Welcome to the Q1 2024 edition!

Airline Retailing Consortium Release: Procurement Considerations for a World of 100% Offers and Orders

Since its establishment, and in tandem with the Modern Airline Retailing program, the IATA Airline Retailing Consortium has been working across six key workstreams with the objective to support the acceleration of the industry transition to a world of 100% Offers and Orders. 

In 2023, the Consortium addressed the "Why", "What", and "How" of the industry transition to modern retailing through three key outputs:

• A version 1.0 of the Business Case for Modern Airline Retailing
• A Business Reference Architecture, describing the business capabilities airlines may choose to have in the world of 100% Offers and Orders, which is also adopted as a recommended practice by the IATA Passenger Services Conference (PSC)
• A roadmap of generic airline IT transition pathways, helping airlines assess how they may steer their journey to 100% Offers and Orders. The proposed transition pathways were also endorsed by 15 technology providers, who have started investing and building the solutions required to reach the industry vision of a world of Offers and Orders.

Airline Payment - a Critical Enabler of Additional Value Creation in Retailing

In today’s competitive travel marketplace, delivering exceptional customer experiences is paramount. One critical aspect that significantly impacts customer satisfaction is payment. ​​​​​The industry vision of ​Modern Airline Retailing recognizes that payment methods are not just transactional tools - they are value enablers. By prioritizing flexibility and meeting passenger payment preferences, airlines can elevate the value creation potential of their commercial and retailing programs and consequently contribute to an enhanced customer experience at every touchpoint during booking and the actual journey. 

Let’s explore how payment plays a vital role in a successful airline retailing value creation:

1. Customer centricity as the core strategy: Modern Airline Retailing revolves around customer centricity -- the ability to understand and meet passengers’ needs and desires. Providing the service customers want includes tailoring payment to their preferences. Airlines that prioritize customer-centric payment experiences build stronger relationships and encourage repeat business.

2. ​​​​Frictionless transactions matter: a superior customer experience begins with seamless transactions. Passengers expect to buy tickets, ancillary services, and other add-ons seamlessly and through their preferred payment method at any touchpoint of their booking and actual journey. If customers encounter friction during payment, such as limited options or technical issues, frustration sets in and they may even abandon their air travel purchases altogether.

3. Preferred payment methods drive additional conversions: passenger surveys reveal that clients who cannot find their preferred payment method are more likely to walk away from additional purchases. Offering a variety of payment options—credit cards, digital wallets, bank transfers, etc.—increases the likelihood of successful conversions. By accommodating diverse preferences, airlines can capture more revenue and enhance customer loyalty.

In summary, when airlines approach payment as a key ingredient of their retailing formula for success, the outcomes benefit both airlines and customers alike. Airlines reduce cart abandonment rates, increase ancillary revenue, and strengthen their brand reputation, while customers enjoy hassle-free payment experience, which enhances their overall satisfaction and loyalty.

Did you know? If you are an airline, there is an easy way to evaluate and gain visibility on your current Payment & Settlement drivers and value readiness, as well as the potential areas of growth. The IATA Airline Payment index has been designed for all airlines and assists them in measuring, planning, and assessing their payment & settlement foundations to start creating value and maximize future sales conversion, alongside retailing.

✈ Find out more and start your assessment at iata.org/Payment-index >>

The 2024 Modern Airline Retailing webinars season is officially open!

We kicked off the 2024 MAR webinar series with two rounds of inspiring and thought-provoking updates from airline leaders across Asia, the Middle East and North America. 

Our heartfelt thanks go to the experts who participated in these webinar panels:

• Keith Wallis, Managing Director Customer Digital & Distribution, Air Canada  I  Chair of the IATA Distribution Advisory Council (DAC)
• Jeff Christensen, Director, Distribution, United Airlines
• Dr. Satya Ramaswamy, Chief Digital and Technology Officer, Air India
• Ridha Al Lawati, Acting Vice President – Digital, Oman Air
• Bryan Koh, Divisional Vice President E-Commerce and Distribution, Singapore Airlines

The webinars are now available to watch on-demand:

🌏​​ ​​​​​Flightpaths to Success - Asia & Middle East >>

🌎 Flightpaths to Success - North America​​​​​​ >>
 

Modern Airline Retailing: Financial Management in Offers and Orders Environment 

The ongoing industry transition to 100% Offers and Orders, has a far-reaching impact on the airline organization structure and business processes. Finance is one of the many business functions able to take strategic advantage of this transformational change to build simplified accounting processes leveraging modern technology.

Embarking on a financial management transformation enables airlines to align their financial management framework with the evolving landscape of airline retailing based on Offers and Orders. Today's traditional financial management framework, based on classic and legacy-driven Revenue Accounting practices, is unable to fully support the changes driven by Modern Airline Retailing.​ By transforming financial management, ​airlines can fully embrace the shift towards customer centricity, personalization, and innovative new products and services for the traveling customer. 

With the above in mind, the IATA Industry Financial Advisory Council (IFAC) Airline Retailing for Finance Working Group developed Financial Management in Offers and Orders Environment (v 1.0) with the objective to provide an overview of the need for a financial management transformation, alongside the evolving airline retailing transformation.​

The document emphasizes the importance of redefining the financial management framework in line with future modern retailing practices and provides insights into the capabilities and integration requirements within the Modern Airline Retailing Business Reference Architecture. ​It also outlines the impact of the transition to Offers and Orders on various financial management capabilities, including Customer Order Accounting, Partners/Suppliers Order Accounting, General Accounting & Revenue Recognition, Corporate Finance, Treasury & Risks, Enterprise Performance Management, and Tax Management. ​

✈ Explore the new Airline Financial Management framework for Offers and Orders >> 

ARM index update

Aeromexico
On 12 December 2023, Aeromexico was granted “Airline Retailing Maturity” status as an Airline, under the ARM index Program. This status recognizes that Aeromexico uses Shop capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 17.2 and the ARM index Capabilities Verification Guidance.

Etihad Airways P.J.S.C
On 22 September 2023, Etihad Airways P.J.S.C was granted “Airline Retailing Maturity” status as an Airline, under the ARM index Program. This status recognizes that Etihad Airways P.J.S.C uses Shop/Order/Pay/Setup capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 18.1 and the ARM index Capabilities Verification Guidance.

Joint Stock Company for Air Traffic Air SERBIA a.d. Beograd ("Air SERBIA")
On 15 December 2023, Joint Stock Company for Air Traffic Air SERBIA a.d. Beograd ("Air SERBIA") was granted “Airline Retailing Maturity” status as an Airline, under the ARM index Program. This status recognizes that Joint Stock Company for Air Traffic Air SERBIA a.d. Beograd ("Air SERBIA") uses Shop capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 21.3 and the ARM index Capabilities Verification Guidance.

Malaysia Airlines Berhad (MAB)
On 24 November 2023, Malaysia Airlines Berhad (MAB) was granted “Airline Retailing Maturity” status as an Airline, under the ARM index Program. This status recognizes that Malaysia Airlines Berhad (MAB) uses Order/Setup capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 18.1 and the ARM index Capabilities Verification Guidance.

Pratra Travel Technologies
On 21 December 2023, Pratra Travel Technologies 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/Pay capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, versions 17.2, 18.2 and the ARM index Capabilities Verification Guidance.

TAP Air Portugal
On 18 January 2024, TAP Air Portugal was granted “Airline Retailing Maturity” status as an Airline, under the ARM index Program. This status recognizes that TAP Air Portugal uses Shop/Setup capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 21.3 and the ARM index Capabilities Verification Guidance.

Trava (Traveknowledgy AB)
On 29 February 2024, Trava (Traveknowledgy AB) was granted “Airline Retailing Maturity” status as a System Provider for its airline retailing-based solution Post-booking process automation, under ARM index Program. This designation recognizes that the Post-booking process automation supports deployments using Order/Pay capabilities which are compliant with the standard Enhanced and Simplified Distribution message schema, version 17.2 and the ARM index Capabilities Verification Guidance.