I realize many of us in the airline industry feel like we are in combat mode, and frankly, I believe we are in many ways. I don’t need to tell you that we are battling something that most of us have never even dreamed about, and that it’s threatening our very future. But here we are, getting up every morning, putting on our game face, and doing our best as we face our new world.
As I talk to airlines who are in the trenches, I think back to grad school, Maslow, and his hierarchy of needs. Their immediate focus has changed from rising to the heights of retailing to generate additional revenue to the basics needed to keep the lights on. For most airlines, that means retaining cash and securing a financial lifeline.
Despite the problems of today, we can’t forget that tomorrow will show up. This is a time to prepare. Long term survival will depend on the decisions airlines make now about how they will operate, compete, and ultimately thrive in an uncertain environment. The drive to become retailers and adopt direct (NDC) distribution will play a key role. Prior to the pandemic, it began fueling the transformation airlines needed, and will continue providing critical agility to help airlines overcome the many challenges they face today.
I recently read an op-ed by Cornerstone’s Matt Oreggo that suggested success in this time means “pivot or perish.” I have to agree that phrase about sums it up. The degree to which airlines and their tech executives can elegantly adapt to changing commercial realities, travel volumes, customer needs, government regulations, health risks, and financial pictures will determine who wins this battle. Although every airline will tackle these challenges differently, we will see winners and losers based on who can best plan and equip themselves for an unpredictable tomorrow.
For our customers, I can tell you the fighting spirit is very much alive and well. Every day, I see inspiring examples of airline ingenuity and Farelogix technical agility. I have even spotted a couple of trends that I thought I would share in this post, along with some additional insights. I have framed these around a model we’ve been kicking around – what we refer to as the ‘5Rs’. So, here it goes:
Relief – This is about overcoming the immediate problems faced by airlines amid the COVID crisis. One of the biggest, most urgent challenges faced by airlines remains the servicing pressures placed on call centers. When our customers came looking for help, I am proud to say that Farelogix worked alongside them to quickly improve servicing functionality using our NDC and offer engine technology to provide a measure of relief. It felt great to play at least a small part in their efforts in this regard. Our Director of Product Marketing Management, Nancy Delgado, has taken pen to paper and will share some more detail in a later post.
Rehearse – I was quite surprised (and delighted) by this! Multiple airlines have approached us to begin, or to continue, Proof of Concepts and roll out live deployments. These folks are taking advantage of low transactions, low flight volumes, and under-used Revenue Management and Pricing experts, to try out new strategies and solutions (such as dynamic and continuous pricing) that will give them a future edge.
Recover – Some people are still flying for multiple reasons, and once government restrictions ease, it is reasonable to assume that more will take to the skies. Maybe the first cohorts will be people flying for essential family reasons or to enjoy domestic holidays after months of lockdown. There will likely also be professionals traveling to attend to business imperatives. We are working with our customers to make the most of a bumpy recovery. One example is flexible onboard social distancing, that Michael Zumdieck has already written about on this blog. This enables airlines to make their customers feel safer in the skies while making the most of available seat inventory.
Reset – A situation that is reset to zero is a time of opportunity. Those airlines planning for tomorrow must achieve new levels of flexibility across the enterprise to “pivot or perish” (thanks again, Matt)! For many, this translates to airlines gaining more control over their technology stack, employing more automation to quickly adapt to new conditions, modernizing commercial agreements with PSS and other providers, re-evaluating build vs buy decisions, and perhaps, taking a fresh look at how distribution evolves in the post-pandemic age. Collectively, we will need to call out industry-wide possibilities for long-lasting, positive change, and work on redesigning the future. This is a topic close to our Director APAC, Mark McDonald. He will share his views in the coming days.
Retail – I have no doubt that we will once again see ourselves looking to the top of Maslow’s model, as airlines embrace all that retailing has to offer. We will need a laser focus on revenue gains, airline-controlled offers, and cost reduction to make the most of a new world order. Those of our customers who can, are continuing with their retailing projects with us, with leadership teams considering these projects strategic to long term success.
Sure, I am disappointed that the deal to merge with Sabre fell through. But I have never been more confident about our future than I am today. It may seem cliché, but we view our customers as part of our extended FLX Family. I am proud of our customers’ grit and achievement in this time of upheaval. And, we will never take their support for granted. I am also incredibly proud of what the Farelogix team is doing to support them. Relationships, innovation, and flexibility around the 5Rs will secure our mutual success.
It’s game on, folks!
Keep an eye out on the Farelogix blog, for more stories and insights on the ‘5Rs.’