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Archive for the ‘Technology’ Category

It’s an understatement to say that we are living Moore’s law in terms of the pace of technological change. The adoption of smart, wearable technology, and voice-controlled systems — and the fact we can do nearly everything we need to do on our phones — was not part of our reality just a few years ago. To keep pace, retailers of all types are challenged to engage with their customers using the latest technologies and methods. Airlines are no exception, and the pressure has never been greater for airlines to up their game.

Airline executives realize that they must find ways to engage with travelers at any point in the trip process, and make it easy for travelers to shop or be presented with offers anywhere, and at the right time. “Show me you know me” is the name of the game, and if the airline doesn’t figure out how to be a “single source of truth”, they will lose the customer relationship. (And by the way, there is a long line of entities willing to take over that relationship if the airline doesn’t claim it – more on this later).

For many airlines, shifting to the world of dynamic retailing is exceptionally difficult. Why? Because it means they have to take control of their offer – something most airlines have never done. And yet with Moore’s law in play, there is a need to do it now or risk losing out for years to come.

Here’s some good news: recently there has been an increasing amount of practical discussion about airlines taking control. Airlines are responding by examining available options to take control of their offers, distribution channels, distribution costs, and brand. As an example, Farelogix hosted a “Control Your Offer” event in April that was attended by airline executives from around the world, spanning Revenue Management, IT, Ecommerce, and Distribution – This demonstrates that this next wave of change is big, and involves the full range of airline stakeholders.

There is growing recognition that effective airline control means not only “single source of truth” API’s (NDC), but also airlines taking control of their own merchandising, pricing, and inventory (availability). Yes, I said it. Airlines must have control over their own pricing and availability for all channels. When you think about it for a few minutes, it’s these ingredients that command the respect of distribution companies from any sector around the world. Yet for reasons steeped in history (“it’s always been this way”), or performance (response times), or cost (excessive scan fees, MIPS charges, and look-to-book fees), or simple convenience (easier for someone else to worry about it), many airlines freely give away control to third party distributors, GDSs, Metas, OTAs, PSSs, whereby these entities “re-manufacture” the airline’s pricing and inventory in ways that they (not the airline) see fit. For decades, airlines have essentially given away control over their brand and product. And this is precisely what has to change if airlines want to succeed in the world of dynamic retailing.

Here’s more good news: Believe it or not, airlines today can easily retain or regain control by simply in-sourcing and controlling pricing and inventory, and requiring any and all distribution partners come to the airline for this information. Now I say easy and simple, two words that seldom get tossed around our industry. But, a few things have changed that make airline control as defined above a reality.

First, there is real competition in airline pricing and availability providers. The GDS/PSS and ITA/Google are no longer the only games in town. Farelogix, for one, has made a significant investment in developing a highly scalable, performant, and cost effective airline pricing engine (FLX Shop & Price) and real-time availability engine (FLX Availability Calculator) capable of serving the “single source of truth” requirement for airline pricing and availability, and interoperability with our merchandising engine (FLX Merchandise). I’m sure others are also innovating in these areas as choices grow for airlines that are ready to take control.

Second, the cost of computing power has drastically reduced, and this enables airlines to up-end decades of legacy IT models. For example, the new Farelogix pricing and availability engines run on commodity hardware and can be easily managed, configured, and even hosted (cloud or physical) by any airline, accessible by any distribution partner, and with better response time than any cache or incumbent solution can offer. This eliminates the need to have expensive legacy PSS-based community pricing and availability systems, and makes the words “scan charges” or “look-to-book” sound about as relevant as “hey bring over your VCR and we can watch a movie”.

With technology no longer the barrier, the biggest challenge for airline executives now is to move quickly before someone else takes the opportunity away. We know that incumbent PSS/GDS providers will certainly do their best to contractually delay the inevitable shift to airline-controlled engines, and airlines need to address this. But it’s not just the PSS/GDS vying for airline control; I attended a recent CAPA conference in Dublin where Bobby Healy, CTO of Car Trawler, made an impassioned presentation about airlines losing control over their customers to the world’s most powerful search engine. He also has elaborated on this in writing, and I encourage you to have a read:

The clock is ticking. If airlines don’t find a way to regain control over their offers, there is a line of entities ready to take it from them.

To succeed in today’s hyper-connected customer environment, you must be the single source of truth, dynamically determining and delivering your best offer, in real time, through any channel.

What does this mean?

It means that you – and only you – must create your offers. You can’t outsource it to anyone. You create offers based on your knowledge of your products and services, knowledge of your customer, and strategic use of big data and predictive analytics.

Then, you deliver that offer to all the channels and points of contact with your traveler so your customer knows that no matter how they interact with you, it’s still the same relationship. They can rest assured that you will be consistent. In other words, you are the single source of truth.

If you don’t step up to this challenge, you will fail. If you delegate the creation of your offer to a middleman, your consumer relationship will be faulty and – you will fail. This is the competitive terrain we’re in now. It’s the world of the hyper-connected consumer. Consumers today are hyper-connected because they want to connect to the source – and that’s you.

The New Science

 Dynamically creating and controlling the offer is the new science of Airline Revenue Management. In a study published last year, Atmosphere Research Group reported that airline executives see that the impact of Dynamic Pricing and Predictive Analytics will drive the biggest change in their distribution strategies. There’s a reason why scientists at leading universities around the world are being recruited by airlines to help redefine how they create their offers.

This is the way our industry – at last – is transforming into the world of retailing. Without question, this is the single most transformative time since the Internet was created. It’s not going to be easy and we all know why.

In my next post, I will address the challenge that airlines face in becoming the single source of truth.

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.”


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, 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.


What’s the real story with Amadeus and its Fare Families?

On September 23, 2016, an article was published by Tnooz with the following headline:

“Amadeus admits fare families are not working for all its airlines”

That same day, the headline from the story was changed as follows:

 “Amadeus says fare families work well for some airlines but not all [UPDATED]”

So what is all this about? Why the different headlines? In my book, it’s called editorial influence and it is usually quite rare to update an article with a different title, but we’ll leave that for what it is.

The real story is not the change of headlines, or even that some (or all) of the airlines that invested in the Amadeus merchandising offering are not getting the results they expected. The real story, if you are an airline, is getting a better understanding of the technology tools available so you don’t make costly mistakes that will significantly limit your airline’s future when implementing one of the most revolutionizing aspects in ensuring Happy Customers, and More Revenue.

Is the Amadeus offering a true merchandising engine? Perhaps you should Ask the Question. In my view, it’s actually just a merchandising “program” that airlines sign up for and Amadeus, rather than the airline, sets up and determines how the airlines will participate. If my thinking is correct, then frankly, it’s no surprise that the results can be sub-optimal. Any attempt to utilize existing GDS and PSS systems and industry processes – that were never designed for anything close to airline merchandising – to implement an airline merchandising program is bound to be fraught with difficulties.

From the Farelogix point of view, our FLX Merchandise airline merchandising engine was created from scratch, and designed as a “built-for-purpose” technology solution for airline merchandising. It was created with input from the airlines so that it addressed their particular needs. Our technology solution is designed to be integrated into the airline’s actual technology stack servicing all distribution channels. This is a fundamentally different approach and yields fundamentally different results. Just ask our FLX Merchandise customers*.

We’ll spend some more time in the near future providing more details of the different approaches to building and delivering airline merchandising solutions. And, of course, we will continue to Ask the Question.


* Skift published the following headline…and only once:

United Generates More Ancillary Revenue Than Any Other Airline – Brian Sumers, Skift – Sep 21, 2016 6:30 am

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 »

Did you see it?  Last week there was a “leak” and The Beat got ahold of Sabre’s top secret plans for their future development around airline distribution, specifically as it relates to airline ancillary products and services.  You may remember a number of weeks ago Sabre filed comments with the Department of Transportation urging the Department to stop IATA’s NDC initiative.  A section of the Sabre filing contained information about Sabre’s future plans for airline distribution that would basically negate the need for NDC.  Unfortunately when the comment was first filed, Sabre redacted much of the information about their secret future plans.  Thus Sabre’s future development plans that would negate the need for a common airline connectivity XML messaging standard remained a secret… until last week.

We are now finally able to get a glimpse into the future vision of the great and all-powerful Sabre. Unveiled for all to see!  I couldn’t believe what I was reading…

Sabre’s first revealed “secret” was later this year it would activate its “next generation of present day seat maps,” enabling carriers to charge “varying fees for seats in the same cabin.”  OK, good idea as a number of airlines are already doing this on their web sites (and have been for some time), but hey, kudos for the attempt to catch up.  But is this a trade secret worth redacting?  I’m not so sure.  And lucky for Sabre, this technical capability is already being addressed in the IATA NDC schema and will have the desired effect of not only enabling airlines the ability to charge varying amounts for seats in the same cabin, but will also add the ability to dynamically adjust seat charges based on traveler status.  Might look something like this:


Another Sabre “secret” was that they were going to come up with standard display icons so travel agency users could more easily identify and compare airline services offered.  I can only assume Sabre’s intention is to invent service icons like these icons that have been used by a number of airlines and technology companies for about a decade and have been used in our SPRK travel agency product since its inception.  Again, kudos for keeping pace, but is it worthy of a trade secret redaction?

My view is if you got it, flaunt it!


447px-Western_Union_Office_between_1913_and_1917_2I don’t know if you’ve heard, but the last large telegraph system in the world will shut down next month. While telegrams served as a very useful, important, and efficient way of communication, they are now obsolete due to the technological innovations of the past thirty years.

So let’s raise a glass to telegrams and thank them for all their hard work. They did their job, and they did it well. And while we wish telegrams well in their retirement, let’s be thankful for innovation and the technological advancements that gave us things like the Internet, email, and, dare I say, texting. I am sure there are a few folks left that want telegrams to stick around because they are comfortable with them, or they have a business model built around them.  But we can’t hold on forever.  Because isn’t sending an email such a better way to do things?

See where I’m going with this…?

I must say, I’m quite astonished after reading a recent article by Charlie Leocha at Consumer Traveler. In “The New Airline Luddites,” Mr. Leocha is quite critical of the airlines and calls them, well, luddites. For those that don’t know the definition of “luddite” it is one who opposes technical or technological change.

Whoa. That’s a pretty hefty jab. I mean, airlines are pretty technologically advanced. After all, they do manage to get a 90-ton aircraft off the ground and keep it up in the sky (I still don’t get how that really works). So calling them luddites is, I think, quite false. Read the rest of this entry »