The International Air Transport Association (IATA) announced the establishment of the Modern Airline Retailing program to advance customer centricity and value creation in the airline industry. The transformation will be accelerated by a consortium of advanced airline adopters that will work together through IATA. Consortium participants include American Airlines, Air France-KLM, British Airways, Emirates, Finnair, Iberia, Lufthansa Group, Oman Air, Singapore Airlines and Xiamen Airlines.
In today’s environment, the customer experience is affected by decades old standards, processes and technology and the airline industry must adopt modern retailing practices that will create additional value for travelers and reduce the hassles of increasingly complex passenger document checking requirements.
Modern Airline Retailing will solve this dilemma and unleash value creation opportunities by transforming airline distribution to a system of “Offers and Orders” that will parallel what most other retailers use.
“Our aim is to create value for travelers by meeting their needs. We know that passengers want a seamless digital experience; and they expect consistent service irrespective of how they purchased their travel. With the strength of a global consortium of leading airlines behind us, the next few years are set to see an accelerated and comprehensive transformation of the customer experience,” said Muhammad Albakri, IATA’s Senior Vice President, Financial Settlement and Distribution Services.
Transitioning to Modern Airline Retailing
The Modern Airline Retailing program is built on three pillars:
Customer Identification
Industry standards, which build on the One ID standard, allow passengers to streamline their journey with advance information sharing and a contactless process at the airport based on biometric recognition. Furthermore, this program will also allow airlines to offer a seamless experience across different channels and touchpoints and have greater visibility into third party travel sellers with whom they are dealing.
Retailing with Offers
Progress is already well underway with more than one in 10 travel agent sales coming from New Distribution Capability (NDC) interfaces; and some airlines already have over 30% of their indirect bookings coming through NDC. Industry standards will continue to evolve in the areas of personalization, dynamic pricing, bundles including third party content such as intermodal, and digital payment options. Travelers will have more choice and see the full value of what is on offer, regardless of whether they are buying via the airline website or through a travel agent.
Delivery with Orders
With Orders, travelers will no longer need to juggle between different reference numbers and documents (PNRs, e-tickets and Electronic Miscellaneous Documents) particularly when dealing with travel disruptions or itinerary changes. Industry standards to support this transition have already been developed as part of the ONE Order project. The next step is a full suite of industry standards that will allow the airlines to overhaul the dated infrastructure upon which airline technology currently rests.
Industry Supported Journey
Swiss International Air Lines’ Chief Commercial Officer and Member of the Board Tamur Goudarzi Pour, said: “As industry leaders, the Lufthansa Group airlines have driven and joined the IATA Airline Retailing Consortium as founding members. We are firmly committed to the new IATA Modern Airline Retailing program and believe that the consortium will be instrumental in achieving its goals, together as an industry. This mindset change in collaboration and synergy creation is new to our industry and it will pave the way for a much-needed technological leap leaving behind legacy systems. Hence, the Lufthansa Group airlines double down on our vision towards truly modern airline retailing to create real value for our customers”.
American Airlines’ Managing Director of Airline Retailing Neil Geurin said: “Modern airline retailing simplifies the customer experience and brings our elevated products and services to even more customers. Completing the transition to 100% Offers and Orders will not be an easy task. However, we are confident in our ability to achieve this outcome for our customers as our industry has a proven track record of complex challenges and delivering innovative solutions. We are excited to work with all of our partners, whether it is a global distribution company, travel retailer and corporate customer, to leverage the power of innovative technology to enable a better experience for our customers.”
Oman Air’s Senior Vice President – Revenue, Retail & Cargo Umesh Chhiber, said: “We are delighted to be a part of the transformation journey towards modern retailing, the consortium will engage not only airlines but also tech partners who share the same vision. Oman Air strongly believes that 100 % Offers and Orders along with ONE Order would benefit the entire travel industry by modernizing legacy processes”.
Air Canada’s Senior Director of Distribution and Payments and Chair of the IATA Distribution Advisory Council Keith Wallis said, “NDC has created enormous opportunity for airlines to evolve their products and services to be more customer centric. With support from across the value chain airlines can now take the next steps towards becoming true modern retailers, centered on the customer experience.
“Airlines can now create compelling new customer-centric Offers. Using Orders, we can simplify the entire purchase and travel experience. As an industry, this is a rare and unique opportunity to make a step-change evolution in how we do business,” Wallis said.
“Buying air travel online should be as simple as customers would expect. And when a change needs to be made either because travel plans have changed or there is a disruption, that too should ultimately be seamless. Additionally, in a world of Offers and Orders, airlines will no longer have to rely on bespoke systems built around legacy standards and processes that are unique to air travel, encouraging new competitors to enter the market,” Albakri said.
IATA is supporting this transformation by facilitating the development of industry standards and ensuring these standards, implementation guides and other required capabilities are easily accessible to all. IATA also continues to engage with all value chain stakeholders to ensure technical pain points are identified and propose industry approaches where possible.
