Real-time environments help airlines land a better consumer experience

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Airlines are behind the curve when it comes to operating in real time. The industry’s unique standards for selling airline products have been developed over many decades, resulting in multiple layers of complexity that have rendered sales systems — and business processes — cumbersome and inconsistent.

This sets the stage for the entrance of innovative technology solutions that enable a real-time environment, boosting both speed and efficiency and ultimately improving the end-to-end consumer experience.

When it comes to airline sales systems, there are four layers of complexity:

Layer of complexity #1 — Private industry infrastructure

When the airline industry took form, airlines sold directly to the consumer — either via the phone or through brick and mortar locations such as city ticket offices or at the airport itself. Technology infrastructure — that is, passenger service systems (PSSs) for reservations, flights, schedules and fares — was introduced in the 1960s to automate this direct engagement model. The airlines invented a private industry infrastructure to connect their headquarters and main systems to their global locations. This is the first layer of complexity.

Layer of complexity #2 — Global Distribution System

This model did not reach enough consumers, so in the 1970s the airlines invented the Global Distribution System (GDS) to aggregate tickets they had available to sell to consumers through travel agencies. The airlines passed off inventory they had to sell to the GDS, and a complex system of control measures was developed to address fixed inventory being sold on a non-real-time basis by a third party.

The consumer in this model was still the traveler, engaging with the airline through a call center, a brick and mortar location, or a travel agency. Connections between the airlines and the GDS and from the GDS to the travel agencies added a second layer of complexity.

Systems consumption was stable in this era, with around three “looks” to one “book,” and sales consumption roughly 25 percent of overall system resource consumption. No concept of who the consumer is existed in this model.

Layer of complexity #3 — Airline partnerships

In the late 1980s and 1990s, the airlines began to expand their consumer sales reach by introducing airline-to-airline partnerships (codeshare, interline), which added a third layer of complexity. Those airline-to-airline partnerships then grew into alliances of multiple airlines — further increasing complexity. The end consumer in this model was the traveler, and look-to-book and systems consumption roughly remained stable.

The airlines also introduced loyalty programs to address the costs of customer acquisition and improve customer retention. Customer data entered the airline environment, but it was siloed in the loyalty solution and used primarily for retention and reward purposes.

Layer of complexity #4 — Online bookings

Enter the Internet and online bookings in the late 1990s and early 2000s. The airlines increased the complexity in their shops by adding Internet booking engines, and online travel agencies emerged in the GDS community. The end consumer was still the traveler, but largely in the role of a consumer who was shopping for flights, enabled by technology.

This marked the fourth uptick in complexity, and look-to-book moved from 3 to 1 to 100 to 1, driven by the relative ease of shopping and comparison of rates and benefits. Sales consumption on the system moved from 25 percent of resource consumption to 50 percent. Loyalty began to be monetized, but customer data was still siloed and used minimally in airline sales and service.

As the Internet model matured, metasearch engines and mobile consumption by consumers emerged.  We now have the travel consumer accessing the airlines via many different channels. Metasearch and mobile consumer technology have ballooned sales consumption of resources from 50 percent to 90 percent of resource consumption — a massive workload — with no material change in revenues or passengers boarded. Sales content is still handed off in non-real-time to the GDS community for agency sales, and the consumer is still largely not recognized in the sales process.

Three major industry challenges

While airline retailing has improved, the sluggishness and inefficiency brought on by all the complexity is causing airlines to miss opportunities to consistently personalize the buying experience for consumers and explore other revenue possibilities.

Three major challenges have emerged that must be addressed for this industry to deliver a truly modern retailing and consumer experience:

  1. Explosion of workload (cost): Sales workload (this is called “availability,” or the “look” in the “look to book” ratio) is exploding. We have experienced a large increase in cost with a limited correlation to improved revenue return.
  2. Limited/ineffective use of data (risk): Consumer and sales data is not used in real time due to the escalating cost of workloads and the historic models of distribution, so customer context is generally absent from sales and service. When a ticket is sold through a third party, the airline does not know who the customer is until after the ticket is sold. This means there is no opportunity to personalize or apply context in the current model. This thwarts the ability to operate in real time.
  3. Excessive complexity (cost, risk, agility): The complexity required to operate in the passenger airline industry (the four layers of complexity that have built up over time) makes change hard, costly and slow.

To address these challenges, the industry must look for technology solutions to address the explosion of workload with the ability to cost-effectively operate large volumes of data in real-time, while also addressing the ability to consume services on a granular or small-scale basis. Ultimately, these solutions are the catalyst to improving time to market and the consumer experience while reducing the cost and risk of change.


Cindy-Falschlehner-headshotCindy Falschlehner is the general manager responsible for Consumer Travel and Airline Services at DXC Technology. She has over 25 years of experience in the information services industry supporting travel and transportation clients with a focus on client management, sales engagement and financial discipline. Falschlehner has served as vice president of the Open Travel Alliance and is a board member of Max Time, a non-profit organization focused on community support for families of children with Down’s syndrome.

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