December 04, 2016
Getting the right tech architecture and PSS is certainly the foundation stone of any long term technology strategy, but it is no longer enough to remain on top of the game.
Becoming an online retailer opens up unprecedented opportunities for airlines to generate additional revenue and escape the, always present, threat of commoditization
It is not just air fares themselves that are being turned into branded products, each with its own set of rules and features that must be marketed, but the assortment of ancillary services on sale is getting increasingly more diverse and complex.
Becoming an online retailer opens up unprecedented opportunities for airlines to generate additional revenue and escape the, always present, threat of commoditization. But it also comes with some strings attached.
It requires the adoption of new commercial approaches including the airlines’ own internal organization, as commercial, marketing and IT teams will see their areas of responsibility increasingly overlapping.
It will also require flexibility and a degree of openness to manage their own websites as a platform where multiple external partners can get involved at some point during the transaction.
And it also makes it imperative that airlines invest in getting to know better who their customers are and customize their offerings accordingly.
In fact, this is hardly new stuff.
Airlines are just starting to crack what other internet retailers have been doing all along.
In the ultra-competitive world of online retailing it is key to be able to know your customer throughout and be able to craft an offering that matches or, even anticipates his needs and preferences as closely as possible.
In short it is the product that will adapt to the passenger and not the other way around.
A Deeper, better, understanding of who your customers are makes it possible for companies like Amazon to offer very granular, personalized offerings that maximizes conversion rates and ticket size.
Easier said than done - as it often happens in technology, it is not the idea that matters, but its execution.
Not a coincidence that Ryanair, an airline that has publicly stated its desire to become the “Amazon of the skies” is starting to create myRyanair profiles for all its customers, without exception. The creation of a dedicated customer area, linked to the airline’s internet booking engine (IBE), is something that, at Newshore, we have also done repeatedly for our airline clients. This way they can use the stored customer data to personalize the booking process and speed it up by pre-filling some information. The customization of the ancillaries offering is, of course, another key advantage of keeping customer profiles.
The airlines’ can call on some allies to succeed in this undertaking: big data and customer intelligence tools together with flexible merchandising platform.
The capacity to add additional functional layers to the core PSS system in order to keep up with the industry’s pace of innovation in the commercial sphere is key.
What seems certain is that airlines will be much more dependent on multiple external partners, many of them from outside the air travel industry.
An ecosystem of technology suppliers is emerging that addresses this need for an ecommerce and customer intelligence layer. Firms like Datalex, Farelogix, Openjaw or Boxever to cite just a few, are active in this field.
Indirect channels are also getting updated to deal with this richer, more complex environment, with the launch of IATA’s NDC initiative being touted as a major transformative deal that will help to third party distributors, such as travel agents to get back into the merchandising game.
In a recent report on the future of airline distribution commissioned by IATA, Atmosphere Research Group, pointed out how in the period from 2016 to 2021, technologies such as artificial intelligence and voice-driven booking channels are also likely to become mainstream in the airline industry.
They will be open new possibilities, for example, artificial intelligence technologies may help airlines implement the sort of customized passenger-centric approach that has remained somehow elusive. At the same time, will add to the growing technological complexity and making of flexibility and compatibility between multiple systems, an even more important attribute of the successful airline’s technology platform.
In this context, the challenge for the airline IT manager will be to make sure that each of these systems works in coordination with the others. Like an orchestra able to delight the unsuspecting users at every step of their interaction with the airline.
At Newshore we are experts in helping new low cost airlines get off the ground quickly and reliably. We have worked with some of the most successful low cost airline launches of the last few years, setting up their technological platforms: from implementing PSS systems to designing internet booking engines and deploying revenue-generating ancillaries software.
The innovative solutions we have developed for our clients allowing them to enjoy the benefits of the latest technological advances while remaining focused on their core business, without any risk of disruption to their operations.