While there has been much talk and debate since IATA published their vision of a world of Offers and Orders, the Passenger Service System (PSS) is a critical piece of the airline ecosystem that will not simply vanish overnight. IATA even stated, “the question arises as to how the PSS needs to be enhanced to work in this new retailing world.” Today, we want to give you a preview of a future state in which reliance on the PSS is reduced in favor of new practices that allow airlines to sell more, across more channels, all while streamlining legacy processes.
Delivering the vision for personalized travel retailing, shared by Sabre and IATA, will be achieved through an API-based product ecosystem.
From an Offer perspective, the end-state will include intelligent retailing via a retail platform and offer management system through which all product and customer attributes will be analyzed to create personalized offers. This retail platform will use Sabre’s NDC-enabled Offer and Order APIs to communicate the offers to all partners and channels. For Orders, the traditional PSS will gradually be replaced by a new order management system which fulfills the offer, settles payment and creates orders as new centralized records for customer and trip data throughout a journey.
Moving to the Order model will reduce operational complexity by eliminating passenger name records (PNRs), electronic miscellaneous documents (EMDs) and special service requests (SSRs). Since an Order will serve as the single trip record, trip changes, bundling content across different supplier types, and servicing customized offers and orders will be easier than it is today.
The Offer and Order model is underpinned by a new foundation for data and analytics that supplies rich customer and operational data to the Offer and Order management systems as needed – and includes Artificial Intelligence and Machine Learning (AI/ML) based services to further optimize customer touchpoints.
Taking inspiration from another industry which has evolved to better meet consumer demand, the illustration below uses a modern grocery store analogy – with a wide choice of products, bundled offers, flexible shopping and payment options – to adapt the original IATA diagram (included in their October 2021 whitepaper) to show Sabre’s view on the core building blocks that are critical to an end-state Offer and Order solution.
The transition to Offers and Orders, while gradual, will see a paradigm shift in terms of technology and operations to support content and commercial model innovation.
The industry will move from a world of static information filings, and multiple parts required to fulfill and service bookings, to one that is more dynamic, intelligent, and flexible. IATA set an aspirational goal for the airline industry to transition to Offer and Order-based retailing by 2030. As a result, travel suppliers and sellers will need to manage hybrid processes associated with ATPCO/EDIFACT content and Offers and Orders for some time. This reimagining of travel technology will benefit all parties, with travelers being offered a wider choice of personalized content, and travel suppliers and sellers benefitting from improved efficiency and enhanced revenue opportunities.
Explore the glossary:
The process through which travel suppliers define their product catalog and pricing (retail) to create offers, place the offers across all points of sale (distribute), and differentiate their brand experience (personalize).
- Schedule optimization – Strategic analysis and tactical management of how every route can contribute to the airline’s overall profitability
- Revenue optimization – Development of the product catalog (all air and ancillary inventory, fares and third-party content) that optimizes total revenue by considering market dynamics, competitor positions, and customer data
- Retailing partners – Partner connectivity will provide all background information and data needed to facilitate the sale of any third-party content via the retail platform.
- Offer store – Storage of all elements of an offer selected by the traveler until such time as the offer has expired or the customer has proceeded to purchase and the offer converts into an order.
- Offer definition and catalog – The inventory free of booking classes that reflects what is available for sale. This includes any conditions attached to offers, such as change and refund policies.
- Dynamic pricing and bundling – Revenue optimization, the pricing engine and the offer catalog come together to construct an offer that is intelligently personalized and available for sale according to the offer rules.
- Personalization – The application of data science to customer relationship management (CRM) data, trip context details and market trends to generate intelligent offers that are tailored based on customer credentials and known/inferred preferences. Greater content personalization can help improve sales conversion rates and create new cross-sell and upsell opportunities.
The process through which an offer is converted into an order (fulfillment). This includes the management of payments/settlement, travel bookings, inventory control and order fulfillment at the airport–all while accounting for total revenue.
- Order store – Storage and management of the order throughout its lifecycle, including a record of all changes made by either the traveler or travel supplier, especially in case of reaccommodation.
- Payments – Integration of all acquiring banks and payment providers supporting the forms of payment accepted.
- Servicing and reaccommodation – Orchestration of the changes required for each voluntary or involuntary change scenario. This business system ensures closed-loop communication with the customer and reconciliation of inventory with any external partners or suppliers.
- Departure control – A simplified workflow of order processing tasks needed on the day of departure, most likely to focus on exception handling and change management in the future.
- Financial accounting – A future workflow where real-time revenue value from a flight ready to depart is available. This will be achieved by moving many activities currently in Revenue Accounting into the Offer and Order workflows, including revenue integrity protections.
- Supplying partners – Partner connectivity will provide all background information and data needed to facilitate interlining, codesharing and the management of third-party services.
The consistent management of content and user experience across owned and third-party sales channels, including their sales performance. NDC-enabled capabilities will expand distribution reach by enhancing the consistency of what offers can be distributed across channels, as well as how those offers will be displayed.
Connectivity and APIs
Efficient API access and modularization will allow for new and flexible commercial models between travel suppliers and sellers. It will allow partners to embrace channel differentiation and sell existing and new offers.
Tech foundations, data and analytics, AI/ML
Cloud-based data and analytics will support the retail platform and offer and order management systems. Real-time, two-way communication between the data fabric and the business systems will allow for “in the moment” personalization of the full product catalog. AI and ML-based microservices support the business systems by further optimizing recommendations in the point of sale and service.