Airlines urged to adapt and ‘sell more stuff’

Distribution is critical to full-service and budget airline operations. In the technologically disruptive world of today selling air tickets or other services is more complicated than ever for airlines.

by TOM BALLANTYNE IN HONG KONG  

June 1st 2017

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Co-founder of Air Black Box (ABB), Timothy O’Neil-Dunn, told delegates at the annual UATP conference, held in Hong Kong in April, that his Manchester-headquartered company works on a simple premise: “sell more stuff”. Read More »

O’Neil-Dunn, whose AAB forged the way for the establishment of the world’s first low-cost carrier alliance, Value Alliance, said: “The demands of day-to-day operations make it easy for airlines to lose focus on the customer and innovations that would strengthen their business. On top of that, incumbent technology players are doing their utmost to prevent change through innovation.”

The ABB leader delivered a keynote address at the Universal Air Travel Plan (UATP) Airline Distribution conference in Hong Kong. Before a gathering of the world’s leading players in the distribution, including senior executives from airlines, travel agents, Global Distribution Systems (GDS) and IT providers, he said the travel industry risks “becoming another notch in the belt of Apple, Google, Facebook and Amazon if it fails to adapt to a changing market place”.

The solution lies in intelligent technology that attaches to infrastructure already in place, with minimal changes and low cost. The technology must provide an ease and speed of implementation that was unheard of just years ago, he told his audience.

The two-day UATP conference covered the entire gamut of distribution, from the world of the travel agents, technology, payments, merchandising and ancillary revenue to meeting the challenges of the changing models at both budget and full service airlines.

UATP is recognized as the world’s leading global payment solution, owned and operated by the world’s airlines and accepted by thousands of merchants for air, rail and travel agency payments. It connects airlines to Alternative Forms of Payment that can expand reach and generate incremental sales globally. It offers easy-to-use data tools, DataStreaSM and DataMineSM,

It also provides comprehensive account details to Issuers and corporate subscribers for accurate travel management. Accepted worldwide as a form of payment for corporate business travel by airlines and travel agencies, its Asia-Pacific customers are Air New Zealand, Air Niugini, China Eastern Airlines, Japan Airlines, Malaysia Airlines, Qantas Airways and Shandong Airlines. Etihad Airways also is a client.

In recent years, it was common to hear predictions of the demise of Global Distribution Systems providers as airlines expanded offerings on their own websites. But it has not happened.

Airlines, whether full service or low-cost, want to utilize every form of distribution available to sell tickets and ancillary products. Vice president sales United Airlines, Jake Sefolia, said people today buy tickets differently, receive information differently and interact with their itineraries differently.

“Maybe this whole area was not as ripe for disruption as we all thought back in 2006 when the U.S. carriers started the whole opt-in thing,” he said.

But GDSs have shown agility by adapting to the needs of all categories of carriers who merchandise and sell content in new ways. GDSs such as Amadeus, Sabre Travel Network, Travelfusion and Travelport have adjusted their products to a different marketplace.

Not everyone agrees with Sefolia. O’Neil-Dunn believed the travel industry, and airlines in particular, are victims of the very technology that fueled their early successes. “It is now clear that traditional GDSs simply do not have the flexibility to adapt to the modern marketplace, regardless of the time and effort invested in trying to do so,” he said.

ABB has developed connectivity solutions that sit separately and apart from the technology “spaghetti.” It provides airlines with the tools to adapt without losing the investment they have made in their existing infrastructure, be it traditional, new or unique.

“It frees airlines to form alliances with ease and speed. These airlines combine their routes and products and sell them as they wish, under the brand of their choice, and in a unified and integrated online shopping environment in any currency and in 13 languages.”

Similarly, payments continue to evolve from traditional systems such as credit cards to direct payments from banks and the new generation of options. UATP president and chief executive, Ralph Kaiser, told delegates the company is seeing new developments every six months.

“It’s not just the types of payment. There is everything from credit cards to alternative payments such as bitcoin and global payment systems like Apple Pay,” he said.

Most conference delegates said the long-term winners in the new payment provider space are yet to be identified, but they all agreed on one vital tenet of the business: the winners will have given the airlines what they need at the best price.