Leading airlines plan to act increasingly like major online retailers and offer personalised fares to passengers.
Sita Summit: Airlines to use NDC to mimic OTAs, says United
Leading airlines plan to act increasingly like major online retailers and offer personalised fares to passengers.
The move is tied to the New Distribution Capability (NDC) airline initiative being developed by Iata. Michael Kennaugh, vice-president of IT architecture
and business enablement at United Airlines, said last week: “We’re starting to think of the airline as a retailer.”
Kennaugh suggested Amazon as a model and told the Air Transport Summit in Brussels: “The whole industry has to become more personalised, more customised and more valuable. Technology makes this possible at reasonable cost.”
Helen Porter, Sita vice-president for portfolio management, agreed, saying: “We’re looking at airlines as retailers too.”
She predicted carriers would move to “multi-channel direct retailing” and told airlines at the summit: “You need tools to push offers based on [customer] data, to optimise offers as you optimise fares today.”
GDSs have warned this could end transparent pricing, but Porter said: “It [won’t] hurt comparison shopping if passengers are willing to share their information.”
Kennaugh said: “There are obstacles. The biggest is the technology at the core of the airline – the passenger service system.”
This includes the airline’s reservations system, which provides fares and schedules to GDSs.
He said: “We need a fundamental redesign…[but] making the change with legacy technology would not be affordable.
“Revenue-managing fares is not enough anymore. We need to be able to sell products we can’t even envisage today. By 2015-17, we’ll be a complete retailer of products.”
