Previously, I discussed that airlines must be the single source of truth. The question is how do you get there?
Existing airline technologies and processes are perhaps the biggest challenge. Legacy systems and ideas were not designed for this new world of hyper-connected customer relationships. Just think about it – data is not integrated with the pricing engine; control of the offer is outsourced to the PSS or GDS; and there’s no dynamic pricing. IATA’s New Distribution Capability (NDC) to the rescue!
The hyper-connected relationship demands personalization. But the reality is that your airline might have some great CRM data, or maybe even some good analytics and propensity scores – but how do you integrate these into the pricing engine that creates your offer when it’s sitting at your PSS and outside of your control?
What about Dynamic Pricing and the new science of Revenue Management? I know some of you who live and breathe this stuff are mumbling at me right now or thinking: “Gee, everything you’ve said sounds great, but it’s not reality! We live and breathe filed fares, 26 inventory buckets, and pricing engines that can’t possibly handle the billions of requests of the hyper-connected consumer! Get real!”
Yes, yes, I hear you and yes, that’s a challenge.
In some cases, the airline is still outsourcing these essential elements to a third party – if not the GDS, then the PSS. And if it’s outsourced, guess what? You’re on somebody else’s product roadmap, not your own. That’s a problem.
And how about the airline as the single source of truth? This is where NDC and all the work that has gone into it comes into play. NDC is a giant leap forward in solving that challenge.
So how does an airline get control? Game-changing, transformative innovation! For example, Farelogix provides technology that enables better revenue management – from filed fares to dynamic pricing. Our next generation offer engine optimizes all aspects of the offer including merchandising, pricing schedules, and availability. And of course, artificial intelligence and predictive analytics will soon be the new normal.
I think Henry Harteveldt of Atmosphere Research put it best: “Dynamic pricing will require the ability to conceivably create and publish endless prices/offers in a frictionless manner tailored to a customer of one.”
As long as you remember that you and your airline are the single source of truth for your hyper-connected travelers, we’ll get there together.