Category: Airlines

One Order: The proof of the pudding is in the eating

NDC has transformed airline distribution. Well, while that particular statement can be debated for many hours, one thing that can be said is that it has changed the vocabulary of airline distribution. The mindset of airline distribution has genuinely been transformed to think in terms of “offers” and “orders”, about APIs and dynamic bundles and so on. Indeed, many airlines are implementing these concepts in their distribution landscape.

But what has really changed, beyond some terminology? Well, for certain, airlines are thinking much more like retailers. They are thinking about the customer (purchasing) experience, products, bundles, segmentation, and they are thinking about how to get these into their distribution channels as offers – through NDC and their digital direct channels. The transformation of an offer into a sale of products is resulting in the creation of orders. However, most orders still rely on a system which also uses legacy artefacts such as PNRs, tickets and EMDs.

As airlines become more retail-focussed, more confident in their capabilities as retailers and more well-equipped with tools to enable this, the more creative and ambitious airlines will become. More products in bundles, different products in different markets, integrations with providers of travel-related services that see the market developing as the technical obstacles of legacy artefacts are steadily removed from the equation. This gentle transformation is also driving changes elsewhere throughout airline organisations, as the knock-on effects of these begin to be noticed. Orders created within an order management system provide a vehicle for simplified settlement processes between sales channels (retailers) and the airlines as sellers. While the full complexity of airline revenue accounting, proration, BSP and other settlement flows cannot be eliminated overnight, the ONE Order accounting standards are enabling change. As the maturity of NDC distribution increases and orders become more prevalent, airline IT providers are presented with opportunities to bring further simplification, leveraging NDC and ONE Order. Providers of Order Management Systems (OMS) are now able to integrate directly with airline accounting systems in real-time, bypassing much of the legacy complexity associated with PNRs, tickets and EMDs.

However, there is more to being a successful airline retailer than creating offers, converting them into orders and feeding the fruits of these sales into the airline’s financial systems. At some point in time, there will be a customer who has expectations based on their wider retail experiences. The retail possibilities that airlines are now becoming exposed to go far beyond their own domain. While the additional bag will (hopefully) be visible at the time of check-in, and the lounge may be run by the airline, what about the pre-booked parking, fast-track security or the express train to the airport? The airline is unlikely to be the entity responsible for delivering the service in these cases, but the expectations of the customer are the same as when they present at the desk to drop off their bag – it should just work. However, interacting with all these new parties to ensure “it just works” is unchartered territory for many airlines. More and more, this involves pushing an order notification to the external service provider via the OMS to fulfil a service. Interactive two-way messaging related to order fulfilment is new. And, in the envisaged world where the PNR and ticket are superfluous, even the interactions with the check-in providers need to be brought into the era of APIs and open integration standards.

In conjunction with airlines, vendors and other industry stakeholders, IATA has anticipated this and has developed a set of standards within the ONE Order framework to enable the delivery of services using orders. These messages can be used by an OMS to trigger the delivery by pushing information to the responsible party or can be used by delivery providers to pull the necessary information proactively. They can track consumption of services as well, which is key to triggering accounting and settlement processes. However, certification for ONE Order capabilities is still very light compared to NDC. While the certifications only may only be taken as a loose measure of maturity, it would appear that there may be a vast gap between what airlines can now sell and what (or rather how) they can deliver.

The reasons for this apparent mismatch are manifold and varied in their nature (technical, process-related, commercial), and some may be easier to resolve than others. What is more concerning though is the apparent lack of awareness of this mismatch among the broader industry. Great focus has been placed on promoting the need for modernisation in how airlines define and sell their products and services. However, there is still one key component that will become a challenge sooner rather than later – where the customer gets to seamlessly experience all those products and services that the airline invested so much effort in to get the customer to purchase.

The collaboration between airlines and their OMS partners is, generally speaking, mature, collaborative and based on a common understanding of business value and goals. The relationship between airlines and their ground handling partners is of a very different, operational nature and is often very cost-driven to extract the maximum value at the lowest cost. On the other hand, the relationship between OMS providers and ground handlers is non-existent in most cases.

Planning and executing the smooth delivery of products is key to being a successful retailer. Achieving this requires close alignment between all stakeholders: airlines, their OMS providers and crucially, the ground handlers and other partners, in and around the airport, in the air or wherever else they may be. So far, the focus has been on the selling aspect of retailing and increasing revenue and airline wallet share. However, if airlines are really to succeed as retailers, customer satisfaction will be determined by what, and how, they deliver. The proof of the pudding is in the eating.

This post has been published in collaboration with Terrapinn.

(Nick Stott, 7. June 2022)

If you are interested in a deeper discussion about this topic: Listen to our latest TiMCAST 15 on 15 where Jost Daft of LH Group shares his views on the subject.

 

See you at the Aviation Festival Asia

Travel in Motion and Oystin are privileged to have strong relationships with Asian airlines. Therefore, we are happy to meet many of our partners and customers at the Aviation Festival Asia, which will take place 14 and 15 June in Singapore. Daniel Friedli and Boris Padovan will be on site and are looking forward to meeting you.

In addition Daniel will moderate the panel “Airlines as a data-driven transportation ecosystem” on 15 June at 11:10 a.m.

Meet us at the PROS Outperform Virtual Conference from 16th till 18th November

Meet Travel in Motion at an upcoming industry event that is worthwhile attending: The PROS Outperfom Virtual Conference which will take place from 16th till 18th November. We will be present as sponsors and you can meet us by visiting our sponsor page. Our partner Daniel Friedli will also be on a panel to discuss the shifting airline distribution landscape with Boyan Manev of PROS and Keith Wallis of Air Canada (18th November, 11:00-11:40 Central Time, 18:00-18:40 CET).  This will be a perfect possibility to catch up, discuss and look forward to joint engagements.

 

Long Time No See – Meet us at one of these upcoming industry events!

After a long period of limited personal exchange we are looking forward to the upcoming industry events where Travel in Motion will be present, such as IATA’s Digital, Data and Retailing Symposium in Madrid from 26th till 28th October, PROS Outperfom Virtual Conference which will take place from 16th till 18th November and  the World Aviation Festival on 1st and 2nd December in London. Please reach out to us to personally reconvene. See you soon!

 

Travel in Motion’s Fifth Birthday

The summer is coming to an end in our northern hemisphere and the summer holiday period has confirmed that air travel is on the raise, again. Within Europe, Northern America and China there have been plenty of leisure flights, and although we have not reached pre-COVID numbers, the trend remains positive and promising.

A lot is dependent on potential virus mutations and vaccinations, but also on streamlining the numerous different rules, regulations and processes for air travel. Examples like the IATA Travel Pass Initiative have shown that technology, especially ongoing digitalization of processes, can contribute to the restart of global air travel.

Thus, digitalization has become one of the top priorities for our industry community, and we at Travel in Motion are engaged in helping our partners to reach the next level of digitalized distribution, disruption management and airport operations.

We have helped our partners now for over five years – yes, TiM celebrated its 5th birthday, and we have enjoyed every single day within TiM and within our community.

We are looking forward to continuing our work with you for many more years to come, and perhaps we can meet at one of the upcoming industry events where Travel in Motion will be present, such as IATA’s Digital, Data and Retailing Symposium in Madrid from 26th till 28th October, the PROS Outperfom Virtual Conference which will take place from 16th till 18th November or the World Aviation Festival on 1st and 2nd December in London. See you there!

 

Interview with TiM in the latest Air Transport World

The latest edition of Air Transport World (ATW) features an article about new opportunities in Airline Distribution. It reflects on Emirates Gateway, as well as discussing advantages of IATA’s New Distribution Capabillity (NDC) with Lufthansa –  a very good summary about the status, opportunities and challenges of NDC.

We are proud to have contributed to this article through an interview with the author Kurt Hofmann.

Please check the latest edition of Air Transport World.

ACCELERATING NDC

While many airlines had lofty ambitions, most would admit that they have faced challenges in growing their distribution volumes via the New Distribution Capability (NDC) as quickly as they would have liked. An aspect that is increasingly important is the role of NDC aggregators, the bridge between supply (airlines) and demand (sellers). Travel in Motion’s (TiM) founding partner Daniel Friedli took a deeper look into the value added by NDC aggregators and general challenges to NDC adoption. Through a comprehensive survey with aggregators as well as interviews with IATA, airlines, aggregators and sellers, TiM explored what works well, and what does not.  The paper should help airlines, aggregators, sellers and NDC solution vendors address these issues and find solutions at an early stage of the project and implementation.

The time and efforts to research and write such a paper are made possible through sponsorship. In this instance, we thank our sponsor Datalex for the support.

DOWNLOAD THE PAPER NOW!

PSS: Not an easy choice

Undoubtably 2020 was the worst year in aviation since World War II. We have never seen an industrial downturn to this extent and it will take a long time for our industry to recover and reach pre-COVID volumes and results.

However, crises create opportunities, and we at Travel in Motion GmbH (TiM) are proud that we were able to support an airline in mastering the challenges.

Helvetic Airways is a Swiss-based regional carrier founded in 2003. Since the current owner Martin Ebner took over the airline, three years on Helvetic has become a Swiss success story. The airline has grown to 16 Embraer aircraft, with a clear strategy to mainly operate the latest E190-E2 model. This will provide Helvetic with one of Europe’s most eco-friendly and modern fleets. The airline’s business model is based on three pillars:

  • ACMI and wet-lease operations mainly for Swiss International Air Lines, with the ambition to grow in this business segment and become one of the leading ACMI/wet-lease providers in Europe
  • A very successful (ad hoc) charter business with a strong focus on major European sports clubs
  • Own scheduled flights, under Helvetic’s 2L IATA code. Although their scheduled network has not been extensive in the past, with the performance of the new E190-E2 aircraft, Helvetic can now establish a unique and flexible network, differentiating itself from its competitors.

As scheduled operations may become increasingly important for Helvetic Airways, the team soon realised that the simplistic self-built inhouse PSS was not flexible enough to accelerate this part of the business. Helvetic set up a team, led by Chief Technology Officer Christian Suhner and supported by the Head of PSS, Patrick Brunner. Their aim was to find one of the most innovative, user-friendly and easy to operate PSS systems for their type of airline and route network, with the flexibility to integrate with other components and to extract their own data for analytical purposes. To achieve this, they engaged with TiM to run a PSS replacement project covering all the necessary steps, from summarising Helvetic’s business requirements, running a tender, facilitating vendor sessions, supporting the choice of the final supplier and finalising the vendor contracts.

One key business criterion was the need to be able to seamlessly scale scheduled operations up or down, depending on performance of Helvetic’s ACMI and charter business. In addition, as one of the most modern and technology-driven airlines, Helvetic has the highest requirements for quality and – of course – safety, a philosophy which is summarised well in the airline’s motto: “Swiss quality all along the line”. This has been reflected directly in the selection of the new system, especially in the way Helvetic plans to sell their products: no dependency on legacy aggregation and distribution but being able to distribute directly, connect to new-generation aggregators, being accessible for tour operators, while remaining in control of the offer and order process. In other words, distribution based fully on their direct channels complemented by NDC and direct API connectivity to other distributors and retailers. Rarely does a regional airline have such a clear vision on where they are heading.

  “After the successful evaluation phase with the great support of TiM, we’re currently in the phase of implementing our new PSS platform,” confirms Christian Suhner, Chief Technical Officer of Helvetic Airways. “One that will help us further enhance our product offer, and will also enable us to respond more effectively to market developments. With all this going on in IT terms, plus the continuing renewal of our aircraft fleet, the Helvetic Airways transformations are truly well under way”, he adds.  

Of course, this has not been the first time TiM has successfully delivered such a project, but it was still a very special exercise. Due to the pandemic, only remote interaction was possible with the vendor community. The Helvetic and TiM teams could still physically meet, albeit with social distancing in place, occupying large meeting rooms while sitting in opposite corners. Using TiM’s toolset for understanding and defining the airline’s specific requirements, the tender documents were created. Then, using TiM’s standard model, the tender process was executed. Jointly with the customer, the  the responses were analysed and evaluated based on predefined criteria and weights – fundamental for a successful and fair selection. However, despite the pandemic, such an evaluation still requires close interaction with the various vendors – a pure paper-based evaluation was not sufficient to replace meetings with vendors. As the Helvetic team had not run a PSS procurement process before, evaluating soft in the factors decision-making process was a challenge, especially as many of the vendors ranked relatively equal in the formal evaluation. Thus, the final personal touch, the trust built up through interactions in joint workshops or getting to know one another in face-to-face contract negotiations were missing.

To compensate for this as best as possible, the Helvetic and TiM evaluation teams became MS Teams power users. All vendor sessions were conducted remotely with hours of product demonstrations, reviews, discussions, and negotiations carried out in front of screens and speakers. As the TiM team already knew the various vendors, it was possible to bridge the gap of real face-to-face interaction, however the job still feels somewhat incomplete from a personal interaction perspective.

Helvetic Airways has now completed the process and chosen a new provider for their PSS which supports the uniqueness of the airline. While the project has ended as a success, we think it is safe to say that while remote interaction is possible, it does not replace the need to meet in person, especially if deciding on which system the commercial future of an airline will be based upon. This is just one more reason why the whole team at TiM is looking forward to the re-opening of our industry, allowing us to travel and meet in person again.

Revenue Management Forecasting

March 11, 2021

As we are getting towards the end of the first quarter of 2021, we can see that air traffic is picking up and that several projects are being revamped. But fundamental to a sustainable restart is the recovery of passenger revenues, and particularly a proper forecast of the revenues to come. To give some insight, our Managing Partner Andrea Riesen has summarised her thoughts on Revenue Management (RM) Forecasting in a TiM QuickView paper. It provides an excellent overview of forecasting best practices and guides the reader from the theoretical background of RM to a best practice approach, where Andrea shares her experiences from working within various airline revenue management departments. Feel free to download your personal copy of the whitepaper here.

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