Jumping tech and mindset hurdles to get to airline retailing

The recent CAPA Airline Leader Summit event, one of the first face-to-face meetups since early 2020, provided the perfect forum for airline and technology partners to discuss the current distribution landscape and steps needed to meet customers’ growing expectations. What did we learn from the thought-leaders taking the stage and conversations over coffee?

Retailing mindset

It was widely acknowledged that the past two years have been a wake-up call to the aviation industry. One airline executive commented that failings from a customer perspective were “brutally exposed” by the pandemic. Now, two years on, customer behavior has changed how they shop, book flights, and the flexibility they expect, adding to the challenges airlines must meet head-on. As a result, airlines need to move from a cautious operational mindset to one that is more open and focused on retailing.

The CAPA event also highlighted some broader trends, such as the move from selling a seat to taking a step back to think about what other ancillary items the customer might need, for example, flexible changes and cancelations or more comprehensive travel insurance.

Accelya’s global head of sales and account management, Bryan Porter, pointed out this is all about business transformation and reimagining how the industry approaches everything. He noted that airlines need to embrace change at their own pace due to different business models, strategies, and appetite for investment. Airlines will also need to consider solutions that take a hybrid approach to this journey as carriers rarely operate in commercial isolation. It’s not realistic to think that partner airlines from different tiers and geographies will arrive at the same level of maturity at the same time.

Many carriers used the pandemic to accelerate transformation, challenging technology partners to help them adapt to the new world. Bryan flagged some of the work Accelya did around NDC, revenue management, and merchandising, assisting airlines in emerging stronger. By the end of 2021, Accelya saw a 73% increase in the number of tickets sold through NDC channels (processed via the Accelya FLX Platform) compared to pre-pandemic times.

Airline executives acknowledged that collaboration on technology developments could accelerate the transformation to benefit the industry. For example, ONE Order – IATA’s order management initiative – is advancing. Still, as one airline executive puts it, there is the need to “march along together and make decisions together” to avoid a fragmented approach.

Much of the positive outlook was evident in the digital transformation session at CAPA. We heard airlines are more confident in becoming digital retailers by using supporting technology that connects customers with valued products in customers’ channels of choice.

With several airlines now engaged in ONE Order and a broader appetite for cooperation, there’s an opportunity to move the needle on airline retailing. While aviation has always been a cautious industry, many accept that the cautiousness can remain while change happens alongside it.