What we have witnessed in 2016 was a clearing of some of the fog around the world of airlines and the technology that powers them. The airline industry has just come off of a four-year winning streak of profits powered by controlled expenses and lower fuel prices.
Some airlines have taken the opportunity to re-make themselves. Others have been quite happy to take the profits and store them up for the rainy day when the inevitable happens that the good times end.
2017 will be a challenging year. Fuel costs are on the rise. Labour costs are on the rise, technology platforms have not come down in price. Surprisingly the airline industry still spends less as a category of their revenues in technology that other industries.
So here are my thoughts on 2017.
For technology that now must come to the fore, we are seeing some clear trends emerge. For the near-term, the New Distribution Capability (NDC) is finally gaining traction. Despite all the challenges – its utility is now spreading beyond the use as a distribution tool.
Ancillaries are starting to move mainstream. But challenges remain. The core passenger service system (PSSes) and global distribution systems (GDSes) have not changed and their abilities to provide modern digital selling platforms. This fact still haunts the whole industry with legacy challenges.
Airlines — particularly the full service network carriers — are still stuck in their mode of protecting their complex (and fragile!) technology platforms. Low-cost carriers (LCCs) often have better and more flexible platforms, albeit at mostly a lower scale.
Read original article