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Issue 01: Tuesday 29 October 2019
Airlines.
2nd Airline Industry Retailing (AIR) Symposium
SPONSORED BY
October 29 - October 31, 2019 | Bangkok, Thailand
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Welcome to Bangkok
ISSUE 01
Welcome to the second Airline Industry Retailing (AIR) Symposium! No other global event represents the will of the airline industry to transform, digitize and modernize itself more than the AIR Symposium. This second edition will showcase our collective commitment to evolving legacy distribution and payment processes into a digital retailing environment. The business case is clear: Consumers expect to shop for air travel with the same convenience and experience they enjoy with other online experiences. And
airlines want to escape the commodity trap to become true retailers. We know there’s a gap and we are working to close it, with initiatives like NDC and ONE Order. The AIR Symposium provides a unique opportunity to bring the air travel value chain together to discuss and debate how to achieve this vision. Over the next three days, sessions will dig deep into the spectrum of subjects around the transformation of “shop-order-pay.” The AIR Symposium will also feature a dedicated exhibit area for tech start-ups and accelerator programs that are in the
Aleks Popovich
vanguard of fresh thinking around enabling retail, including ventures from leading airline companies, such as IAG, easyJet, El Al and JetBlue. In addition, seven start-ups from the Accelerate@IATA program’s first batch, and the top three start-ups selected from this year’s IATA hackathons, will be present. Enjoy the event!
Aleks Popovich, IATA Senior Vice President, Financial and Distribution Services airlines.iata.org
Issue 01: Tuesday 29 October 2019
More Control and Less Waiting – through Legal Tech and Automation 2
For over a decade more and more passenger liability regimes have come into existence on a global scale. Even though some jurisdictions are currently debating a revision of those rules, the level of consumer protection is unlikely to fall below the present standards. In light of the International Air Transport Association (IATA) predicting a doubling of passenger demand until 2038 and Eurocontrol forecasting an increase of two hour delays by a factor of seven until 2040, it seems inevitable that the already very high volume of claims will continue to go up. Therefore, the question arises how the airline industry can cope with the sheer number of passenger claims and complaints, how to tackle the claim-farming industry and meet customer expectation at the same time. As it is fair to say for other areas of the customers’ journey, the adequate response is through digitization and automation—and when it comes to passenger claims in particular through legal technology. airlines.iata.org
According to IATA’s 2019 Global Passenger Survey, passengers desire more control over their journey through technology and believe that this will improve their travel experience. What IATA did not ask is whether passengers feel the same way, when it comes to irregularities and filing a claim for compensation. My guess would be that passengers expect the same level of control and a seamless customer journey that should also include the claim management. There is a clear indication that airlines are automating their claims handling processes—but they need to reduce cost significantly in order to pass the benefits on to the passenger without eroding their margins over operating costs. It is a matter of how best to disrupt the claim agency business, enhancing passengers’ user experience and satisfaction, offering a seamless digital customer journey and regaining loyalty whilst increasing sales through smart payout solutions. If you would like to know more, let us speak during the conference.
Ulrich Steppler CEO – CHS Claims Handling Solutions GmbH
Tuesday 29 October 2019: Issue 01
“As an industry we have a responsiblilty to ensure that we continue to deliver the enormous economic and social benefits of aviation, while addressing our environmental challenges” Eric Leopold, Director Transformation, Financial and Distribution Services, IATA
A strategy for innovation
“As the world becomes wealthier, more people want to take advantage of the opportunities that air travel offers,” explains Eric Leopold, IATA’s Director Transformation, Financial and Distribution Services. “As an industry we have a responsibility to ensure that we continue to deliver the enormous economic and social benefits of aviation, while addressing our environmental challenges.” The passenger experience, where every customer expects to be treated individually, is another challenge in the face of more people traveling in all regions, with diverse expectations. IATA’s strategy is designed to overcome these challenges by 2035. One priority is airline product differentiation, enabling customers to access airline products across all distribution channels. Product differentiation is based on several elements such as choice of products, personalization of offers, enabling seamless payment, enabling the efficient fulfilment of the
The strategy will mean engaging various functions of the airline, and all the partners in aviation’s value chain
orders, supporting an interconnected journey, and a customer-centric experience. Initiatives such as New Distribution Capability (NDC), ONE Order, and Dynamic Offers will facilitate this. The evolution of consumer trends and technologies informed the strategy. Mobile phones have replaced computers as the most popular interface for searching and shopping for travel, for example, with voice and biometrics set to support the interfaces of the future. Connectivity, meanwhile, must reach every element of the journey, even baggage. The strategy has been articulated and tested in the new Advisory Councils of IATA, comprising senior airline leaders with commercial, financial, and digital responsibilities. It is promoted in public forums and events, like AIRS, and constantly reviewed with airlines and strategic partners, including digital players. Implementing the strategy will mean engaging various functions of the airline, from sales and distribution to finance and IT, and all the partners in the value chain, from travel agents to corporate buyers. IATA’s aim is to ensure all players have a plan in place to implement the changes. Leopold accepts there is a theoretical tension between standardization and innovation. If the industry creates a new standard, it could arguably bring uniformity and limit innovation. “The reality is different,” Leopold says. “What we standardized is the underlying infrastructure, the equivalent of Internet protocols. The standards enable a new playing field, where innovation takes place at value creation level, the equivalent of Internet services built on Internet protocols. Consumers will benefit from an enhanced competitive environment, where more differentiated products are available.” airlines.iata.org
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Issue 01: Tuesday 29 October 2019
$60bn
Based on industry-wide passenger revenue estimates, interline revenue is valued at almost $60 billion annually
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The future of interline Interline is a broad term used to describe one airline selling an itinerary or services to a customer that will be provided by another airline or company. It is estimated that more than 8% of passenger segments flown by IATA member airlines are sold as interline. Based on industry-wide passenger revenue estimates, this values interline revenue at close to $60 billion annually. But having originated in an era before deregulation and digitization, interlining is unnecessarily complex. An IATA whitepaper, The Future of Interline, details the vision for the future of the process. “The whitepaper draws together themes that have emerged in many recent industry discussions,” says Henry Coles, IATA’s Head, Airline Distribution Standards. “It summarizes the future direction for interline that will be overseen by the Distribution Advisory Council, and the standards development
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activities that will occur by member airlines under the Passenger Standards Conference.” Incorporating advances in distribution and fulfillment (shop/order/pay) that are being made possible through the New Distribution Capability (NDC) and ONE Order standards, the new framework will provide opportunities to improve the customer experience through greater transparency and real-time data at all touchpoints. It also gives airlines more commercial control and improved flexibility. As with many transformation programs, the challenge essentially revolves around scale, but Coles insists there are many ways to start small, such as ancillary products. Though the initiative is airline driven for now, clearly wider involvement will be necessary in due course and the customer transparency obtained will in any case interest stakeholders across the aviation value chain.
Tuesday 29 October 2019: Issue 01
Visit the Startup Sphere! Aviation and innovation are synonymous. IATA has been an advocate of startups, organizing Hackathons since 2015, collaborating through the AIR Think Tank, presenting innovation awards, and holding multiple incubation programs for earlystage startup ideas. At AIRS, a Startup Sphere in the exhibition area is celebrating the latest concepts for the digital transformation of the industry. “To build on the momentum of the launch of our new startup accelerator, Accelerate@IATA, we wanted to bring the best in class startups and venture capital companies together in one space to show the impact that innovation is having,” says Kat Morse, IATA’s Project Manager, Innovation, Financial and Distribution Services. The Startup Sphere covers one-third of the total exhibition space. In addition to the startup area,
there is an Innovation Lounge to relax and meet the startups on a more informal basis, and the Startup Stage Pitching Theatre, where the startups have five minutes to pitch their solution during coffee breaks. During lunch breaks, there are 20-minute panels with multiple startups discussing the themes of the plenary sessions. In total, more than 15 startups are exhibiting in the Startup Sphere. There are four airline industry accelerators/venture teams joining, each bringing along one or two of their startups. There are also three IATA Hackathon winners and seven startups from Accelerate@IATA. “I’m hoping we can show the AIRS participants something new they haven’t seen before, perhaps a solution they can implement or try in their companies, or even help them get the spark of a brilliant idea that can change their company, or even the industry as a whole,” adds Morse.
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GTEC prepares for airline retailing The Global Travel Management Executive Council (GTEC) connects senior-level executives from the travel management company (TMC) community with IATA. It comprises 15 of the world’s largest and most influential TMCs. Group objectives include providing counsel to IATA and shaping industry programs, with Bangkok representing the second 2019 gathering of the biannual meeting. The most recent level of NDC
certification, “NDC@Scale” had a strong GTEC involvement. Achieving the certification level demonstrates that airlines and their partners have a minimum set of recognized capabilities to increase NDC transactions. Through the GTEC engagement, IATA added a special recognition for “Business Travel Ready” airlines. These carriers meet some specific needs of the business travel community and are better aligned and ready to scale up NDC transactions
with their business travel partners. GTEC’s future importance is likely to be substantial. Previously, IATA´s engagement with corporate travel was mostly limited to Billing and Settlement Plan (BSP) matters. But several IATA projects, including NDC and One Order, will impact corporate travel as the industry builds toward airline retailing. In Bangkok, the GTEC is looking at IATA’s industry priorities and different distribution and payment programs. airlines.iata.org
Issue 01: Tuesday 29 October 2019
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