on the NDC standard, making these ancillaries available to travel agents earlier this year,” emphasized Morgan.

“Additionally, from an airline IT perspective, our Dynamic Retailer solution will be available to all distribution channels via the NDC XML standard. This solution enables airlines to join customer data (such as trip history and tier status) with their fare and ancillary catalog to generate flight, branded fare, and ancillary bundles and discounts that are both relevant and personalized to the individual traveller,” added the executive.

Sabre is in the process of certifying both their GDS and IT solutions using NDC standards.

 

Hear from experts about the latest trends in air travel distribution at the upcoming 3rd Mega Event Asia-Pacific, to be held in Kuala Lumpur, Malaysia (23 Aug - 24 Aug 2016).

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Ai Editorial: Reshaping IT for future, LCCs are just better prepared for it

First published on 29th June, 2016

Ai Editorial: Modern infrastructure is challenging and airlines struggle with systems that can support their retailing needs. LCCs are ready as long as they stick to their innate strengths, writes Ai’s Ritesh Gupta

 

Airlines’ approach towards retailing and their IT infrastructure has been under scrutiny for a while now.

In today’s era where digital transformation is paving for personalisation and enabling passengers to be in better control of their journey, it’s imperative to assess how full service carriers (FSCs) and low cost carriers (LCCs) are positioned to move on.

So how does the overall IT infrastructure at FSCs and LCCs for supporting core operations differs?

It doesn’t differ that much, says Ann Cederhall, an experienced business consultant.

LCCs (not all) are typically hosted on PSS with “less bells and whistles” (e.g. Navitaire, Radixx) just because they typically started out as website only distribution and with limited need for traditional distribution, said Cederhall. FSCs are typically hosted on the large PSS or own host with all the distribution complexity like interlining, code-shares, travel agency distribution etc. As it gets more complex, bigger is the need for a larger IT structure. “But remember that there are very few PSS to choose from as an airline customer and with the Amadeus acquisition of Navitaire it will be interesting to see what happens in this space in future, also interesting to watch are IBS and Travelsky,” said Cederhall.

Here we explore what’s required to make optimized IT and retail-oriented decisions:

·          Being savvy with IT

It is pointed out that FSCs tend to struggle with changing their IT set up for distribution and personalisation.

Modern infrastructure is challenging and airlines struggle with either buying or building systems that can support their retailing needs. The biggest problem is that there really are not that many players to choose from so perhaps look how to leverage other technology? “(May be its time to question) if there is a need for a merchandising engine, wouldn’t just any powerful rules engines sitting in e-commerce suffice? Or maybe a combination of a shopping engine and ecommerce. To find best of breed is challenging and is time consuming. I actually see a need for more advisors in the industry helping airlines to assess in different areas what is best for them and how to move forward,” shared a source. 

As for LCCs, they are driven by change and innovation which makes it a lot easier for them, it is in their DNA, asserted Cederhall.

She added, “But I have seen that it becomes challenging for LCCs when they decide to work with models used by FSCs, e.g. interlining, working with O&D based revenue management, travel agency traditional distribution. For example, if the airline is ticket-less can they stay ticket-less with agents? Yes some airlines are doing that but some use BSP ticketing for the GDS. And if you do this you have two models that you have to maintain in the airline.”

Cederhall points out that if airlines want to avoid being a commodity product they either need to demand that their PSS technology is customer focused or start using tech outside the PSS to do this kind of work.

In order to drive personalisation, it might be the case that airlines move toward a true super PNR environment/ strong relationship database. If it is not possible to drive change in the PSS enable systems on top. Should the super PNR environment drive personalisation and loyalty?

Considering that there is constant influx of new technologies that is changing the way businesses operate, how are LCCs reacting swiftly to the possibility of being customer-centric? Why the turnaround time of LCCs new IT projects is lesser? For instance, Ryanair has just launched myRyanair platform as part of its digital transformation program.

Reflecting on the same, Cederhall says again it is in LCCs’ DNA, cost effectiveness is key. And the LCCs have been the drivers of innovation and new revenue models.

“LCCs, in my experience, are usually much more open to new technology as they typically do not put all their eggs in one basket,” she said. Also when you work in an environment where you are told to constantly question how we can do it better and faster it comes natural to these airlines. But the trick is to stay like that. “Typically when these airlines are moving into what characterizes FSCs they sometimes struggle. They can also get caught in the PMO death spiral with more employees from consultancy companies than your own “formalizing the strategy” etc.  Technology wise I fine Scoot particularly interesting as they are doing some interesting stuff different to traditional distribution. But you also see FSCs being innovative, Air New Zealand is one that I find interesting, also KLM embracing social media.”

·          Being retail-oriented

Ryanair have talked about looking at selling other airlines on the platform and that is truly retail thinking, looking at flights and airlines like a commodity. 

Of course, it’s a strategic decision.

But in general airlines are just taking baby steps when it comes to proper retail, just think of all the co-branding opportunities, of the personalisation opportunities. Retailing opportunities are endless, and we don’t see enough experimenting and testing.  “Some airline websites out there are just so sad, I see endless opportunities with what you can do with the whole customer experience. But it does mean that the airline has to rethink its business in many areas and acquire new knowledge. Perhaps we are at the time when retailing will drive organizational change of the airlines?” pointed out a source.  

Cederhall said that independent of the industry, there are a set of features needed by anybody who wants to be successful in (online) retailing. By recognizing these requirements and putting focus on adding the functionality needed to meet the additional needs, it should be possible to keep existing “core functions” from a PSS and online booking engine (IBE) and to enhance the customer experience without purchasing a complete, new e-commerce suite.

Cederhall cited few examples of core functional needs/ market demand that need to be considered:

     I.        Any online retailing site needs a content management system (CMS).

    II.        Core “shopping cart & check-out” functionality is something that everybody needs, the same for connectors to payment providers etc.

  III.        A more or less generic integration platform (or architecture allowing integration of any service) is a definitive must for any investment in retail/ ecommerce platform as of today. Airlines are generally already selling hotels and car rental – often through 3rd parties such as Expedia or Booking.com.  Integration of any such 3rd party, be it Lonely Planet guidebooks or Über taxis, it must be possible to sell just about anything including T-shirts and model aircraft, either from internal inventory (e.g. T-shirts with colours and sizes kept in own inventory, such as SAP ERP system) or any external inventory.

   IV.        Analytics - customers are getting spoiled nowadays, and Amazon, Google et al have taught customers to expect a personal touch. Hence, the capability to drive personalisation is increasingly important and might well differentiate you from your harshest competitor. Even without analytics it is possible to do some basic level of personalisation.

    V.        Data. One of the core problems for many airlines is that they actually don’t have their data available. Surprisingly, still after a couple of years with a lot of hype around “Big Data”, airlines typically trust their PSS vendor to keep all their structured sales data (aka PNRs), which are also purged a couple of days after last itinerary segment is past date (even though solutions exist to build a data warehouse and also to keep some level of data in loyalty/ reward systems).

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Ai Editorial: Boosting merchandising strategy via “streaming” data (2)

First Published on 12th April, 2017

Ai Editorial: Can dynamic data, being generated on a continual basis, help in selling an air ancillary? Airlines need to delve deeper to handle such data, processing it on the fly, writes Ai’s Ritesh Gupta

 

Acting on data the moment it is generated isn’t really new, but airlines, as an industry, haven’t seemingly made significant headway in this context.

Let’s first summarize the terminology that is being used in handling dynamic data being generated on a continual basis, be it for human-generated comment, photo etc. or machine-generated data in real-time. Real-time stream processing is all about an incidence or a number of events recorded in a collection of fields, then there is steady flow of data, and eventually the capability to evaluate the same.

Stream processing entails ingesting a series of data, and incrementally bringing up-to-date reports and statistics with arriving data record.

Airlines need to be spot on with their ability to handle real-time data integration and streaming analytics. They need to add context to streaming data - the result could be capitalizing on an up-sell opportunity, for instance, when a shopper is on airline.com. or even handling critical functions like fraud prevention, crisis management etc. Are carriers capable of responding to critical events in time, in-context, be it for improving upon the journey through customer service or even monetizing via selling of an ancillary? Not really.

“Events” - that aren’t mundane 

Seamlessness is what makes the journey easy and enjoyable. And when any organization can understand the intent – be it for a click made on a digital platform or conversation a passenger had via any touchpoint – then only airline would be able to respond, and in doing so, delivering aptly during that moment catapults the performance of the brand. But being data-driven doesn’t end here. More than predictable action (for instance, check-in or conversation at the airport counter), what is equally important is responding to an occurrence that can happen as per the discretion of the passenger, something that is tough to fathom.

Big data and analytics that come into play can be further explained in two components:

In an ideal world, all the customer-oriented systems that airlines operate need to be in sync. This would mean capturing all activities related to a passenger’s journey, right from the moment they made the booking till the point they give their feedback about how all of it went. The story that data can tell about a passenger shouldn’t be missed out on – one system might indicate that a family of three passengers booked their journey (so could capture information related to transaction etc.) plus there could be a repository of data about the same passenger that indicates what this passenger wrote about say on a social platform (a word of praise regarding the in-flight meal) etc.

·          If everything is streamlined, here analytics could be about working out predictive analytical models to discover travelling preferences, new patterns of interest etc., based on chronological/ past data, which can feature data collected from event streams as well as other stored information. So looking beyond the purchase funnel, how about coming up with actionable data related to what a passenger enquired about on the day of travel? Can this enquiry be turned into an offer at the time when the same passenger shops for the next flight?

·          A pertinent facet that can make or break the experience is about in-stream analytics i. e. acting on data as events are happening. For instance, last year, during one of my trips to Europe featuring a connecting flight (via SWISS and Lufthansa), there was a mistake on the part of SWISS when it came to allocation of the seat. Both the airlines acknowledged it via Twitter and ensured the matter would be prioritized at the boarding gate. And the staff at the gate had no clue even after exchanging of tweets with both the airlines spanning over two hours! Clearly airlines tend to miss out on data that is important. What’s the point in having resources meant to serve passengers or core product, air ancillary or non-air ancillary inventory – say a seat on an aircraft or in-flight meal – if that can’t be served or even sold when the passenger is willing to pay for it.

Preparing in an earnest manner

At a time when people, places and things are increasingly getting connected, airlines need to dig deep and focus on preparedness for event stream processing:

What would it take to connect, decode and comprehend streaming data? Enterprises won’t be able to live up to the expectations of travellers if they don’t act on streaming data from transactions, social feed, Internet of Things devices etc.  As Amazon explains, data needs to be processed “sequentially and incrementally on a record-by-record basis or over sliding time windows, and used for a wide variety of analytics including correlations, aggregations, filtering, and sampling”. Also, organizations start with collecting system logs and elementary processing, and eventually perform advanced data analysis such as ones featuring machine learning algorithms.

What’s the benchmark for response time? Airlines need to address issues related to managing massive volume of data and yet responding at lightning speed. If a traveller is indicating that he is willing to pay for access to lounge while being at the airport, but isn’t able to find the way out, then can the airline help him out? What if the traveller fails to reach, and ends up changing his decision?

How to act on apt data? It is imperative that airlines ascertain in real time what data is of value, and filter out the irrelevant data. The value of streaming data needs to be optimized in conjunction with traditional batch data, by combining legacy systems with new streaming platforms. Batch processing can be done to work out arbitrary queries over diverse sets of data, and scrutiny of big data sets. Airlines can assess the efficacy of a hybrid model, working out a real-time layer and a batch layer.

 

Are airlines capitalizing on dynamic data? 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

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Ai Video: Time to look at virtual interlining specialists for NDC interlining?

 

18th September, 2019

Managing complex interline itineraries has always been an intriguing aspect of running an airline. Be it for being in control of the interline offer or securing revenue, such aspects need to be managed carefully.

In the context of NDC interlining, the objective is to make interlining a straightforward upfront message exchange between airlines. But it still seems to be a work in progress.

According to Ian Tunnacliffe, who presented at the recently held Mega Event Asia Pacific (#MegaAPAC) in Kuala Lumpur, Malaysia, IATA has been working on a detailed set of requirements and specifications for how NDC interlining would work. And it was a completely airline-centric approach so essentially each airline would work with its partners and use NDC messages to exchange offers for interline services between the airlines.  And then the offer responsible airline will present offers back to the customer.

“There are many challenges with that approach. It’s a very pure NDC approach within the original spirit of NDC. But in practical terms potentially it could generate many thousands of messages from a single query and in the end there are doubts about it being the practical way of doing things. And at the end of the day still after seven years there are no airlines doing NDC interlining or no airlines have actually implemented interlining according to the standard that was being tried,” mentioned Tunnacliffe.

Can the industry consider the work behind virtual interlining products of certain players - dohop, kiwi, Air Black Box – as a starting point for implementing NDC interlining?

This is a vital issue, even as the industry is gearing up to deal with financial changes owing to NDC. As explained by Tunnacliffe, all interline offers are to include a settlement value for each service that is offered, and it is going to be the amount that the participating offer airline expects to receive from the offer responsible airline when the service has been delivered.

For more, watch the video featuring Ian Tunnacliffe.  

 

Ai Editorial: Airlines need to be “organizationally ready” for modern commerce

First Published on 23rd October, 2018

Ai Editorial: Talking of a standard like NDC, a module or an engine etc. or merchandising and distribution is pointless if airlines can’t overcome the issue of silos and have a well-structured team for an initiative like NDC, writes Ai’s Ritesh Gupta

 

Managing infrastructure and domain-specific IT systems for retailing, real-time data intelligence, running a digital asset on purpose-built, multi-cloud set up, payment optimization etc. are among the initiatives that airlines are undertaking to keep pace with their customers in digital economy. But all of this wouldn’t really deliver till internal alignment is sorted.

The case of selling is no different. Talking of any standard, engine etc. or merchandising and distribution is pointless if airlines can’t overcome the issue of silos. It is vital to work on a shared view of data and every piece of information required to finalize judicious decisions on every instance.  

Be it for refining the product or what to offer, or even optimizing revenue generation via dynamic pricing, efforts need to be coordinated among various disciplines.  

Even if an airline strengthens its XML data processing capability and counts on the NDC standard to strengthen its offering in the indirect channel, without coordination between various disciplines the entire initiative can’t be optimized. Even if airlines collect and process the recent search data across all their channels and put in place appropriate skills to analyze such data by market segment, formulate offers, set pricing and then adjust booking engine rules to deliver this at point of search, they wouldn’t justify this exercise if this doesn’t go beyond the e-commerce team. It is imperative for a revenue management specialist to evaluate demand for a particular O&D and travel date. The airline can benefit by sharing data around who is searching or travelling, what their travel intent is, where they are in their planning/booking process and what might be of interest to them. Making the most of shopping requests on both airlines’ direct channel and also via the indirect ones is going to be a key aspect. Taking into consideration enormous volume of unstructured data and blending it with data already accessible can enable carriers’ various departments to benefit from valuable insights.   

Accentuating on the issue, Sabre referred to the functioning of planning and scheduling departments, and recommends that customer segmen­tation data must be fed back to them. Post finalizing of schedules, the next step  is to focus on selling the seat via apt blending of customer segmentation and fares. As for offer management, Sabre emphasized on considering data sources (that help in understanding travellers). For this, it is imperative to gain information from data sets, and there must be integration across systems and departments. Working on same data sources in real-time will be the enabler to setting offer management apart. Sabre asserts that technology exists that breaks down silos across commercial-planning depart­ments.

On a similar note, referring to dynamic pricing, Zachary Wynne, Lead Consultant, ATPCO, says for such initiative to yield best results, efforts need to be coordinated between airline pricing, revenue management, distribution, ecommerce, sales, and revenue accounting.

“It isn’t uncommon to come across issues pertaining to silos – a team often doesn’t necessarily understand what other groups within the airline do,” mentioned Wynne, who was recently in Bangkok for Ai’s annual MegaAPAC event.

Wynne also mentioned that lack of coordination among teams means the implementation timeline for initiatives such as “NDC messaging of baggage allowance to one travel agency takes far longer than it should”.

The industry also acknowledged that airlines, as an industry at large, are not organizationally ready to change for IATA’s XML standard, NDC. As Farelogix recently pointed out, airlines have to work out a well-structured NDC team to scale up. Referring to the likes of Lufthansa, it underlined that carriers that have made progress have “invested in (and grown) teams of 30 – 60 people” especially for this project. This means “restructuring and/or hiring, the design of new processes, training, documentation, and the adaption of internal systems (e.g. monitoring, settlement, and accounting).”

 

Hear from experts about NDC and retailing at the upcoming Mega Event Worldwide (Ancillary, Loyalty & Co-Brand Conferences) to be held in Long Beach, California (31st October – 2nd November, 2018).

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Is any player good enough to offer a door-to-door journey?

First published on 22nd June, 2016

Ai Editorial on ground transportation: Ireland-based Kevin O’Shaughnessy, founder of Indigo.gt explains how the industry can improve the customer experience in this arena

 

Is reaching a destination, and then proceeding to a hotel or moving around in a city a smooth experience yet?

Before we delve deeper, there are many facets from which this aspect of a journey can be looked upon.

One could be sheer utility angle – just boarding a bus or taking a cab to reach my hotel. Of course, car hailing apps are there to avail, but what if going online isn’t possible. Yes, if you happen to be in an airport like New Delhi, just don’t assume you can go online that easily even if it’s free. Moving on one can also enjoy the peculiar ways one can travel – trams, bikes, train, vaporetto, gondolas, carts, cruise etc.

I will give you an example. I have been planning a trip to Switzerland. I chose Zurich, Lucerne, Lauterbrunnen, Montreux and Geneva as my places to visit. Yes, I could check options to reach hotel in each of the places via hotel website or via booking.com (post booking email/ in-app content link). But several of my questions remained unanswered unless I chose to research online. For instance, is there any option to take a cruise from Zurich to Lucerne? Not really, but one can enjoy cruise from Lake Zurich or Lake Lucerne. Directions and mode of transport can be checked via Google Maps, but there are times when I struggled with it. Google Maps came closest to sharing options – for instance, Hotel Astoria in Lucerne to Lauterbrunnen, one could find out the exact routing, time and stops for rail, car etc.

But I wasn’t completely satisfied with the experience. What if Gmail could analyze my emails – my dates of travel, air ticketing and hotel bookings – to send me a link for moving around! I would readily give access to any sort of permission Google might seek, and would rather present with me options.

Game changer

Ireland-based Kevin O’Shaughnessy, founder of Indigo.gt, a search and reservation platform for airport-to-city transfers, says if every journey for business or leisure was considered a door-to-door journey from a planning as well as a booking perspective, rather than just directing users to the flight segment, we could show users a complete itinerary and allow them to book the entire thing in one step.

Kevin says overnight, this would change the dynamics of airline web bookings, online travel agencies and meta-search companies.

“This specifically means that instead of thinking of ground transport as an afterthought, it becomes a peer in a shared itinerary with flight content. The core technology to deliver this is here today: how long before the taxi app proposes to “take me home”, and streamline the flight booking as part of the process?”

Airlines are uniquely positioned in the market to profit from delivering a better user experience that comes from the transport utility, stated Kevin.  

Opportunity for airlines

For the majority of air passengers, transport to/ from the airport — whether in car rental, chauffeur drive, metro or their own car — is a utility class of product: it is a functional part of the journey.

“If this is true, then the only real room for improvement are the external elements, such as the pickup experience. With the advances in ground transport technology and choice of providers, there is no reason airlines cannot take a lead in the passenger experience, turning a utility product into a positive experience. In doing so, airlines can also capitalize on the revenue opportunities, too,” said Kevin.

It needs to be highlighted that in the last 3 years, the data roaming charges in Europe have gone from extortionate to virtually free (part-driven by regulation), and many early adopters the world over have made the switch to tariffs which allow data on their handsets. Frequent travelers typically have the “roaming” switch set to “on” and there’s a good crossover between this behavior and use of taxi apps in a foreign destination. “The next major shift in transport innovation could well be driven by more widespread trends in passenger behavior when it comes to that roaming setting. If everybody could use data anywhere tomorrow, and since local taxi apps are commonplace, the biggest winners in the space — from a travel industry perspective — will be those apps. Airlines have therefore a very short runway indeed to capture — and profit from — this latent behavior common to the majority of their passengers,” explained Kevin.  

Current gaps

As a traveller, Kevin says he attempts to optimize time and cost, but different passengers have different priorities. As for gaps, he points out:

-       Not all the answers are in the online maps: not all the detail is there: not every mode of transport is shown, traffic information is patchy so timing will be off, cost is usually not there.

-       There’s an onus on the passenger to “learn the destination”. I think airlines do go a certain distance to promote new routes and to give basic routing information to the city area.

-       These different elements in the hands of passengers creates a type of “Travel Math” where they need to calculate the landing time, estimate the waiting time for their chosen transport, calculate the transit time. Then, they can finally propose a meeting at a certain time.

-       At the airport, not all services are treated equally. The pick-up for different car services are relegated to car parks, different levels or more convenient exits. The same holds true for coaches: different commercial deals mean that some will be more convenient for passengers than others.

-       Sometimes regulation or industry-wide tech adoption means that booking rail on mobile still means that passengers still need to pick up paper tickets, or that local transit tickets are only available to locals. This is slowly changing.

Here one must add that typically, airports profit well from ground transport companies: levies are applied to operating taxis and car services, rail is charged at a premium, bus stands are expensive and pick-up points for shuttles are all billed liberally. Since the revenue is already captured, at least to a certain extent, there’s less of an incentive to “go digital” and, only with a handful of exceptions, airport “ground transport” pages are limited to names of operating companies and basic destination information only. This is improving, very slowly, but airports are falling short of what they can do to improve the passenger journey.

Making it easy

Kevin says every market has its own habits.

“While taxi/ car services are popular across the US — this is not the case in large US metro areas or in Europe. In some markets, rail trips to/ from the airport are as high as 65%. Where high speed rail links exist, the typical take-up rate is about 35% of all passengers to/ from an airport,” said Kevin.  

The problem, however, isn’t the product, according to him.

“Ultimately, ground transport — whether taxi or train — is a “local transport” product, which has been built for local residents over the last 50-100 years. This is perhaps why we must think of “transport” and “travel” as not being the same thing,” said Kevin. “Local transport, as a product, is not built for air passengers. Communicating options clearly and openly is key,” he says.  

Referring to Europe, Kevin says rail and air behave differently in terms of information systems.

“We see plenty of innovation in train operating companies, but, to date, no credible source which brings all rail content together in a meaningful way for consumers,” he says.

When we “learn” a destination, we capture local knowledge in the right way for us. This is known as “embedded information” and the process of capturing and using this in online systems is difficult. To date, the travel industry hasn’t had a “common language” to apply to the intricate networks of and routes — whether to use them in a useful way for passengers or to monetize them somehow. “There’s no simple way of capturing the basics and communicating them simply. To date, only Google Maps has come close to this, maybe Rome2Rio, but both are missing the ability to transact,” says Kevin. “In some cases, this is hampered by local regulation or alliances. Only with some exceptions in the UK, rail is still mostly paper-ticket based. The trendy mobile apps you use still send you off to a machine to collect a paper ticket: basically reducing the mobile component to “search with a transaction” rather than issuing a fully-electronic ticket. In some cases, large rail operators in Europe intentionally restrict access to inventory, or lay on additional fees, in an effort to maintain consumer exclusivity.”

“Today, a door-to-door journey needs either time and effort on the part of the passenger to line up all the elements or, alternatively, some seriously smart technology, which we still haven’t seen yet,” Kevin.

He asserts that all ground transportation should be as easy to use as a taxi hailing app, and to achieve this, it means that all the inventory, pricing, commercials, payment technology, legal acceptance of terms and conditions by passengers needs to be visible and instantly available (meaning less than a second) for booking.

“This can be brokered through standards, but none has emerged yet. Business and Leisure travel could be transformed completely if the local transport component became an integral part of travel planning,” explained Kevin.

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Overcoming gaping holes in data strategy for ascertaining buying journey

First Published on 17th January, 2018

Ai Editorial: Constant refining of a core data asset, plus embracing latest developments in the ad tech arena is must as airlines attempt to understand the planning and buying journey of travellers, writes Ai’s Ritesh Gupta

 

Be it for managing data from disparate sources or multiple devices and channels or avoiding siloed device-graph data, airlines need to make continuous progress in order to attain a single view of the traveller.

The complexities associated with a travel-related buy are tough to handle, and data can help in understanding a prospective traveller’s interest, intent and conversion behavior across multiple devices.

We assess 4 key areas that demand attention on a regular basis:

1.     Look beyond the digital side of the traveller: The importance of cookies, mobile device IDs, email addresses, registrations in apps or on websites etc. can’t be under-estimated, but is it enough? What about interactions with the staff at the airport or at the gate on the day of travel? The data platform needs to pave way for online and offline inputs. Specialists point out that offline data is more likely to be structured and come through batch file transfers. What’s the mechanism for real-time inputs and how the same can be made available for use? The sort of questions that are being scrutinized pertaining to data strategy and the serving platform are going deeper. For instance, how to unite anonymous profiles with personal identifiers that enables the system to append specific features such as age, location, interests, purchase history etc. to manage such profiles better. So let’s say a passenger is an infrequent traveller, who isn’t part of an airline’s loyalty program. What if he made a request for a particular seat on two journeys, but he wasn’t allotted due to unavailability. Can the same be done by identifying this traveller, at the time of his next booking, by connecting trails of data available?

So how ingestion of data (airlines need to act on online sources, offline sources of data, plus structured as well as unstructured data), connecting with external sources for updating profiles or even connecting anonymous visitors with their past record, analytics and extraction for real-time use (includes profiles to be connected in real-time to transactions and to events), visualization etc. is going to transform customer-centricity is an interesting area to watch out for.

2.     Don’t be device-centric: A user looking at a trip itinerary from two different devices and being counted as “two different users” only results in a gap in delivery of content, deals and overall experiences. It is said that on an average a consumer moves between devices up to 20-25 times an hour and uses three or more different devices to complete a task.

So what sort of content to show? What time and how many times? To answer these queries, travel marketers need to craft a unified device graph, based on account log-ins plus identification of a pattern via algorithms (through variables such as IP address) that link devices to one user. This blend brings accuracy as well as scale. Adobe recommends that the device graph needs to work with the existing marketing stack to avoid siloed device-graph data and be embedded within existing marketing tools. This when works gives better picture about how a user, rather than his or her devices, is interacting with digital assets, plus also provides valuable information about attribution, how to work on efficiency of ads (frequency capping) etc.

3.     Solid enterprise data platform: Airlines need to blend digital and offline consumer identities into an omni-channel identity, and this has to be supported by an astute data platform. This forms the basis for connecting online cookie and profile data with offline customer data into a single identifier. So not only airlines have to be prepared for call centre interactions or at the boarding gate, but they also need to possess a platform that is proficient at cleansing, deduping, refining of omni-channel customer data profiles, and comprehensive inclusiveness of digital and offline data. Retailers are already counting on such offerings for hyper-personalized messaging via linking of mobile ID, email addresses, web cookies etc. to validate customers. Only this can lay a strong foundation for advanced machine learning to facilitate meaningful interactions across the passenger journey. As for analytics and machine learning,  both supervised and unsupervised models are increasingly coming to the fore in order to optimizing messaging and offers/ deals to customers. These platforms pave way for unified, identifiable customer data.

            4.     Keeping pace with advancements in ad tech: Travel marketers can embrace emerging ways to assess how many customers rather than devices visited their digital assets and interacted with their brand. For instance, there is emergence of cross-device audience extension over the last couple of years. The goal is to enlarge any set of audience or segments by going beyond their existing or unique group of identifiers and related them with additional cross-device IDs - cookies and device IDs to the original set. This is imperative considering the ownership and use of multiple devices, and since today’s traveller is always connected, this means it is important to make the most of both deterministic as well as probabilistic matches.

Another area is location extension. According to Drawbridge, this refers to capitalizing on location data with retargeting. This way travel companies can reach travellers based on where they’ve been – not just where they are – and do so on all of their devices.

 

Gain an insight into the latest trends pertaining to data strategy and travellers’ buying journey at the upcoming Ancillary Merchandising Conference in Edinburg, Scotland (9-11 April, 218).

Follow Ai on Twitter: @Ai_Connects_Us

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