There’s a saying, “In God we trust, all others must bring data.” It has never been so relevant than today, as insights will enable airlines to weather the whims of a volatile travel market and fast-track their path back to profitability. Take distribution strategy, for example. Essential questions such as what type of New Distribution Capability (NDC) traffic my partners generate, where and when my potential customers are looking to fly, and what’s my look-to-book ratio can give airlines much-needed visibility.
In previous Air Transformation Lab articles, we looked at game-changing transformational steps to move airlines forward on their path to high-performance retailing. Here we explore NDC analytics and how airlines can optimize their NDC channels and drive NDC adoption. Even though NDC is in the mature phase, this ability to optimize and perfect its channels is still in a state of perpetual evolution.
Historical data alone no longer cuts it, so if we need to answer these questions and many more, we must add forward-looking indicators into the mix, including real-time shopping data and KPIs that predict demand. For example, days in advance of purchase, shopping (looks by date and by geographic), where are the shopping requests coming from, and for which routes? These indicators can help airlines understand the current context, evaluate the performance of their retailing technology, and, importantly, take the right action. Accelya’s NDC customers are doing just that.
By adopting this analytics-driven approach, NDC market leaders benefit from market transparency in a collaborative way that highlights the benefits of NDC, drives adoption, and provides each of them with a complete picture of sales through their NDC-enabled channels. Their teams can:
- Compare their current and past performance on traditional and new distribution channels.
- Engage in scenario planning to indicate clearly where they should focus their efforts for a return on investment (ROI) per agency after technology investment.
- Eliminate unnecessary shopping requests that lead to data storage and processing costs in addition to skewing demand predictors.
- Understand which agencies will grow NDC sales as they have already implemented NDC and have high GDS volumes.
“Sometimes travel partners produce random traffic, there are robotic searches also, and there are travel partners that don’t have the most recent airline offer catalog. These searches create an artificial “look-to-book” ratio. With NDC analytics, we can reduce these looks by 25%” – a major 15 million passenger European airline.
There is no argument that harnessing data and applying it in meaningful ways will play a significant role in helping airlines in their NDC adoption, capitalize upon the demand indicators, and not only recover but also uncover vital new revenue streams. Provided we look to data and not a deity for answers.