| Welcome to the Q2 2024 edition of the Hub - your source of updates on IATA's Airline Retailing and Distribution initiatives. |
Welcome to the Q2 2024 edition!
Did you miss the previous edition? Catch up here >>
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Business Case and Decision Drivers:
Learnings from the Leaders
Modern Airline Retailing (MAR) was highlighted as one of the major IATA transformational initiatives aimed at modernizing business practices within the airline industry in Willie Walsh's report on the air transport industry at the 80th IATA AGM in Dubai last month.
As with any big undertaking, modern retailing needs C-suite buy-in and a business case. Both needs are supported by the IATA Airline Retailing Consortium’s latest thought leadership paper: “Business Case and Decision Drivers: Learnings from the Leaders”, which was released in June and builds on the 2023 MAR Business Case.
The new release enriches the 2023 paper by further emphasizing the importance of a compelling business case that addresses both financial and non-financial benefits. It highlights the need for a clear, concise message to engage top management, including the CEO and the Board of Directors, and stresses the importance of aligning the transformation with the airline's commercial strategy and technology needs.
Key takeaways include:
- The recognition that, while each airline's business case is unique, there are common patterns in the transformation process.
- Airlines should consider the end-to-end transformation from the outset and plan for a phased approach with tangible benefits at each stage.
- Legal and contractual considerations are important. Airlines should engage legal teams early to navigate existing contracts and industry regulations.
- A cross-functional approach to implementation is critical, as well as the need to review the organizational structure to support the change.
and more.
Download the full paper which includes examples of airline announcements and a business case pitch, for consideration, that summarizes the key points and potential value creation from the transformation.
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IATA Annual Review 2024
The review provides a 360-degrees overview of our industry's performance, as well as views on the way forward, in key areas encompassing: Economics & Financial Performance, Environment & Sustainability, Safety, Passenger Experience, and more.
Also, the annual review highlights the industry's progress in transitioning to 100% Offers and Orders, including the benefits it brings to both airlines and passengers.
Explore the contents and do not miss the section on Modern Airline Retailing – pages: 54-56.
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Offers and Orders Forum 2024 - takeaways
The third annual edition of the IATA Offers and Orders Forum took place in Geneva from May 21-22, 2024, bringing together some 130 participants.
Aligned with the industry vision for a world of Offers and Orders, the Forum provides a platform for airlines and their IT providers with notable advancements on the journey to Offers and Orders, to align in their transition and explore viable pathways forward, away from legacy artifacts, systems, and processes.
A lot was covered over span of two days. Highlights include:
- Transformation is happening: the sentiment among participants was notably optimistic, with a growing momentum amongst participating airlines towards the implementation of legacy-free Offers and Orders. The majority of surveyed participants positioned their readiness at a Business Case and RFI/RFP stage.
- The momentum of airline transition is robust and accelerating: two years from now, three airline groups expect to be processing their first orders, thus setting a benchmark for the industry.
- There is a strong commitment from the IT providers: participating IT providers displayed strong commitment to supporting airlines through this transition. Airline participants expressed a positive level of confidence in the investments being made by IT providers and their readiness and capability to deliver the solutions to meet the evolving needs of the value chain in the new context of retailing with Offers and Orders.
- The collaboration between airlines and IT partners grows as the transition accelerates: there is a consensus that a collaborative effort between airlines and their partners is crucial for the success of this transformation. A strong emphasis was placed on delivering modular applications that can seamlessly integrate with airline systems, providing the flexibility needed to move away from legacy constraints and enhancing competition.
If you wish to gain more granular insights into the technology providers' readiness and the airline IT transition pathways to Offers and Orders, download the Airline Retailing Consortium's 2023 study.
For more information about the Offers and Orders Forum and the participation modalities for airlines and IT providers, do not hesitate to contact us.
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Finance, the quiet force behind the scenes in the airline retailing transformation
In the last edition of the Hub, we discussed the critical role of Payment as a powerful lever for enhanced value creation in retailing.
The following month - and with the valuable support of payment and distribution experts from Air Canada, Lufthansa Group and McKinsey - we took a step further with a webinar, exploring how by incorporating payment in their retailing strategy, airlines can unlock additional value creation from their retailing by 2030.
In this context, it is only natural to expand this reflection to Finance - the backbone, seamlessly connecting airline Payment, Fulfillment, and Settlement processes in Modern Airline Retailing.
Here is why it matters:
- Finance acts as the bridge between payment transactions and overall business operations: it contributes to a cohesive network capable of supporting the entire customer journey - from Offer creation to Order delivery.
- It streamlines financial processes, allowing airlines to deliver their products seamlessly across channels: whether a customer books through a website, travel agent, or a mobile app, Finance ensures consistency.
- At a Business Case level, Finance's early involvement is also a strategic imperative: if involved from the outset, in collaboration with Distribution and other departments, it can ensure that financial aspects and requirements are captured accurately, and financial processes support the effective and sustainable implementation of Offers and Orders.
In conclusion, transitioning to modern retailing isn't solely the responsibility of the Distribution function. Finance contributes to optimizing revenue collection, costs minimization, and enhanced efficiency. While its impact on the transition may not always be immediately visible, the function's active involvement ensures that Offers and Orders will flow seamlessly, benefiting both airlines and customers. By recognizing Finance's critical role, airlines can unlock additional value creation and thrive in the dynamic retail landscape of the future.
Learn more about Finance's views and approach to the transition to Modern Airline Retailing, first hand from the Emirates Group CFO, Michael Doersam.
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ARM index recognitions update
The Airline Retailing Maturity (ARM) index registry is your single source to find industry players recognized for capabilities enabled by the IATA Enhanced and Simplified Distribution (EASD) standards.
Organizations having joined the ARM registry since our last update include:
InterparkTriple
On 10 April 2024, InterparkTriple was granted “Airline Retailing Maturity” status as a System Provider for its airline retailing-based solution, under ARM index Program. This designation recognizes that the airline retailing-based solution supports deployments using Shop/Order capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 17.2 and the ARM index Capabilities Verification Guidance.
Shanghai Airoc Information Technology Co.,Ltd
On 21 May 2024, Shanghai Airoc Information Technology Co.,Ltd was granted “Airline Retailing Maturity” status as a System Provider for its airline retailing-based solution iScream ABC, under ARM index Program. This designation recognizes that the iScream ABC supports deployments using Shop/Order capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 21.3 and the ARM index Capabilities Verification Guidance.
Explore the full registry >>
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Planning ahead: WFS-WPS 2024 takes off to vibrant Bangkok!
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Modern Airline Retailing on IATA TV
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Airline Retailing at Finnair
Follow Finnair's transition to modern retailing through this compelling overview and status update by Rogier Van Enk - the airline's Senior Vice President Customer Engagement.
Watch now >>
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Payment: a value creation lever in Modern Airline Retailing
The webinar connects the dots between modern retailing and payment, and explores how by incorporating payment in their retailing strategy, airlines can unlock additional value creation.
Watch now >>
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Airline Retailing at Emirates
Get a real-world example of what an airline’s journey to modern retailing entails through Amit Khandelwal's -Emirates' DVP Inventory, Revenue Steering & Distribution - insightful summary of their journey to date.
Watch now >>
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Financial Management Reference Architecture for Offers & Orders
Discover how the Business Reference Architecture framework became the backbone of the current guidance on airline Financial Management in Offers & Orders environment.
Watch now >>
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Airline Retailing at IAG
With notable NDC advances, IAG is entering the most exciting part of the transition to modern retailing - the Orders phase. Join the group's Head of Commercial Procurement for a quick overview of their journey thus far.
Watch now >>
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Corporate travel programs in the context of modern retailing
Developed with members of the Travel Manager Advisory Group (TMAG) the series approaches the transition from the vantage point of business travel.
Watch now >>
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