Assessing how filing of fares is going to evolve in the NDC era
Ai Executive Interview: ATPCO’s managing director - Product Strategy and Development, Thomas Gregorson
Airlines are trying to control what they sell and the way they sell. Ai’s Ritesh Gupta explores how ATPCO is set to play its part in the future
The way airlines intend to distribute their product, right from filing of fares to sharing their offerings with intermediaries, has been under scrutiny for a while now. Personalisation and doing away with commoditised way of disseminating information are areas that carriers are keenly looking at.
In this context, a section of the industry has questioned the efficacy of ATPCO filing system.
For instance, an executive told me the concept of even a personalized price, let alone a set of products and services of which many are dynamically controlled inventory, was never conceived when the ATPCO filing system was set in place. The same executive also questioned the attempt to distribute dynamic airline ancillary products and services.
Meeting dynamic pricing needs of the future
ATPCO’s managing director - Product Strategy and Development, Thomas Gregorson acknowledges that when ATPCO initiated its journey 50 years ago, personalisation was not really a need.
“However, since this time as we continue to automate the fare distribution process in the industry ATPCO has enabled much of the personalisation that already exists and will continue to work with the industry to meet all of their needs in this regard,” says Gregorson.
To provide some context, ATPCO has for decades enabled the ability for airlines to distribute different content to different entities as well as to offer many different prices and products through the interaction of ATPCO data and prices with the inventory management controls. The organization also allows airlines to offers different prices, services and branded products to the passenger segments (Passenger Type Codes, Accounting Codes, Promotion (Ticket designator) Codes, and Frequent Flyer Tier Status).
“We have recently introduced the ability to further segment the services that are offered to the level of an individual based on the airline proprietary Customer Index Score. Even with all of these capabilities we recognize that this may not be enough for the future,” admits Gregorson.
A multidisciplinary industry working group has been set up that will look at the next level of dynamic pricing capabilities. This working group will include inventory management and pricing and distribution experts. The goal of this working group is to have the full industry implement globally all the capabilities that are already defined within the product as well to define what enhancements need to be created to support the dynamic pricing needs of the future.
Gearing up for NDC
Gregorson says, “ATPCO continues to acquire new airlines that use our fare and rule collection and distribution services, the amount of data that goes through this service continues to grow and we have presented our and have received support from the airline industry that supports ATPCO being their infrastructure and central conduit for all distribution (NDC and traditional)”.
Some major steps towards this vision is ATPCO’s progress on acquiring airline ancillary content with over 130 airlines using ATPCO to distribute their optional services and us being the industry source for baggage fees.
“We have launched an airline profile into production for NDC,” says Gregorson.
ATPCO has completed its R&D and now is making progress with the building of a Message Hub that will serve as a cost efficient method for airlines and aggregators to connect to each other in a NDC world, while maintaining all the benefits of the current data distribution services.
“In 2016 – we will finalize our technology transformation and build out our message hub and dynamic fare creation capabilities,” says Gregorson.
“We recognize that the collection of content needs to expand from the current data push/upload or input via our user interface to also include more interactive APIs to airlines systems. The Message hub will be our first method of collecting content from an airline offer management that we will then normalize so it can be easily consumed by all airlines and systems.”
Control and filing of fares
ATPCO currently supports over three million parameters which dictate the control and use of traditional distributed content for the airlines.
Gregorson says this level of control continues to grow and take new form with the creation of airline profile.
“The methods of control will need to merge as airlines seek a simple and consistent method to control all content regardless how distributed. With this we need to move to build an industry infrastructure that is connected to the message hub and has implemented airline profile in its distribution process,” he says.
Gregorson shared that the biggest changes in the fare distribution process with NDC will be the airlines owning or licensing airline controlled offer creation engines.
“So instead of raw data being distributed to multiple systems, the process will change where the raw data will be sent to each airline offer engine and the airline offer engines will generate the offers,” he says.
The biggest challenges with this transformation is the need to cost effectively support the Internet and consumer needs to shop for airline offers and services, and the need for airlines to obtain content creation engines to be integrated in their offer engines.
ATPCO is focused on enabling a method for airlines to distribute raw data and created content to provide the most efficient method to support the industry shopping process, to continue to expand its distribution infrastructure of airline to GDS to be also used for all airline to airline distribution to support their offer engines.
“Finally, we are building content creation engines that can be leveraged by all airlines,” he says.
Gregorson says the data distribution process that is there today will exist and be extended to include more volume and more frequency.
“We have seen over the last 5 years our data base grow by 80% and we expect to see another doubling of the data base within the next year as airlines begin to adopt branded fares. We also see that there is need to have more frequent updates of some of the data,” he says.
“As such in the first half of 2016 we will have completed our technology transformation project which will include upgrading our systems to enable us to perform instant updates to the marketplace. When and how this instant update process will be sued in the market is still being defined, but one item fully supported by the industry is the need to instantly remove or cancel a price in the marketplace.”
ATPCO believes the most cost efficient and effective way to maintain airline prices moving forward is through a blend of distribution of raw data, utilization of ATPCO content creation engines and creation of processes that enable airlines with the ability to define dynamically alter their pre-constructed prices. This method of maintaining prices, as Gregorson says, will leverage the airlines huge investments in their advance revenue management systems and ensure that their pricing is rational and optimally being implemented.
“ATPCO has focused on reinforcing our infrastructure to provide the airline industry with the most flexible, robust, reliable, and cost effective fare distribution that works today as well as for the years to come,” stated Gregorson.
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