Questioning the travel industry status quo, one blog post at a time

FLX-M Use Case Challenge

Corporate travel is the lifeblood for many airlines. With competition heating up with differentiators like more comfortable seats, additional legroom, and countless other value-added services, how the airline retains its corporate clients—or woos them from a competitor—is more strategic than ever before.

Just think, not so long ago, in the pre-NDC, pre-merchandising world, the only option for airlines seeking to accomplish a “differentiated corporate product” was to file private/negotiated fares for corporate clients via ATPCO. The extent of the differentiation was the filed fare itself, which was special for that corporation. Missing from that picture was the myriad of other services and privileges negotiated for that corporate client. Rather than competing on a customized, relevant offer of services, airlines were stuck competing strictly on a number and a fare basis code.  Fortunately, those days are behind us. Today, using sophisticated merchandising systems such as FLX Merchandise, airlines can configure customized offers that go far beyond a filed fare and include a series of bundled services or options most relevant for that trip, corporation, and traveler. Let’s look at a couple related Use Case Challenge examples. Read the rest of this entry »

FLX-M Use Case Challenge

There are many universal truths in life: money isn’t everything, laughter is the best medicine, and so on. I think another one is that people really love a good meal. And for decades another universal truth was that airplane food was bad. But that’s all changing! Today, airline meal options are plentiful and tasty. Airlines are going gourmet and some even have culinary delights from celebrity chefs!

The power of meals to differentiate an airline’s brand – and drive revenue – has made this a popular Use Case topic, and so we’ve decided to feature an example. So, how does an airline approach premium meals for Economy Cabin?

Like any product offering, there are a few basic questions for the airline to answer. In this case, things like:  What meals will the airline offer? In what conditions does a particular meal make it onto the menu (based on markets, flights, regions, etc.)? And what—if anything—will the airline charge for the meals, taking into account personalization and loyalty status? Each of these “answers” are is easily configured in FLX Merchandise, which will then drive the business rules engine to pass the correct offer or choices to the airline’s point-of-sale using standardized XML web services. Let’s take a quick look. Read the rest of this entry »

FLX-M Use Case Challenge

Airline Merchandising isn’t always about creating value by selling additional products and services. Very often, using merchandising to reward loyalty can be just as beneficial. Loyal and high-value customers often expect a certain level of service, and retaining these customers by providing certain perks can be extremely valuable. This brings us to today’s Use Case Challenge…

Today’s Challenge: Chauffeur Services

In this example, an airline wants to offer chauffeur drive services at departure and arrival for travelers in the first- and business-class cabins who have the highest level of frequent flier status. In this example, we’ll focus on the arrival portion of the offer. Let’s see how this looks in the offer designer…

Follow the JFK – * node to the 0.00 USD node. In this scenario, the service is offered at no charge for those travelers in first and business class, who also are members of the Tier 1 frequent flier program. Read the rest of this entry »

 

FLX-M Use Case Challenge

Ancillary revenue has become key to airline success, with almost $50 billion in revenue projected in 2014. As luck would have it, we have an award-winning airline merchandising engine (FLX Merchandise) that is helping a number of airlines grow revenue and make customers happy. Among all the cool features of FLX Merchandise, without a doubt, the one that always tops the list among our airline users is flexibility. It’s always fun to demonstrate how new products and services can be introduced in a matter of minutes (not months!), without hard coding and without the overhead of administrating a static product catalog.

In fact, showcasing the flexibility is how we came up with the very first FLX Merchandise Use Case Challenge. There we were, leading a Merchandising Master Class in Singapore, and we thought, “Why not try a live on-the-spot challenge?” So about five minutes into the event, we invited about 100 merchandising managers to submit ideas and strategies for merchandising. What do you want to offer, to whom, and how? We were impressed by the creativity of the submissions—some of these people were really thinking outside the box! Read the rest of this entry »

FLX Ancillary AwardGuess what? Our friends at United Airlines nominated the FLX Merchandise product in the Airline Information 2014 Mega Event Awards for Innovation of the Year – and we won! This is news our entire company is thankful for as we head into the holiday season!

We were nominated in the Ancillary Revenue and Merchandising category based on United’s cross-channel use of our Farelogix FLX Merchandise product. United set the stage for us to win by highlighting how we’ve helped them achieve their lofty goal of increasing ancillary revenue by 11% per passenger in Q3 2014, and generating revenues of $3 billion in 2014 from ancillary sales of a variety of products and services, including Economy Plus seats, priority boarding, bags, and various subscriptions.

United hosts the FLX Merchandise product and has integrated it directly into their technology stack. This allows them to quickly and efficiently update product pricing, add new products and services, and continuously optimize their offers. FLX Merchandise also generates offers for United’s Economy Plus seats across channels including through the GDS, allowing travel management partners and travel agencies to seamlessly book extra legroom seats. Read the rest of this entry »

What? Seriously? Am I going to start bucking the conventional wisdom of an airline fare already? Slow down… we are all just fresh off IATA NDC-a-palooza in San Diego where everyone and their aunt was testifying to how ready they are for NDC.

So with the NDC Acceptance Position now a badge of honor (or of courage, for us early supporters), you bet I am taking on the concept of a “fare” because not only is the airline industry no longer just about “fares and schedules,” the very nature and concept of an “airline fare” is now in question.

Ok, I’ll be gentle and do my best to be brief because it may take a bit of time for this to sink in…at least it did for me, but when it did, boy, did the light bulb go off!

FLX-M Still

This new way of thinking is about creating truly dynamic bundles containing what we would traditionally know as a “fare” along with certain ancillaries, where the “fare” is treated as a “service item” within the actual bundle, similar to the ancillaries themselves.  Read the rest of this entry »

 

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In advance of Airline Information’s Mega Event 2014 in New Orleans, Farelogix will once again host a Pre-Conference Ancillary Revenue Workshop on Monday, November 17th. The workshop will feature presentations from IdeaWork’s Jay Sorenson and a representative from United Airlines in which they discuss the motivation and strategy behind implementing an ancillary revenue program.

We will also take the audience on a journey on how these technologies can be implemented. And back by popular demand, we will present our Use-Case Challenge! Our developers will be put to the test with on-the-spot use case scenarios from you, the audience, so be sure to bring your ancillary revenue ideas!

Space is limited so register now!

This week, I thought I’d toss out a question to all of you airline marketers:

Can you imagine a situation in which you invite one of your technology vendors to choose which color to paint your new fleet of planes? Or perhaps invite an outsider to decide how to structure and market your new loyalty program… or maybe even dictate what other companies you are allowed to partner with? Whoa OK, OK, I can hear you answering all the way from here – your answer is (correctly) a resounding no! Of course, your airline brand, your products, and your partners are core elements of your strategy and marketplace identity. Of course you would never turn over the control to a third party!  OK, I guess it was a silly question.

© buchachon

© buchachon

Well if that’s so silly, then maybe try to answer this: Why, in today’s world of merchandising and multi-channel customer engagement, do some airlines allow third parties to dictate what products the airline is allowed to sell and where, largely due to technology limitations and delays? Yes, this happens! “We just don’t know anyone who can help us sell seats the way we really want to so we just do what they can do and try to live with what they can do.” That is a real quote from an airline I met with just two weeks ago!  Or this, recently shared by a major international carrier: “NDC sounds promising because we do so much through the agency channel and we want to extend our merchandising there…but our PSS provider says realistically it will be years before it is possible, so I guess we’ll have to wait.” What? And you accept that answer? When in fact the decision of “should we offer it?” should never be dictated by what a particular technology provider can do. To accept that is to limit your potential right out of the gate!  It’s like your provider telling you to dream big…but only in black and white. Read the rest of this entry »

We recently announced the launch of NDC-Xpress, a technology solution that enables airlines to implement New Distribution Capability (NDC) with minimal risk and unprecedented speed to market. Building on the core technologies of the flagship FLX Airline Commerce Gateway, NDC-Xpress delivers airline-controlled merchandising, pricing, and API distribution in a SaaS model, with implementation delivered in less than six months using the latest NDC schemas (Version 1.1).

NDC-Xpress logoNDC-Xpress enables airlines to immediately begin generating new revenue streams from the sale of value-added services in the agency channel. In addition, significant cost savings may be realized through the delivery of content across multiple indirect channel outlets (i.e., GDSs and other third party aggregators) via a single, standardized XML API inclusive of a common and supported implementation structure.

“The focus of NDC-Xpress is speed to market for the long overdue delivery of airline ancillaries, merchandising, rich content, and value-added services in the agency channel,” said Jim Davidson, President and CEO at Farelogix. “With the final approval of IATA’s Resolution 787 (NDC) by the US Department of Transportation and the competitive push for airlines to offer dynamic and differentiated content across channels – beyond airline.com – the timing could not be better for Farelogix to deliver a solution that brings NDC to life, quickly and to the benefit of all parties.” Read the rest of this entry »

At Farelogix, we consider ourselves a disruptive force in airline distribution technology. We innovate. We push the envelope. We challenge ourselves. And because of all that, we produce some cutting-edge technology. Yet I still find myself in meetings with clients and at conferences asking, “How can this be?” Or, “How can an airline still be pigeon-holed like this?” Of course I’m not going to name names, but I think it is important for you to hear the stories and maybe, like me, you’ll be mad as hell and not willing to take it anymore!

© hxdyl - Fotolia.com

© hxdyl – Fotolia.com

For example, a couple of months back we were meeting with an airline to discuss merchandising. We love merchandising. We, along with the rest of the industry, now know for a fact that airline merchandising leads to better customer happiness and more revenue for the airlines. Plus, (shameless plug) we have awesome merchandising technology. So, needless to say, we were psyched for the meeting and it went really well. We showed them some really cool stuff around pricing seats, and even other cool stuff like dynamically pricing the seats and seat-location bundles, and since we already had a direct connect with this airline, we showed all this working in their system – no gimmicks or hocus pocus. Not exaggerating, it took us less than an hour to create these real examples, built right there in the conference room, and they were wowed.

During the demo we heard a pain-point from the airline. I don’t recall if it was because they were introducing new seat configurations or what, but basically they wanted to change the prices on some seats. It wasn’t even complicated stuff like dynamic seats based on city pair, length of flight, peak travel time, or anything like that. They told us their IT provider told them the request to change the price on a few seats would cost over half-a-million dollars and take up to six months. Six months! We had literally just shown them how they could do it in under an hour. Yet this is what airlines are still putting up with! It doesn’t have to be like this!

Imagine if I were selling a pair of shoes on eBay, and I wanted to change the price from $25 to $20. But instead of just being able to login to eBay and change the price, I had to write eBay, and they would write me back in a month or so to tell me they could change the price on the shoes I was selling but it’d take a month and cost $10,000. I know it sounds ridiculous, but this is the world so many airlines still live in. It’s absolute madness!

So, airlines, the next time your IT provider, or even your in-house IT folks, quote you some seemingly astronomical price or time frame for a merchandising-related implementation, tell them, “Hang on, I’ve got to Ask The Question!” Then call us. Chances are if we are not too busy, we could show your use case actually working in a real airline test system in a day or so.

Remember time is money, and the longer you wait the more money you are losing.