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

Are You Shopping for a Shopping Engine?

Checklist for NDC “Single Source of Truth” Pricing

One of the visions for IATA’s New Distribution Capability (NDC) is the airline as the “single source of truth”. However, for an airline to control and create its own dynamically-priced offers across every channel requires new levels of performance, scalability, and flexibility not supported by conventional PSS or third party pricing engines.

Airline IT and Revenue Management executives at airlines around the world are scratching their heads as they consider what needs to be done to deliver on NDC, omni-channel dynamic pricing, and personalization. The problem? Most of the time, the airline’s incumbent shop/price provider (which may or may not be the airline’s PSS) cannot scale to accommodate high-volume search, and is limited to ATPCo-filed fares and ancillaries, and has no solution for real-time creation of an offer.

If this sounds familiar to you, then there is no better time than the present to explore the benefits of next generation shopping technology! But before investing in the time and expense of an RFP, consider this checklist as you embark on your search.

Checklist for Your Airline’s NDC-Aligned Shopping Engine

  • Handles extremely extremely high volumes of search requests with millisecond response time, and with unlimited scalability.
  • Supports large data sets, and calendar shopping without performance degradation or cost-prohibitive charges
  • Supports NDC shopping including Affinity and Attribute shopping
  • Includes a rules engine that integrates with any number of airline data sources to influence the offer (e.g. CRM, Frequent Traveler, Loyalty, Revenue Management)
  • Gives airlines unlimited control to configure business rules, with any level of desired granularity (by market, channel, seasonality, equipment, traveler profile/FF, or even individual travelers)
  • Supports ATPCO and non-ATPCO filed fares (i.e. fares created directly by the airline and/or based on bid price)
  • Supports dynamic pricing without reliance on cache or costly PSS hits
  • Provides optional engines for off-PSS Availability Calculation and Schedule-Building
  • Runs on commodity hardware with unlimited scalability
  • Includes an NDC API for delivery of the priced offer to any channel
  • Is PSS-agnostic and fully under the airline’s control

In the interest of full transparency, Farelogix’ new FLX Shop & Price engine just happens to support all of these requirements, and we would be delighted to talk with you about it. Contact sales@farelogix.com and we can answer any questions you may have.

Or, you might want to consider attending the industry’s first Control-Your-Offer Symposium, taking place in Miami April 5-6, where you can see NDC shopping and merchandising in action.

No matter what solution you choose, we wish you luck on your shopping trip!

If you’re currently figuring out your calendar for the year ahead, we have a great event for you to add. On April 5-6, we are hosting the industry’s first event dedicated to technology for airline-controlled offers.

This invitation-only symposium is specifically for airline IT, revenue management, and e-commerce executives that want to explore strategies and new technologies to dynamically manage all aspects of the airline offer – from pricing and merchandising to optimized availability and schedule-building.

For more information or to request an invitation, please visit http://farelogixoffersymposium2017.com.

Don’t miss this opportunity to hear from industry and product experts on the following topics:

  • How the new world of NDC and “Active Distribution” is transforming pricing and revenue management and driving adoption of new technologies.
  • Real-life case studies of airlines taking control using airline-hosted “offer engines” without taxing the PSS.
  • How Artificial Intelligence, Machine Learning, and Big Data is making it possible to achieve greater profitability per product, moving beyond history-based calculations.
  • How to present optimal search results including dynamic, personalized offers inclusive of custom-tailored availability, schedules, pricing and merchandising offers.

 Plus, we will take you through a technology deep dive into the industry’s only shopping & pricing engine designed for high volume, personalized, omni-channel NDC shopping.

This event will be jam-packed with actionable content to help airlines gain more control of and enhance their offers.

Request your invite today!

 

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…And we’re off!

A new year, a renewed focus on our products, our services, and our customers.

Plus, an invitation will be forthcoming to our airlines prospects and others on our radar to join us this year for a spring event.

Farelogix is ready for 2017.

Our mission is clear: To deliver the best, most innovative and efficient airline distribution engines to airlines taking control of their offer.

Our products are ready!

And our team is stronger, smarter, and more talented than ever.

We Are Farelogix!

 

 

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Yesterday in New York City, an 11-person jury determined that Sabre, through certain provisions in the Sabre/USAir contract, violated U.S. antitrust law and found those provisions harmed competition. The jury awarded USAir/AA a little over $5 million, which will be trebled to $15 million due to the case being an antitrust case, plus attorney’s fees. However, the money was never the real issue in this case.

The real issue was the jury determined that certain provisions found in most GDS/airline distribution agreements were anti-competitive. These provisions, generally grouped together and labeled as “full content provisions”, include a full-content provision, a content-parity provision, a surcharge prohibition provision and a direct-connect prohibition provision.

The impact of this decision should make it much easier for airlines to offer competitive content, generate more competition among GDSs and pave the way for much needed competition and innovation in the airline distribution market.

Farelogix applauds the jury’s finding and looks forward to a more open, transparent and innovative distribution market.

Happy Holidays!

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I’ve been thinking quite a bit about how inefficient our airline marketplace really is, and how it continues to heighten consumer stress and add unnecessary costs for both airlines and their customers.

Specifically, I am talking about the market inefficiencies and related costs and unproductive consumer behaviors in the process of searching for the “best” airline offer down to the penny – let’s just say, the inefficiencies in search.

Today, it seems consumers feel compelled to search multiple sites, i.e., various OTAs and meta search, because prior experience has taught them that airline prices do vary from one site to the next. I am not referring to negotiated rates, but rather published fares where despite the fact the airline intends a consistent fare, variations exist from storefront to storefront. Often times this price variance is minimal (perhaps taxes rounded up or down!), yet this is enough to motivate consumers to keep searching, believing that the airlines are “up to something” with how they are pricing their product.

The reason for this is, for the most part, that the airlines themselves are not even pricing their own product. Instead, it’s a few third-party companies – primarily the airline’s PSS and the GDSs, using their own home-grown pricing and availability applications – that actually create these pricing discrepancies throughout the marketplace. Why? Well each of these pricing systems use “interpretive” pricing algorithm logic and tax calculation methodologies that, in the end, can (and do) easily create pricing discrepancies. And since the consumer search sites deploy these various pricing applications, variability in pricing exists.

The unintended (or maybe not so unintended over time) consequence of this situation is higher costs to the airline from excessive search and availability transaction costs (or scan charges) imposed on the airlines by those very same third party companies that create the airline prices. It’s a bit odd when you think about it. And, to top it off, the prevailing consumer perception appears to be that the airlines are taking advantage of their customers, when in fact the airlines are powerless over this issue… or are they? What if airlines could replace those disparate pricing systems with a single, airline-controlled pricing engine capable of delivering a “single source of truth” to all channels?

Perhaps now is as good a time as any to Ask the Question.

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Airlines are beginning to rally around the idea that they need to be able to create and control their offers. This is not only the very premise from which NDC was born, but it’s also the new airline oxygen in terms of creating and maintaining More Revenue and Happy Customers in today’s world of personalization, digital commerce, and product differentiation. But you may be asking this question: “What exactly constitutes an airline offer in this new world?” So, we’re going to break it down for you.

Unlike the days where an offer represented the best filed fare, today’s airline offer is comprised of a number of dynamic elements. These include the flight schedule, seat availability, a price, and in most cases, some kind of merchandising element such as a product bundle, a la carte item, or even third party ancillary.

Now, wait just a minute. How is it that schedules, fares, and availability are considered dynamic elements of an offer? Aren’t those the very same “static” pieces of “everybody-the-same” data that got airline distribution into such a decades-old commoditized mess in the first place, and that NDC was designed to fix? How exactly is this any different from what we’ve done before?

The answer is that today’s airline offers are very different from days past! First and most obviously, merchandising has been added to the mix – all those delightful a la carte items, packages, bundles, and fare families have unleashed new levels of product differentiation and ancillary revenue. But even more importantly, today, each element (merchandising, schedules, availability, and price) can be dynamically adjusted through a set of business rules and real-time calculation logic that is applied at the very moment an offer is requested in any channel. Furthermore, all of this is achievable using engines that the airline – not a third party – controls.

With the airline finally in control of its own offer engines, it can design offers for maximum consumer relevancy, competitiveness, and choice. Airlines can create offers that are fully optimized to entice the consumer to buy what he or she specifically wants, and at a price point that makes sense for both the airline and their customer. Plus, with the airline in control, each offer is delivered in milliseconds – with no need for caching, huge investment costs, or reliance on legacy systems that are not only ill-suited for the task but very expensive to use.

Yes, this new world of airline-controlled offers is radically different from airline commerce just a few years ago, and represents a huge step forward for our industry. Even more exciting, all of this is possible using technology available today. Want to learn more? Check out our latest product line up.

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It’s hard to believe another Halloween has come and gone. It’s a time of year that the team at Farelogix looks forward to, with just about everyone showing up to work in their most creative costumes. But come November, it’s time to stop telling the same old ghost stories, and put the costumes, scary movies, and decorations away. I also give up on my attempt to lose the 10 pounds I put on chomping away at Halloween candy “for the kids”.

However, Halloween 2016 has had me thinking a lot about NDC. Since its inception just a few years ago, NDC has become a popular target for myths, scary stories, and some good old-fashioned fear mongering. “NDC is impossible!” “NDC will never work!” “NDC will end the world of travel agency distribution!” “NDC. Boo!”

I’ve even seen blog posts and articles where pro-NDC comments I have made have been twisted, morphed, and transformed into pessimistic anti-NDC rants and untruths. How crazy is that?

The time to be fearful of or worried about NDC is long gone, for a couple of reasons. First, there’s nothing to fear about a new technology standard that enables airlines to be the “single source of truth” for all their sales channels (for the first time in our industry, I might add!), thanks to a robust XML API technology that is in favor with more than twenty airlines that I know and plenty more in the queue. Second, and most importantly, NDC is – in production with live orders – already happening. It is in production with many of the world’s leading airlines and lots more have plans to follow. In other words, the NDC train has left the station, and it is now time for us, as an industry, to be full-on in execution mode. Perhaps it’s this last point that explains the recent flurry of NDC phobias and falsehoods; after all, don’t they say people tend to get nervous when planning is over and it is time for action? Well, we promise there is no monster under the bed, so let’s stop with the scary stories and instead focus on taking action.

And yes, there is plenty of action to take: Airlines are beginning to take control of technology that enables them to create and deliver their offers; GDSs need to up their game when it comes to integrating an airline’s NDC API and displaying and transacting on all this wonderful new content; corporate booking tools need to stop worrying about what the GDSs think and retool their booking apps to connect to, and display, all this wonderful new content being negotiated between airline and corporation; and the PSSs need to let their airline customers stop using their community-based applications and help their airline customers integrate the best-of-breed offer creation tools. Yep, plenty to do, but nothing too scary. (Well, unless you really just enjoy telling ghost stories…)

If you’re ready to put the scary talk behind you and look ahead at NDC-aligned technology that can help you put your airline in control of its offers, we lay out all the details here. You can also ask us any question you may have to allay your fears!

To provide airlines with greater control over their offers, Farelogix has added FLX Shop & Price, FLX Schedule Builder, and FLX Availability Calculator to its flagship Airline Commerce Gateway. With the addition of these three NDC-aligned engines, airlines can use the enhanced platform to provide dynamic merchandising, pricing, availability, and schedule building as part of real-time offer creation and delivery across all channels. FLX Shop & Price, FLX Schedule Builder, and FLX Availability Calculator are currently in test with three airlines.

The new engines are rules-driven, fully under the airline’s control and, in an industry first, eliminate costly look-to-book or search volume limitations. Designed for unlimited scalability and millisecond response times, the new Farelogix pricing, availability, and scheduling engines deliver superior functionality and performance at a significantly lower cost of ownership than legacy solutions from airline PSS/GDS providers. They are fully interoperable with the FLX Merchandise platform, and feature a common graphical user interface (Offer Designer) that allows intuitive and highly flexible rules definition for all engines. The new components are also integrated with the Farelogix Open Connect (formerly Direct Connect) technology, which provides PSS-agnostic connectivity to airline systems and orchestration of shopping, booking, ticketing, ARC/BSP reporting, and order management workflows. A certified NDC XML API serves as the airline’s single delivery vehicle for all sales channels and touchpoints.

“To become the ‘single source of truth’ for every offer in every sales channel, airlines must be able to generate dynamic, personalized offers in milliseconds, without cost-prohibitive look-to-book or search query limitations. As legacy systems were not designed for this, the industry has been conditioned to believe that dynamic, real-time offers are not feasible. But that is outdated thinking,” said Jim Davidson, CEO of Farelogix. “With the new additions to our Airline Commerce Gateway, an airline can now deliver real-time offers – based on flexible rules designed entirely by the airline and for use across all engines – significantly faster than many less-accurate cache solutions. Plus, the airline now also has the option to host the engines and thereby fully control its technology infrastructure, using commodity hardware with unlimited scalability. Farelogix is pleased to be leading the way in this new world of NDC shopping and airline retail.”

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With the addition of the three new engines, the enhanced Farelogix Airline Commerce Gateway now includes six interoperable components:

FLX Shop & Price (new): Provides an airline with a purpose-built shopping, offer, and pricing engine to handle NDC-aligned shopping, offer-creation, faring, and pricing requirements within the Gateway, including published fares from ATPCO, private fares, fare families, dynamic pricing, affinity and attribute shopping, and merchandising and ancillary offers generated directly by the airline. Built to process pricing data from multiple sources – traditional fare filing, airline direct-to-engine data, bid/sale data, or any combination – FLX Shop & Price provides the airline with complete long-term pricing flexibility.

FLX Availability Calculator (new): A high-performance, high-scalability solution that enables an airline to calculate its own availability on demand, without taxing the PSS and while retaining full airline IP over its proprietary rules algorithm. Designed for high transaction volumes, NDC shopping, large date-range processing, and affinity and attribute shopping, FLX Availability Calculator provides dramatic PSS cost savings and new revenue by optimizing search results including dynamic, personalized availability searching with unlimited query capabilities.

FLX Schedule Builder (new): Puts the airline in full control of dynamic, personalized schedule building, and also opens the door to new revenue opportunities by optimizing schedules based on the most profitable connections and routes. FLX Schedule Builder provides support for large date-range processing and point-of-interest and merchandising-driven schedules, with unlimited scalability and unparalleled response time – all without taxing the PSS or any third party (e.g., GDS).

FLX Merchandise: An airline-controlled merchandising and rules engine that allows the airline to create custom-tailored product and service offers for dynamic retail across multiple sales channels, including airline.com, mobile, check-in kiosks, call centers, and travel agencies (direct or via GDS) – all without hard coding and in a manner that is PSS-, channel-, and IBE-agnostic. Offer creativity and personalization, speed to market, and extended development tool capabilities are signature components of this industry-leading engine.

FLX Open Connect (formerly Direct Connect): Allows the user to make and manage bookings and reservations out of the Airline Reservation system using whatever type of messaging protocol is required (e.g., EDIFACT, OTA, XML, GDS, or proprietary messaging) and with full support for NDC Offer and Order Management. All content is standardized and normalized in XML. FLX Open Connect manages all required orchestration, including integration with the airline PSS and other systems, channel management, ticketing, settlement and reconciliation (including ARC/BSP), travel agency integration, and a comprehensive Developer Support program.

FLX NDC API (NDC Level 3 Certified): Provides a single, robust delivery API by which the airline’s full suite of content reaches the marketplace, including the airline’s kiosks, call center, website, and mobile channel. The airline’s NDC API can also be implemented directly with agencies, OTAs, and corporate booking tools, or through a GDS or other content aggregators.

Farelogix also offers the SPRK Point of Sale tool, a web-based travel agency point-of-sale system that is fully integrated with the FLX Airline Commerce Gateway. In use by thousands of agencies worldwide, SPRK showcases the airline’s product using Brand Standards and Customer-Specific Offers in an intuitive and efficient agent-selling environment. SPRK provides comprehensive support for shopping and sales (including custom fare bundles, fare families, and à la carte merchandising), document issuance (ticket and EMD), and servicing (exchange, refund, etc.) of air travel content.

I thought I would summarize a few of the concepts and themes I heard throughout the recent IATA WPS held in Dubai. I didn’t take copious notes so quotes are not exact and quotations are for emphasis only.

  • “Legacy airline systems and GDS technology just can’t keep up with the innovation required by airlines” – various airline executives on panels and delivering presentations.

Comment – Frankly, I can’t keep up with how many times I have heard this over the last few years. It’s clear that the legacy players are not going to make the required investments regardless of how often the airlines complain. It is probably time for the airlines to stop waiting for legacy providers to deliver, and consider taking a different approach to get what they need. Or at least, Ask the Question!

  • “NDC is just not happening fast enough.” – various airline executives.

Comment – There are two root causes that explain the slow pace of NDC. First and foremost, the PSS and GDS providers (yes I refer to the handful of powerful companies that control the lion’s share of airline distribution technology) don’t really want NDC to happen, despite their countless public proclamations of NDC support at prior WPS events. If the GDS/PSS community wanted NDC, we would see evidence of rapid, game changing innovation and unfettered attention to airline and agency unmet requirements. Actions always speak louder than words.

The second cause of slow NDC adoption is the legacy procurement processes of many airlines. Even airlines that say they want to move fast and invest in new NDC-aligned technology solutions such as their own offer creation engines (shopping, merchandising, availability, etc.) are often stymied by impossibly long procurement processes (RFIs/RFPs) that can easily take more than a year to complete. And that assumes the business people involved in the “RFP Marathon” stay in those positions long enough to see it through. In our experience, RFPs take just over a year at best – often resulting in outdated requirements by the time a decision is made. In addition, 50% of the time, a key stakeholder leaves, and this further paralyzes the process for another 6-12 months. (And meanwhile, how many millions has the airline lost in missed opportunities for more revenue and happy customers? It’s time to Ask that Question!

  • “Corporate buyers need access to airline ancillary services & content” – various airline executives, a couple of corporate buyers and consultants, and even a few travel agency representatives.

Comment – They sure do! The last time I checked, almost 80% of corporate bookings were transacted via a corporate booking tool. I can honestly say that after more than three years into NDC that I still can’t point to one corporate booking tool that is supporting airline ancillary services and content in a meaningful way. Why? Airline content finding its way to a corporate booking tool is controlled by the GDSs. Refer to Notable Quote #1.

In summary, these are the common themes:

  • Airlines need to invest in innovation and use faster procurement processes.
  • The PSS and the GDS need to put up or get out of the way.
  • And the corporate booking tools need to be free to take content directly from the airline’s NDC API.

We will continue to invite all of you to Ask the Question—specifically the tough questions.