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

From February 8 – 9 in Hamburg, Germany, Farelogix will be onsite at the Hamburg Aviation Event. Our very own Jim Davidson is one of the event’s keynote speakers on February 8, 2017 from 10:10 AM – 10:30 AM, and will be focusing his presentation on the airline as “Single Source of Truth” and how dynamic, personalized offers are changing the airline industry. Jim will explore the changing anatomy of the airline offer as it moves far beyond traditional fares and ancillaries, and how the latest advancements in technology are changing what is possible in terms of dynamic, omni-channel customer engagement.

In addition to Jim’s keynote, there is a stellar lineup of other speakers and topics. Some of the hot topics that will be addressed include chatbots, mobile, customer segmentation, personalization, predictive analytics to optimize resources, as well as data and how to use it. And for all of us #AvGeeks in attendance, you’ll even have an opportunity to participate in a Virtual Reality Demo – Airspace by Airbus.

Come join Jim and the other fabulous speakers from Wizzair, Ryanair, Eurowings and more. It promises to be a fantastic two days where innovative ideas will be shared. You can find the full agenda online at http://www.hamburgaviationconference.com/agenda/, and the complete speakers list at http://www.hamburgaviationconference.com/speakers/.

Plus, if you haven’t yet signed up to attend, we have a deal for you! Using this discount code (2381) when you register, you will receive a discount of 30% off the current registration rate. We hope you will take advantage of this offer and that we see you there!

I am sure most everyone knows by now that just before the holidays a jury in the USAir v Sabre antitrust trial 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.

While the trial results will certainly take some time to play out in the market, one thing is for sure – airlines should be strategizing how they will use this anti-competitive determination to open up their market and distribution opportunities.  It is certainly going to be a once-in-a-long-lifetime of GDS contract provisions negotiation opportunity.

From my point of view, the trial was quite interesting on multiple fronts. So I thought I would share some observations regarding my first opportunity to testify in a jury trial.

As a non-expert witness, I could not actually attend any of the trial proceedings until after I testified. So my first glimpse into the trial was when I was escorted in through a back door and seated directly in the witness box, snuggled in nicely between the judge and the jurors.  No introductions, no handshakes, and no exchanging of pleasantries before getting down to business. In other words, this was not a business meeting that so many of us are accustomed to.  I was immediately sworn in, and then it was off to the races – pausing only momentarily for a sip of water or to look up a line or two from four large bound books (literally over 1,000 pages) of my previous multiple-year-old depositions. (In case you aren’t aware, I had three previous depositions as the Sabre lawyer attempted to, what is called in the legal business, “impeach me.” Yikes!)

A couple of observations:

  • Being a juror is hard work.  This was a very complex case and from what I could tell, the jurors were extremely engaged, attentive, and taking lots of notes.  At the end of my testimony (and that of others who were called to the witness box) the jurors were allowed to submit follow-up questions to the judge. After I testified, the lawyers and judge disappeared for a while,  after which the judge returned to  ask me five or six questions submitted by the jurors.  The questions were relevant, intelligent, and demonstrated the grasp that the jurors had on this case.  Quite amazing.
  • Look at who did and did not show up. An open court room doesn’t necessarily mean people actually show up to watch. I found this quite interesting. Here we were, at a trial that had significant impact on pretty much every airline in the world that is not happy with their GDS full content, parity provision, surcharge and direct connect prohibitions. Yet, not a single airline representative (other than AA) in the house.  What gives?  Lack of interest?  Didn’t know the trial was happening?  Figured you would read the transcripts?  Anyway, I thought this was quite interesting.

There was however one person that seemed intent on grasping all there was to grasp throughout the long weeks of trial – a GDS lawyer. Wonder what his motivation was?

Guess you’ll just have to Ask the Question!

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!