Amadeus’s merchandising vision aims to unlock £130 billion of airline revenue

Amadeus’s merchandising vision aims to unlock £130 billion of airline revenue

Amadeus has unveiled its vision of modern airfare merchandising claiming it could unlock £130 billion of untapped revenue for airlines by 2020.

The European market-leading GDS and travel technology supplier believes it is in prime position to lead the move towards a more sophisticated personalised online shopping future.

A new global merchandising platform will be developed that will enable airlines to dynamically create relevant offers and distribute these both direct and through third party channels.

Amadeus cited industry estimates that indicate airlines are already earning $50bn in annual revenues through the sale of ancillary services, primarily through direct channels.

And it said its own research has found a further $53 billion could be secured by 2020 by embracing multiple channels for these ancillary sales. In addition, Amadeus claimed new innovation in travel technology can bring a further $77 billion in the same period.

Luis Maroto, chief executive and president of Amadeus, said: “The global travel industry, and the way in which consumers experience it, is changing so dramatically that it requires a fundamental change to the way in which travel is sold and how the traveler is served.

“With our industry insight and experience, our unrivalled research and development capacity and our global subscriber network, Amadeus is uniquely placed to bring the industry together in a global travel ecosystem that will bring huge benefits to both airlines and subscribers, offering significant potential to the industry to unlock greater value from its products and services.”

Amadeus set out three key elements that underpin its merchandising vision:

1. The development and roll out of a new Global Merchandising System so airlines can create their offering dynamically, to provide consumers with the most relevant offer at any given time, through any point of sale of any channel, direct or indirect and through any device;

2. The evolution of its retailing and distribution systems to enable the efficient and effective delivery of enhanced airline content at the point of sale, whether in the direct or indirect channel with a focus on agents’ needs to foster adoption;

3. Full integration of both the new Global Merchandising System and Amadeus’ retailing and distribution systems with the Amadeus Altéa PSS Suite, delivering an end-to-end traveller journey across key touch points such as servicing, delivery, disruption management plus ticketing and fulfillment.

Julia Sattel, senior vice president of airline IT at Amadeus, said: “The introduction of dynamic and flexible merchandising tools for airlines will give them the opportunity to deliver a unique and personalised customer experience for each traveler and in doing so could unlock significant revenues.

“Each customer values something different in their travel experience and Amadeus can help airlines to become intimate with their customers’ needs and deliver them the experience that they want, increasing both their loyalty and value.”

The need to move to a more modern airfare distribution model that provides customer with more personalised offers through merchandising has been driven by airlines developing their own direct connect technology and Iata’s New Distribution Capability standard.

Although GDSs like Amadeus remain at the heart of the airline industry and well-placed to take advantage of these new demands they have had to update and modernise their technology to retain their position in the industry.

Amadeus believes its role as the provider of technology that sits behind many airlines’ operations as well as e-retail solutions provided to 110 carriers makes it best placed to offer its customers technology that can meet all the demands of their customers.

The firm said: “Amadeus believes this will be achieved through the personalization of the traveler offer throughout the entire journey, delivered through every channel by systems that are open, intelligent and dynamic.

“With deep collaboration across the travel industry, new business opportunities will be created. By bringing together providers and participants across the travel industry at each key touch point in the traveler’s journey, unique customer insights will be leveraged to deliver offers and services that are personalised, relevant and timely.”

The new Global Merchandising System and Amadeus’ retailing and distribution channels will be connectivity agnostic, available to Altéa and non-Altéa customers, and will enable the tailoring of airline content in every segment of the subscriber market and through every device, channel and customer touch point. Amadeus expects the systems will be compatible with planned NDC XML industry standards.

Holger Taubmann, senior vice president of distribution, said: “Amadeus has a long track record of bringing subscribers and airlines together to develop new revenue opportunities and we are committed to maintaining that approach and making the necessary investment to develop a global travel ecosystem that will enhance commercial opportunities for both.

“We do this by providing airlines with a platform to differentiate their offering, and to stand out and generate more revenue in a fierce competitive environment whilst we provide our subscribers with efficient and transparent access to the broadest range of content available.”

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