How larger airlines are adapting distribution to stay ahead of emerging trends
Larger carriers can have a reputation for being slow to react to changing customer behaviour. So we decided to explore what some airlines are doing to ensure the ability to flex fast is built in to their infrastructure.
Whether it’s a spike in demand from an unexpected source market, a new route with unpredictable sales patterns, or even customers shunning domestic or shorthaul flights for fear of growing their carbon footprint, you can’t anticipate what your passengers are going to do. With fewer decision-makers and less complexity, smaller airlines can often be nimble and react fast. The larger players can sometimes take much longer to respond, but some of them are embracing new techniques to stay flexible. We decided to find out how.
Traditionally, to adapt to new trends, airlines have had to go through several steps. The first is to notice that something is happening at all. Then, proposals will be developed, discussed and decided on. Finally, there’s often an implementation period as tools and processes are built and rolled out. From start to finish, this can take anything from a few weeks to a few years. The secret to staying flexible lies in eliminating, automating or dramatically shortening some of these steps.
1. More antennae give faster detection
The more markets you’re present in, the quicker you’ll notice new patterns emerging. Naturally, being in more markets has traditionally meant more headaches – more contracts to sign, more regulations to manage, more payments to figure out and ultimately the challenges of global money repatriation . But many airlines are embracing modern GDS sub-hosting services like W2 by GO7 and/or W2 global ticketing services to do a lot of this for them.
With this arrangement, one contract opens the door to all of the leading GDSs and all global markets – plus the revenue and data – that comes as a service with W2. By outsourcing global distribution via GDS in general, or ticketing in remote markets, you’re free to focus on what’s most important right now, while keeping an eye on your reporting to more easily spot any spikes that might need your attention.
2. Be ready to sell anywhere
Too often, we speak to airlines who spot a commercial opportunity, decide they want to go after it, but are halted in their tracks when they discover that the ship will have sailed by the time they can implement the necessary changes. An example: snatching demand from an unexpected source market, triggered by a trading event ,sporting or cultural event. If by the time the event happens, you’re still trying to set up distribution in a particular BSP market, that’s an opportunity missed.
That’s why many airlines are piggy-backing on other people’s ticketing capabilities to create a “silent network” that’s ready to sell in any market when needed. By using someone else’s IATA code, GDS access and ticketing infrastructure, it’s possible to sell anywhere at the drop of a hat. This is something we do for many customers at GO7 using our W2 code, and airlines only pay when they take a booking. It’s built-in flexibility that means you need never miss an opportunity to sell. As a very positive side effect, sales in remote markets are less subject to high price elasticities, thus resulting in a better overall revenue quality even.
3. Keep friends close
Whether it’s with other airlines, or other modes of transport, setting up the technology to enable partnerships is a notoriously complex challenge in the travel industry. You’re only inking deals because they’re mutually beneficial. If they take months (or even years) to set up, that’s a lot of mutual benefit lost as you wait.
Creating an infrastructure that sets you up to activate partnerships quickly sounds like a pipe dream, but new technology is making it possible. At GO7, our interlining and ticketing products are allowing not just airlines, but also rail and ferry operators to integrate their operations with each other like never before. That gets partnerships contributing faster, unlocking new business opportunities when exploring how you can work with other companies to respond to a trend.
These are just some of the ways that larger airlines are setting themselves up for maximum flexibility, without creating huge amounts of extra work. With solutions like these in place, carriers can pick up signals much quicker, make more informed decisions, and implement solutions at a pace that keeps them a step ahead, and ultimately helps them to optimize their key KPIs in terms of Average Load Factor, Average Yield and overall Revenue Quality.
