NDC TO THE POWER OF SABRE

This eBook discusses the opportunities that next-generation retailing and distribution present for airlines, agencies and travelers. By bringing together industry perspectives and Sabre expert views, we will separate IATA NDC fact from fiction, define what successful personalization looks like and provide practical tips for elevating your travel retail strategy.

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Chapter 1 Available Now

Beyond the seat: what specifically is airline retailing?

Today, many airlines are still limited in their ability to influence travelers and successfully retail across the entire customer journey. Siloed data, a lack of customer insights and disparate distribution strategies have left airlines blind to the information and resources necessary to excel as world-class retailers. In this article, we look back at the genesis of airline retailing and explore the next frontier – new tools and standards, emerging technologies, and inspired approaches to put airlines, travel agencies and their technology partners ahead of the retailing game.

Airline Retailing: The process of pricing and packaging air and non-air products and selling those products across all channels. This ensures the right offers are targeted appropriately to travelers at the right time in their purchase process.

Today, many airlines are still limited in their ability to influence travelers and successfully retail across the entire customer journey. Siloed data, a lack of customer insights and disparate distribution strategies have left airlines blind to the information and resources necessary to excel as world-class retailers. In this article, we look back at the genesis of airline retailing and explore the next frontier – new tools and standards, emerging technologies, and inspired approaches to put airlines, travel agencies and their technology partners ahead of the retailing game.

Quote Early on, NDC was perceived as a GDS killer, but now, it is quite the opposite. In the future, where we will differentiate will be in the sophistication of the integration of all this rich, new content.
Kathy Morgan
– Vice President, NDC Program, Sabre
Quote We, the travel industry, have trained our consumers only to buy on price and schedule. We should all be looking beyond.
Caroline Strachan
— Managing Partner, Festive Road
Quote We are operating in a traveler-centric market, and we are competing with the experience delivered by leisure travel technology every day. Our travelers are time-poor people, often distracted by the purpose of their trip. They need content presented to them in a way that is easy to consume and tailored to the right point in their journey. The display of content in our mobile app plays a critical part in the overall user experience.
Fred Stratford
— CEO, Reed & Mackay Travel Limited

Dynamic 1: Thinking beyond the seat

Historically, airline retailing revolved around the selling of a single aircraft seat. Airlines chose to distribute their product (the seat) via two primary retail channels, either directly to the customer through their own websites and/or indirectly via third parties, often managed via a global distribution system, or GDS.

The expansion of the air product catalog, driven by the growing importance of ancillaries as a revenue stream, further complicated this model. Airlines now have more to sell and need to display and distribute that content in various combinations.

Quote Early on, NDC was perceived as a GDS killer, but now, it is quite the opposite. In the future, where we will differentiate will be in the sophistication of the integration of all this rich, new content.
Kathy Morgan
– Vice President, NDC Program, Sabre

Traditional Airline Retailing Model Today, airlines make offers based on schedule, availability and fares, both directly to the customer and indirectly via an agent.

Traditional Airline Retailing Model Today, airlines make offers based on schedule, availability and fares, both directly to the customer and indirectly via an agent.

Quote We, the travel industry, have trained our consumers only to buy on price and schedule. We should all be looking beyond.
Caroline Strachan
— Managing Partner, Festive Road

Dynamic 2: Low-cost model challenges more than just price

The growing importance of ancillaries in the market is evident by the growth of the low-cost carrier business model as portrayed in the “Ancillary Revenue Yearbook.” During the past seven years, seat revenue per passenger (CAGR) has declined by 2 percent, whereas ancillary revenue per passenger (CAGR) has grown by 41 percent. However, ancillary revenue alone will not make up the 2 percent decrease in seat revenue per passenger. For this, a different and more intelligent approach to retailing is required.

Airline Revenue Mix The airline revenue mix is changing due to the global growth of low-cost carriers.

Airline Revenue Mix The airline revenue mix is changing due to the global growth of low-cost carriers.

Quote We are operating in a traveler-centric market, and we are competing with the experience delivered by leisure travel technology every day. Our travelers are time-poor people, often distracted by the purpose of their trip. They need content presented to them in a way that is easy to consume and tailored to the right point in their journey. The display of content in our mobile app plays a critical part in the overall user experience.
Fred Stratford
— CEO, Reed & Mackay Travel Limited

Dynamic 3: Personalization - the holy grail

Personalization has emerged as the holy grail for successful airline retailing. Understanding why someone is traveling and being able to infer the types of products and experiences they care about increases opportunity for conversion. Today, a traveler could spend US$20,000 annually without the airline knowing so much as his or her meal preferences or activities the consumer might enjoy at his or her destination. This is inconsistent with personalized retail experiences customers are accustomed to receiving. To align with today’s travelers, airlines and travel agencies must think and behave like true retailers. They need to analyze consumer behavior and market data to better target future offers. Airlines need intelligent systems to create smart offers.

Together these dynamics present new opportunities for airlines and agencies to deliver personalized offers and experiences to travelers. To further explore these, download chapter 1.

Chapter 2 Available July 2018

A win-win-win for the travel ecosystem

Chapter 3 Available August 2018

Innovating Beyond NDC

Chapter 4 Available September 2018

Best practices for building retailing capabilities

Chapter 5 Available October 2018

A look into airline and agency perspectives

Quote Our vision is much broader than NDC. We are uniquely positioned to deliver retailing solutions across the end-to-end customer journey from offer creation all the way to fulfillment.
Rodrigo Celis
– Vice President, Product Management, Sabre