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airlines.iata.org

Issue 03: Thursday 25 October 2018

Airlines.

Airline Industry Retailing Symposium

SPONSORED BY

October 23 - October 25, 2018 | Rome, Italy

Caroline Strachan, Festive Road and Sean Menke, Sabre

A call for collaboration

ISSUE 03

How the market evolves is a key consideration for airline chief executives, according to Sean Menke, CEO, Sabre. It is also a prime concern for travel technology suppliers as they look to meet customers’ needs in an increasingly dynamic industry. In the opening session of Day 2 at the AIR Symposium, Menke cited the rise of low-cost carriers (LCCs) from 10% of the market in the early 2000s to 30% today as one driver of change in recent years. Full-service carriers have gone through a series of adjustments—aided by new technologies delivering greater efficiency—to better compete with LCCs. Oil prices, meanwhile, have a significant impact across the board,

Day 02 highlights Aleks Popovich

“It is about trust and openness. That is what we are focused on.” Sean Menke, Sabre CEO

whether it is an increase or decrease. For Sabre, such market developments mean advancing technology to deal with the different demands on a modern airline. New Distribution Capability (NDC) is a cornerstone of what Sabre is trying to achieve with the next generation of solutions. Menke said that collaboration is essential to implement NDC. “Everyone has to take responsibility,” he noted. “It is about trust and openness. That is what we’re focused on.” Menke accepted that disruptive technologies are influencing aviation but felt that established travel technology companies are still best placed to serve the industry, citing aviation’s complexity and underlying legacy systems as the main reason. He also highlighted the massive investment all airlines have made to differentiate themselves in the market. So, though “some LCCs might not mind selling through Amazon or Google, other carriers that have invested billions in their product may feel differently.” All this does not mean travel technology companies are resting on their laurels. Sabre has 10,000 employees around the world and is recruiting talent from digital companies and other relevant industries. The executive management team is fresh-faced with the longest serving at the company for just four-and-a-half years. “The focus is on our customers’ needs but to do that properly we have to take a hard look at ourselves,” Menke said. The aim is to drive Sabre to help customers sell the way they want to sell, be it direct or indirect. And rather than fight for incremental gains in market share, Menke believes the real question is “how do we make the pie bigger?” That is how best to serve all parties, including the end consumer.

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PLATFORM

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Thursday 25 October 2018: Issue 03

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ATFORM

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Issue 03: Thursday 25 October 2018

Innovate Faster 4

Innovation alone is not enough to deliver results for aviation. According to Stephan Copart, IATA’s Head Strategy, Financial and Distribution Services, transformation also needs to happen faster. Without this crucial ingredient, solutions and technologies may become obsolete before full implementation; investments will not realize their benefits quickly enough; new entrants will be blocked by a legacy environment and innovation will be driven by third parties at the expense of industry standards. “Our transformation initiatives can take 7–10 years before mass adoption,” says Copart. “As an example, the Electronic Miscellaneous Document project had not delivered all its benefits before the solution became obsolete and was replaced by ONE Order.” Similarly, the Fast Travel project struggled to reach 40% adoption before mobile and digital identity solutions overtook kiosks and passport scanners. Copart says that the industry needs to develop greater agility and open standards. The new transformation model needs to be based on committed industry leaders taking the risks but also realizing benefits earlier than others; and followers who will embrace the change at their own pace when solutions are more mature. To support this strategy, IATA has developed an Innovation Ecosystem that provides the necessary infrastructure to deliver transformation with speed. “To make sure the industry will realize all the benefits of innovative initiatives before Subscribe free to IATA’s Airlines. magazine at airlines.iata.org

they become obsolete, we need to design a much faster innovation cycle,” Copart says. “IATA is building an open and innovative ecosystem that enables acceleration of our industry initiatives while stimulating new entrants. This will enable innovation cycles that could be as short as one year from problem statement to early adoption.” The innovation ecosystem will be articulated around three main objectives: • Open innovation with new entrants • Accelerated innovation through networked incubation and funding • Innovation speed to market with industry mobilization and adoption There are seven major streams: ideate; develop and test; incubate;fund; implement; communicate; and partnership. IATA is leveraging such existing innovation tools as hackathons, events, and industry data models. It is also building missing platforms and tools, including a development hub and open API framework, and will utilize member airlines’ innovation structures where appropriate. “The Ecosystem will foster innovation processes to answer critical business questions through rapid ideation, prototyping, solution development, and user testing,” concludes Copart. “Innovation sprints will let the industry reach clearly defined goals and deliverables and gain key learnings, quickly.


Thursday 25 October 2018: Issue 03

Day 2 at AIR Symposium

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Issue 03: Thursday 25 October 2018

The need for open architecture 6

The passenger service system (PSS) is at the core of most airline businesses. But yesterday’s panel on industry architecture admitted its future is in doubt. Most airlines are tied to platforms that are decades old,” said Glenn Morgan, Member of IATA Industry Transformation Group. “What can you do on a PSS that you can’t do on a dot.com? The answer is very little.” The panel argued that though there are challenges in the speed and scale, work to transition away from the PSS is vital for an airline. The increasing complexity of products and the growth in the number of partners helping to deliver those products is putting pressure on aviation systems. Morgan described the PSS as a “monolithic platform.” As such, simply introducing a new form of payment is a lot of work but “in the world of e-commerce it’s a click.” Airlines should strive for a single commercial platform with open APIs that supports any channel. This would enable all partners as well as the airline to innovate where appropriate. And innovation is why the move away from the PSS is equally important to the end consumer. The PSS may not be a differentiator— nobody chooses which airline to fly based on which PSS they run—and it is not a significant cost compared with fuel and labor. But, said Soumit Nandi, Managing Director, Customer Technology Platforms, United Airlines, there is a lot of value in having the right platform. “It enables you to innovate with speed and bring the right products to market,” he noted. “You need to bring the full value to every aspect of your business to meet customer needs.”

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The most exciting industry in the world SPONSORED BY

The airline industry is the most exciting industry in the world. Whether you are flying the planes, maintaining them, selling seats, serving customers on board, at the airport, at the call center, whether you are a travel agent or an airline employee; and regardless of the area you might work in, you have an active role in connecting people together. You connect people from all ethnicities, genders, whether rich or poor, business people, families gathering for the holidays, people exploring new destinations: the airline industry brings the entire world closer within a few hours’ reach. It is an industry that drives the world economy, makes products available within hours of you ordering them, fills your hotels, your taxis, your restaurants, causes thousands of people to be employed and thousands to enrich their lives with new encounters and new experiences. There is no other industry like it. JR Technologies helps airlines put passengers at the center of their sales and distribution strategies, regardless of whether the passenger approaches the airline on its own website, though a travel agency, an airport kiosk, or a social media shopping cart. We made it our mission to develop innovative IT solutions that allow airlines to know their passenger’s preferences and personalize their services accordingly. Knowing the customer is key to any business. To see how JR Technologies does it while remaining GDPR compliant, visit booth #23 at the AIR Symposium.


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Hackathons The IATA Airline Industry Retailing (AIR) Hackathon is a 28-hour competition marathon, which brings together up to 120 developers who work hard to tackle specific airline industryrelated challenges. This Hackathon concept is about pushing airline distribution from a world of

legacy technology with a small number of players to a world of modern technology where anyone can come and build solutions, be creative and drive innovation. Come and see the winners of our AIR Hackathons and the solutions they have built around managing overbooking, simplifying group bookings, and stress-free travel.

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Profile for Redactive Media Group

IATA Airline Industry Retailing Symposium, 25 October 2018  

IATA Airline Industry Retailing Symposium, 25 October 2018  

Profile for redactive