May 2022 Newsletter
Full Airline Retailing
In our March edition of our newsletter, we talked about NDC for merchandizing and our involvement in enhancing NDC into a full airline retailing standard.
In the current airline retailing-world the primary focus is on flights and services related to flights. Anything is, more or less, not covered in the NDC standard. We agree that the priority for airlines is on selling flights and ancillaries. However, in our opinion, what and how we sell should be a business decision rather than a technology restriction.
Airlines selling t-shirts or other products they merchandize in-flight or at airports? Not supported. Airlines keeping inventory and product information for third-party suppliers or bundling a t-shirt with a flight – e.g. child fare includes a fancy polo-shirt? Not supported. Well, yes, we could create a special service code (TSBM –t-shirt, black, size M) for merchandizing products and then sell these as ancillaries to a flight. Doesn’t sound flexible and open, right?
Unfortunately, with the existing standards and new platforms that are built to support these standards, we restrict technology and as a result, limit possible business ideas and as such airline revenue.
Nowadays, when airlines sell non-air products on their websites, they usually do that by using and integrating another platform, or by linking (APIs or white-label) to third-party providers – without the possibility of proper bundling, packaging, upselling, revenue optimization and personalization.
Welcome to the world of Super Apps! Large airlines, with own IT departments, are developing Super Apps, to solve some of the issues. Such Super Apps can work when the actual integration happens at the backend. However, to us, that sounds like a very complex and expensive work-around to cover system limitations.
Besides that, what about the hundreds of smaller and medium-sized airlines? Shouldn’t open platforms and industry standards be limited to allow big players to do it, but leave the smaller airlines out of the game? Was, or is that the idea of keeping complexity and limiting standards so only a few chosen ones can really benefit from such standards?
At TIK Systems, we strongly believe that airlines need full airline retailing, similar to Amazon, Lazada or Shopee, with full backward compatibility to the existing distribution models. However, airlines are holding back of making the bold steps required due to system limitations, implementation and operating cost, expected complexity of the unknown, risks and lack of experience.
However, what if …
- a flight is a product, an airline a provider and a flight number a product number?
- a ONEOrder can store and re-generate TTY PNRs?
- we can use NDC to sell t-shirts, hotel rooms and insurances?
- we can optimize revenue, offers and personalization across all the products and not just flights?
- we can dynamically bundle any type of products?
- we can implement and operate single system for all these?
- an Order Management System does not need a PSS to support backward compatibility?
These are some of the questions we have tried to answer and are trying to solve under the oops umbrella. As part of the oops.solution portfolio we are working on the ‘dream-come-true’. At the core is an open data-model that supports any type of products and allows a rather flexible definition of specific product types and variations using attributes (dimensions). We even looked at abstracting the airline world. There are no flights, but products, there are no airlines, but providers, there are no boarding classes, but service categories, there are no booking classes, but sales buckets. We use the term “transport” for product types that move people from A to B. We have no passengers, but individuals, because an individual can also be a guest when the order includes a hotel, or the driver, when the order includes a rental car, etc.
We have built a pricing engine, initially for merchandizing, so we’re not keeping fares, but dimensions such as prices, taxes, discounts, surcharges, etc.
Needless to say, this is all new to us and a challenging learning experience. But it is also great fun to being involved in such a project and around great people like the three teams we have in Bangkok, Chiang Mai and Belgrade.
We are still learning, and every day is full of surprises. I hope that the result of all our hard work and commitment will be a nice surprise to potential customers as well. One of them is our sister company Mobipax which uses the product management, pricing engine and order management for sales-on-board and pre-sales of merchandizing products through their two dedicated apps for crew and passengers.
If anyone is interested, we are open to share our experiences and knowledge gained during the last couple of months. Let us know!
Sales & Marketing Manager