Commercial leaders at the World Passenger Symposium encouraged the air transport industry to accelerate the journey to airline retailing.

Interviewed in turn, the leaders painted an optimistic view of the future. Tamur Goudarzi Pour, CCO, Swiss, said the next two quarters were looking positive for the airline despite the headwinds. Key to this was that 75% of ticket sales were through the Lufthansa Group’s own channels or New Distribution Capability channels. That gives the group a much better understanding of, and relationship with, the customer.

“We need complete freedom to define the offer,” said Pour.

A multi-disciplinary team is essential as the offer-order environment cuts across several departments, including commercial, distribution, marketing, and finance. New skillsets will therefore be required. The significant change in airline processes this implies means the transformation will not happen overnight but is nevertheless worthwhile.

Pieter Bootsma, EVP and Chief Strategy Officer, Air France-KLM, said his airline group also posted positive figures and was surprised at the strength of the industry rebound. He did accept, however, that there were significant operational problems at Amsterdam Schiphol Airport.

In terms of retailing, Bootsma emphasized the scale of change that true retailing requires. Direct bookings are increasing, and it was notable that online bookings had increased significantly in the international market. This allows airlines to get closer to customers that were previously unknown and implies a different set of requirements from domestic or short-haul travelers.

Corporate bookings have been a challenge, however. Air France-KLM is working with a global distribution system and travel management company to establish the right way forward. The work, said Bootsma, is contributing to retailing momentum. He said the whole value chain needs to move together for retailing to be a success. The self-booking tools also need to be available to realize the full potential of the concept. Better offers cannot be comprised by inefficient processes.

Anand Lakshminarayanan, SVP Revenue Optimisation & Distribution, Emirates, said traffic was at about 80% of pre-pandemic levels for the airline and growing fast.

He said the post-COVID travel environment was different and developments like NDC give the airline a chance to understand new customer requirements. Bookings are happening later and there is a demand for premium leisure travel, for example.

Emirates’ direct bookings, including the website and business-to-business transactions, are at about 40%, a high number for a carrier that focuses on long-haul and transit traffic. That gives the airline good flexibility to adapt their product to customer needs.

He accepted that there was still a long road ahead but thought they would be close to where they wanted to be in retailing in 3–5 years’ time. Trade partners will always remain vital to the airline, but it no longer wanted customers to only see a green screen of fare and schedule. “We want to tailor our product in a much more meaningful way,” he said.

All interviewees agreed that despite the challenges the offer-order environment, supported by such IATA initiatives as NDC and ONE Order, was critical to increasing airline revenues in the future. Airline retailing does involve major changes but, like the quest for new energy sources, it is a transition that the industry must go through.

 

The interviewees

Tamur Goudarzi Pour, CCO, Swiss

Pieter Bootsma, EVP and Chief Strategy Officer, Air France-KLM

Anand Lakshminarayanan, SVP Revenue Optimisation & Distribution, Emirates Yanik Hoyles, Director, Distribution, IATA (Moderator)

 

Credit | iStock
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