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
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