The COVID-crisis has uncovered a need for airlines to change, and fast. There is an upside to this new imperative. There has never been a more necessary time for far-reaching transformation in our industry than now.

To take part in the Air Transformation Lab survey, visit: Accelya.com/lab

Accelya and Farelogix have now merged to respond to this pressing need by providing airlines with modular, integrated platforms that deliver enhanced airline choice. The joining of two technology leaders, committed to positive disruption, is an inflection point in airline technology. From offer to settlement, accelerated transformation of airline commerce is now within reach. To be successful, the airline voice needs to be at the center of new thinking and technology. That’s why Accelya has launched the Air Transformation Lab, a series of activities to explore the current state of airline commerce and uncover the DNA of a profitable future.

The Air Transformation Lab includes a survey of airline leaders developed by Atmosphere Research Group. It aims to build a fact-based understanding of their views and what’s holding us back. To enrich the study, the Air Transformation Lab team is engaging industry executives in in-depth interviews, think tanks, and a series of virtual boardroom discussions. The result will be the first major report examining the future of airline commerce since COVID-19.

The Air Transformation Lab is underway, and airline professionals can take part by visiting Accelya.com/lab. As the results unfold, the Air Transformation Lab team has identified early emerging themes, which are explored below. 

1. Expanded Reach

With the sharp drop in customer demand, distribution steps out as the hero. Airlines acknowledge the need to be everywhere that makes sense and are working to broaden their distribution portfolios. 

An example of this trend is the keen focus on evolving existing distribution strategies and enhanced channel relationships.

2. In Turbulent Times, Airlines Need Control

Cost-saving and scalable offer innovation are two factors driving an uptick in airline-controlled offers with NDC. To make the most of available internal resources, airlines are opting to build their NDC APIs and supporting programs in-house. Others view the path of partnering with an experienced tech provider as a cost-saving and value speed-to-market as a way to future-proof their strategy.

Emirates is redefining its distribution mix through a major focus on its Emirates Online B2B strategy with an emphasis on getting closer engagement with travel agencies and customers. At the same time, Air France/KLM is changing its distribution economics by treating the GDS as an aggregator and has introduced multiple levels of surcharges to optimize channels. 

Meanwhile, in Latin America, one prominent carrier is putting airline-controlled offer engines and NDC behind all channels, including its new airline-controlled Internet Booking Engine, to realize a “single source of truth” strategy. 

3. Stimulate and Capitalize on Demand, There’s Everything to Play for

Airlines need to stimulate and maximize the value from demand but cite a slew of barriers to overcome. For example, the disruption of lucrative customer segments, such as business travel, has upended many traditional strategies, from route networks to frequent flier marketing. 

American Airlines reports that 90% of its business now is leisure and that travelers often come from a different demographic than pre-COVID times. As a result, American Airlines has introduced innovative leisure bundles to support the needs of less seasoned travelers and have added more automation to the travel experience to meet the expectations of younger customers.

Many airlines find themselves blindsided by the disruption of historical data for demand forecasting. As such, responsiveness and flexibility have become a lifeline. There is ‘everything to play for’. 

Against the backdrop of the COVID emergency, Lufthansa Group has prioritized its continuous pricing strategy. It is rolling out continuous pricing across all channels to quickly react to market changes, take advantage of spikes in demand, and better serve new customer segments.

Airline executives acknowledge that thinking about mid- to long-term strategy is a challenge when, more often than not, survival is the daily focus. However, these leaders are keenly aware that recovery will come. Those who can, are planning to win. 

To find out more about the Air Transformation Lab, please visit Accelya.com/lab.

by James Fernández, Group CCO, Accelya 

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