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

Posts Tagged ‘Personalization’

More airline revenue happier customers


“The offer is the airline’s biggest asset.” ~Jim Davidson, CEO, Farelogix.

Traditionally, airlines create products at static price points in the PSS, and then distribute them through different channels via the PSS/GDS. A couple of years ago, IATA got airlines thinking differently when it introduced New Distribution Capability (NDC) and the concept of the ‘offer’. With NDC, when an airline receives a ‘request’ from a customer, it responds by dynamically creating and pricing a personalized ‘offer’ made up of flights and ancillary products. It then presents the ‘offer’ to the customer. Initially NDC framed the ‘request’ and ‘offer’ as coming via the travel agent or Travel Management Company (TMC) channel.

We now we think of the ‘request’ in broader terms. The ‘request’ can come through any channel or touchpoint. It can also be explicit (e.g. a request through the agent or an online search) or implicit (i.e. figured out from various data inputs). The airline then dynamically creates a personalized offer that meets the customer’s need and the commercial imperatives of the airline.

What information do airlines use to help them make the right offer? Check out the image below for some examples:

Data that controls the airline offer

Source: Jim Davidson, Farelogix Pre-Conference Workshop, Aviation Festival 2017.

Still wondering why the offer is important? It boils down to two things – more revenue for the airline and happier customers. The better the airline gets at predicting what a customer needs (and wants), the easier it will be to satisfy more of that need, and earn more money in the process. Another bonus is that the airline will be able to better manage its product inventory.

Dynamic Pricing

“Dynamic Pricing will require the ability to conceivably create and publish endless prices/offers in a frictionless manner tailored to a customer of one.” ~Henry H. Harteveldt, Atmosphere Research.

By applying the science of Dynamic Pricing to enabling technology the airline can price the offer on-the-fly. Here are a few ways to do this:

  • Modify ATPCO fares: Begin with the base price and apply a discount based on variables such as load factor.
  • Build from Market Price or Bid Price: Begin with the Market Price from the Revenue Management (RM) system and apply a mark-up based on factors like carrying cost, load factor, and channel.
  • Build Personalized Bundles: Begin with Market Price and add value to the fare with ancillaries that the customer will find compelling, like premium seat, priority boarding, and first bag free.
  • React to Market Changes: Adjust a base price depending on unusual search and/or booking data.
React to unusual flight search volumes

Source: Jim Davidson, Farelogix Pre-Conference Workshop, Aviation Festival 2017.

Single Source of Truth

In today’s hyper-connected world, customer relationships are key to establishing loyalty and trust. It’s important that an offer be consistent whether the customer is talking to an agent, on a meta-search site, visiting, or even asking Amazon Alexa.

To ensure this happens, the airline must create and control the offer, and become the ‘single source of truth’ – another concept at the heart of NDC. That way, the customer can trust that the fare they are offered is the best value for them, regardless of channel.

“Multiple searches can result in a $12 difference in the offer. Becoming the Single Source of Truth solves this problem.” ~Jim Davidson, CEO, Farelogix.

How Do We Get There?

Legacy technology and processes are the biggest obstacle to airline offer creation and control. This is because 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.

With modern technology for airline commerce, it’s now possible for the airline to move offer creation away from the PSS/GDS and gain control of all aspects of the offer, including scheduling, availability, pricing, and merchandising. With airlines in control, Revenue Managers will be empowered to create offers based on market and bid price, be able to expand product availability to stages further in the customer journey, and dynamically adjust the offer based on data inputs. In short, Revenue Management will become a hot-bed of innovation.

This is the route to happier customers and more revenue.

Want To Learn More About This Technology?

Farelogix Airline Commerce Gateway powers airline-controlled distribution, shopping, pricing, merchandising, and retailing across channels. Our technology is used by some of the world’s biggest airlines like American Airlines, Delta, Emirates, Lufthansa, United and many more. For more information, arrange a quick consultation with a member of our commercial team by emailing

FLX-M Use Case Challenge

For those of us in the northern hemisphere, spring is here! The temperature is warming, and the snow is finally melting. It was a great winter if you love skiing and sledding, but it was quite miserable for airlines trying to run on schedule. The delays and cancellations added up quickly, leaving passengers frustrated and airlines stretched to accommodate everyone. And while the good news is that the weather is getting better, there will still be storms, equipment troubles, and a myriad reasons why flights get delayed and canceled.

As an airline there’s often nothing you can do about such troubles, but your customers usually don’t see it that way. You can however make the rebooking and re-accommodation process as simple and pain-free as possible. This is exactly where FLX Merchandise can help.

Today, most airlines send emails and/or text messages to impacted travelers and those messages are usually limited to two choices for the travelers: 1) go with the auto-rebook on another flight (chosen by default by the airline), or 2) please call customer service.

But with the power of FLX Merchandise and personalization, a “Recovery Package” can be offered to the traveler that can turn a negative, frustrating situation into a positive experience with the airline—and we all know how word-of-mouth can impact customers’ feelings towards an airline. Read the rest of this entry »

An effective airline merchandising program showcases your brand, delights your customers, and grows both revenue and loyalty.  But effective airline merchandising is not easy to accomplish.  Embracing value-added services, personalization, and New Distribution Capability (NDC) requires innovation on many levels, from strategy to technology.


We invite you to attend a one-of-a-kind master class, dedicated to exploring what it takes to successfully grow happy customers and more revenue through effective merchandising and value-added services.

At Merchandising and NDC: The Path to Happy Customers and More Revenue, we will tackle the full, end-to-end process of merchandising and personalization, including how to differentiate your product and brand, creating and optimizing the best offer, leveraging NDC, and understanding what technologies can help your airline stand apart while increasing revenue per passenger. Read the rest of this entry »

In less than a month, Farelogix will be not only attending Airline Information’s Mega Event 2013 in beautiful Vancouver, but we will also be hosting an NDC in Action workshop the day prior to the Mega Event. This complimentary workshop will include speakers from LEK Consulting, IATA, Air Canada, ATPCO, Farelogix, and more, and touch on such topics as:

•   Deliver all your products and services, including ancillaries, through all your distribution channels.
•   Personalize your product offer based on traveler authentication.
•   Dynamically manage your own pricing.
•   Integrate merchandising, fare bundles and a-la-carte retail offers across channels.
•   Use mobile to engage with customers for contextual offers and real-time customer recovery and accommodation.

We encourage you to attend the Mega Event and register now for the NDC in Action workshop, as we will discuss how merchandising, retailing, and revenue are all being transformed by NDC and look at the technology behind bringing NDC to life.

See you in Vancouver!

We’re happy to premiere a new video with a very simple, age-old concept: More Revenue Happy Customer. The concept is nothing new, but when it comes to airline distribution, sometimes it’s a concept we’ve struggled finding the right balance for.

Without further ado… Enjoy!


View the video on YouTube.

TakeTravelForward recently posted an article on airline distribution and how it is time the industry shift to a consumer-centric marketplace as opposed to one where an intermediary controls the product offers to airline travelers. They also produced a series of videos on the same subject. We thought it was worth reposting on our blog in case you missed it. Enjoy!


Today, airlines are competing for consumers in ways never imagined just a few years ago. For decades much of the airline industry had been relegated to a commoditized offer of an available fare and schedule. In fact, the inability of airlines to differentiate their product offerings led to what many viewed as a “race to the bottom” in terms of innovation, service, and the entire experience from “buy to fly.”

But why did this happen? Did the airlines really want to give consumers a bad experience? Of course not. They simply could not maintain profitability in an era of rising fuel prices and a mass commoditization of their product.

The turmoil in the industry today reflects that the pendulum is now swinging back, as airlines strive to offer consumers new and better travel experiences that are unique to the airline. But the shift is not so easy, and there is friction across the industry. While airlines are willing to share any information necessary to deliver customized offers to travelers, friction is inevitable as airlines try to achieve these changes against a backdrop of an entrenched business model that may serve the dominant industry intermediary (the GDSs) well but has left consumers as a mere afterthought.

Today’s consumers are unique and different, and so are their trips—vacations, business trips, weddings, and more. Consumers want to be treated special, rewarded for loyalty, given options and choice, and know they’re getting the best deal.

The Internet has given us the power to search and comparison shop for the best deal, and the notion of “one-size-fits-all” has been replaced with “Real-time, Transparent and Personalized.” Consumers enjoy and expect these benefits in today’s transparent retail world, and it should be no different when they search for and purchase air travel. Now is the time for the travel distribution industry to join in.

Episode 1: Do You Really Know What Happens When You Shop For An Airline Ticket?

Read the rest of this entry »

This is not a question. It’s a statement of reality. The concept of personalization exists in our daily lives because we, as consumers, demand it and will continue to demand even more of it. Why? Because it creates a better customer experience whether we are buying books, a car, or travel. In the travel space (with the notable exception of the airlines), personalization has been with us for years—well before the Internet.

© moneymaker11 -

Way back when, we used to order up a hotel room by contacting the hotel reservations center using an analog voice transmitter (a phone, I think it’s called), and we experienced personalization. We entered into an analog dialogue and were offered choices: a king bed or two queens, smoking or non-smoking, breakfast included or not. Not necessarily the most efficient process, but there it was—personalization, plain and simple. The Internet hasn’t given us personalization; it’s just made it cooler, easier, and much more sophisticated. Hold on to your hats, but thanks to robust databases, user profiles, and CRM, we have evolved into the era of the digital dialogue between buyer and seller. We now get to see the 360 poolside room view before we buy and we are electronically offered a variety of packages and services based who we are, what we want, and dynamic product availability. Read the rest of this entry »

I attended the Innovation in Airline Distribution 2012 Conference right here in my home city of Miami. The conference organizers did an admirable job of pulling together a nice balance of the provocative and the educational. I, of course, was part of the educational track.

As this conference focused on airline business, there was much attention paid to airline merchandising, optional services, and distribution. There was also plenty of discussion about personalizing offers to customers, listening to the customer, anticipating the needs of the customer, and ultimately giving the customer a relevant offer. I was quite impressed with the quality of the discussion.

It was, however, a bit surprising that most of the discussion seemed to be focused on what airlines were doing and wanted to do on their websites. When the discussion turned to getting their products to travel agencies the atmosphere turned, well, less enthusiastic. Why?

© olly -

Read the rest of this entry »

Rearden Aims to Limit Choice.” Whoa. When I read that Beat headline, it sounded like a bad thing. Don’t take away my choice! But it’s kind of like saying Amazon limits choice because it offers me recommendations when I log in. This “limited choice” is actually just personalization, which I think is a very good thing!

The only shock is that it’s taken the travel industry so long to come around. What Rearden has done is innovative and efficient. If I only stay at hotels with swimming pools, this tool will only return hotels with pools in the search results. No need to return results of hotels I’ll never stay at!

The amount of time saved is beneficial enough, but then add on the level of personalization provided and Rearden is really on to something.

So technically, yes, it limits the total number of choices, but the choices it’s eliminating are ones I don’t want anyway because this tool knows what I like! Relevant search… Brilliant!