ChinaTravelNews, Ritesh Gupta - Gearing up for retailing is forcing airlines to embrace change on several fronts. One of the areas that has been under the scrutiny is the significance of airline-specific IT systems.
Numerous areas are being considered - What can result in personalisation across touchpoints? What can trigger the much-anticipated revenue growth opportunity by retailing flights, air ancillaries and high margin ground ancillaries (such as hotel, car, insurance, transfers and destination activities)? Why not to move away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel?
One of the threats that traditional IT players have been facing is – the emergence of newer platforms being “wrapped around” or bolted onto legacy airline systems. So merchandising, pricing, scheduling and availability are being handled separately or out of the PSS, and essentially this is being done in the pursuit of new capabilities such as personalization, data-driven retailing and dynamic offers .
PSS + e-commerce
In this context, the recent launch of TravelSky Technology’s QUICK Passenger Retailing System (PRS), a hybrid system that encompasses features from a traditional Passenger Service Solution (PSS) and blends them with e-commerce tools, is a tactic to capitalize on the emerging opportunity of retailing. So this means core functionalities of PSS plus ecommerce capabilities would be facilitated via one platform, where before an offer is made, the system would consider preferences, behaviour and purchase history, featuring a rules engine to evaluate the most appropriate products to offer, their sort / bias order etc.
TravelSky has worked on this new offering with a dedicated team. It is being asserted that the new system is designed for carriers with “high growth potential” (say handling around up to 6 million passengers annually currently) and at the same time the plan is to target ancillary service sales in a methodical manner.
Lars Gaebler, Director - Marketing and Sales QUICK PRS, TravelSky Technology acknowledged the significance of counting on analytics for customer centricity as well as the ability of an airline to independently manage their own product propositions (inventory, availability, price etc.) to be in control of their offers. “Airlines have been attempting to be relevant to passengers in terms of what they have to offer to them, and considering the limitations of PSS (in this regard), airlines were presented with options (by 3rd party technology specialists). With QUICK PRS, an airline would be able to identify the customer and then send personalised offers, too.”
So be it for a GDS or an OTA, the plan here is to let the airline create and manage product bundles at the airline level and deliver this content directly via their API.
“So the intermediary would provide ‘data’ to the airline in order to gain for an offer . The airline would ‘data mine’ according to what is being shared with them. For example, in case of an anonymous traveller depending upon the destination, social context, the number of days in advance etc., an offer would be made. But, as in some cases, if an email address, mobile number, FFP details, the name etc. are shared then one can assess the shopping history and preferences. The key going forward is to act on data in a way that the number of choices are restricted to a few that are closest to what a travel shopper would eventually buy from,” explained Gaebler, who added that intermediaries aren’t really pleased with sharing of data, but that has to be done anyway post a booking is done. “So it’s just a question of when, say an OTA, is going to tell who the traveller is.”
Lars Gaebler, Director - Marketing and Sales QUICK PRS, TravelSky Technology
Apt proposition for medium- and small-sized airlines
Gaebler underlined that it is imperative for certain airlines to count on non-air ancillary revenue generation in an aggressive manner.
“I believe that medium- and small-sized airlines have to expedite the adaption of ecommerce practices and selling of non-air ancillary revenues, otherwise we will see a lot more airline funerals in the future globally,” he said. “Especially mid-sized airlines need to be careful, to not have too many systems by different vendors deployed at the same time, to be honest I don’t think they can manage the complexity and the results measured against efforts might not be satisfying. Small and mid-sized airlines should consider which IT vendor can deliver them with the highest revenue in a simple set up rather than looking only at the lowest cost available.”
As for TravelSky being ahead of the game, he said, “We think that most of our competitors are trying to sell systems, which are labelled modern and agnostic etc., however what they are really selling is over 10 years old product which they have most of the times problems to control by themselves and which has become more legacy over the years than they first thought it would.” He added, “With QUICK, the online travel community is getting another wake up call, to actually speed up developments, allowing them not only to compare lowest fares, but also take other attributes into account, required and requested by the customer for the journey. This will also establish a level playing field again between service-orientated carriers and no-frills airlines.” He added that the team is mainly looking at deploying the whole system, replacing the existing PSS within an airline.
As for the difference in the strategy of TravelSky PSS (the biggest strength of this one comes to the fore when it comes to serving big airlines) and the new hybrid one is the target group. “So certain aspects of traditional PSS’ aren’t required in case of smaller carriers. The QUICK PRS would only meet exact requirements. Retailing capabilities are advanced, and ready for new standards/ business processes (as planned by the IATA). Also, we can serve the international community based out of China as well,” said Gaebler. This new team is specifically working on requirements of LCCs and hybrid carriers, unlike the parent company that is mainly focused on full-service carriers.
Two factors behind the launch of QUICK PRS
Gaebler explained there were 2 main drivers behind the new system.
In sync with IATA’s plan: This system has been created from the beginning, and at a time when NDC and OneOrder are gaining prominence, said Gaebler. The QUICK PRS is ready to move away from traditional passenger name records, electronic tickets etc. and similarly, it features XML API based on NDC. “Our system considers orders rather than e-tickets. Normally PSS is centred around e-tickets and coupons, we decided that this is old-school and in the future won’t be useful. So anything can be sold be it for a seat, hotel accommodation, car rental or even a pair of shoes. For this, a new structure was required (to support retailing). All of this factored in what IATA is currently trying to attain at this juncture and how they are preparing for the future.” He added that the company, “rather than working on NDC adaptor, has worked on an adaptor to work according to traditional distribution models”. “So if an airline intends to work on interline , then we probably need to support e-tickets. This adaptor on top of our system can be switched on and switched off flexibly and we hope to see Interlines being handled by NDC soon.”
Expansion of TravelSky outside China: Also, considering the policies of the government in China such as the Road and Belt initiative, TravelSky has been focusing on expanding their offerings and operations outside China. “The traditional system of TravelSky has been designed for relatively big-sized airlines such as Air China, China Eastern and China Southern. There was a need to close the gap by working on a competitive system to take on other players (Radixx, Navitaire etc.),” mentioned Gaebler.
Gaebler also explained how airlines are being positioned to deliver on certain KPIs:
Revenue generation: How to focus on retailing, let’s say selling even a pair of shoes? Today the retailing platforms, especially ones worked out for the travel sector, feature content for all trip essentials. So how does integration work, is it only NDC schemas oriented? Not really. TravelSky is ready on numerous fronts. So let’ say if a user intends to buy a specific product, as Gaebler says, then the system “caches” and then there is verification in real-time for the availability of a product if its chosen by the traveller. “We hope to feature the NDC capabilities (for the same) as well. And if the vendor doesn’t support the NDC capability, then we can work on any sort of XML or JSON integration.” In case, the 3rd party isn’t as advanced for real-time confirmation, then there is mechanism for confirmation of particular product or ancillary at a later stage or even refunding in case of any issue with the availability.
Supporting omni-channel shopping and yet managing costs: Today a shopper can make a request via any channel, and this also means that airlines have concerns pertaining to the look-to-book ratio. Gaebler said such concerns are being taken care of, for instance, availing the cloud services for hosting. “So the actual data consumption or the hosting expenditure as such aren’t as much. Second, there are lots of cache files in order to allow airlines to be proactive to their vendors. Third we offer operational data store (the role is to act as an interim logical area for a data warehouse, data can be verified for conformity with the corresponding business rules etc.) So this data store or ODS is replication of the live, active database of the airline using the QUICK system. With QUICK airlines will be able to choose what content they would like to actively push into the market in order to support promotions satisfying the market comparison need and we are confident that passengers will learn over time that loyalty to an airline will unlock extra saving potentials or the addition of services, once they realize that, they might be willing to switch to direct sales channel of the airline. This must be the aim of the airline, as the direct distribution channels offer the lowest distribution cost. ” said Gaebler.
Being data-centric: Increasingly airlines are looking at offerings that are based on open-source frameworks. Data from various sources is turned into actionable info about passengers and this is being operationalised across all the touchpoints. This can then be operationalised, be it for customer service or even predicting what a traveller is likely to buy, as we highlighted in our interviews with Amadeus and Datalex. “We position ourselves as a proficient data collector, and as an open source to other systems,” shared Gaebler. “Of course, integration with the TravelSky product suite would be simpler, but we are ready to work with any 3rd party system provider. Also, a hurdle with TravelSky offerings is being hosted in China, but on the contrary we aren’t hosted in China.”