FOREWORD: OPEN TO CHANGE
Mike Reyes, VP Product Management, Sabre
Change is coming to the airline industry, and soon. At Sabre, we don’t see change as something to be feared – we believe it should be embraced. After all, the future ways of working promise to be simpler thanks to advances in technology – something I know will be well-received based on recent conversations with our customers. The chasm between today and a retail-led future enabled by offers and orders doesn’t have to be deep, dark or scary. Many organizations and industries have been through digital transformation and emerged better for it, any short-term pain outweighed by the longer-term benefits. In my view, the focus of transformation needs to be on what is to be gained tomorrow, not on what’s being left behind today.
THE SABRE PERSPECTIVE
[ THE WHY ]
Airline technologies and traditional ways of working that have served the industry so well and for so long may not serve airlines’ future growth ambitions. Decades of industry evolution have supported innovation and growth, but traditional industry constructs – embodied by acronyms like PSS, PNR, ET and EMD – are not well suited to retailing concepts of the future.
The industry has historically honored complexity, but there is now an appetite to simplify.
Carol Clements, Chief Digital & Technology Officer at JetBlue
In fact, many Low-Cost Carriers (LCCs) have been quick to adopt more modern and flexible ways of working. Yet even for LCCs, there are still limitations to the way offers and orders are being used, meaning that additional benefits can be unlocked as part of a broader transformation.
We believe travel retailing powered by offers and orders is a way for airlines (and agencies) to generate more revenue opportunities and satisfy the demands of modern consumers. But achieving the desired ambition of a retail-powered future for airlines goes far beyond technology. In fact, we believe that technology is only part of the equation. The other part centers on the organizational changes that will be needed. Working with a technology partner that sees the bigger picture, and has a plan for the end-to-end journey, can make a world of difference.
This partnership mindset infuses not just what we do, but also how we do it. We understand that technology is just one part of running a successful airline. It’s a facilitator that enables airlines to deliver core products and services – logistics, flights, travel experiences – to travelers. Our appreciation for the bigger picture, detailed understanding of all the moving parts within an airline operation, and our work with other links in the travel value chain is what ensures we are the right partner for major initiatives. We take on complex challenges such as those faced by airlines today as they seek to transform into travel retailers and solve them with technology, working in an open and transparent way to deliver a seamless end-to-end experience.
While others have sought to build a retailing solution on top of existing systems, Sabre is the only provider that has used first principles thinking to disassemble the problem and rebuild from the ground up. It’s why we have so many industry firsts; why we’re the ones doing what nobody has done before.
Mike Reyes, VP Product Management, Sabre
In engineering a suite of reimagined products that get airlines from where they are today to the nirvana of travel retailing, Sabre has ensured that our airline partners and their customers are central to everything we develop. Their voices echo loudly as we build towards the future. Getting started on the journey to a world of offers and orders requires a partner with a vision and experience.
A WORLD OF OFFERS AND ORDERS
[ THE WHAT ]
With limitless stock-keeping units (SKUs) in mind, Sabre has prioritized embedded Artificial Intelligence (AI) and Machine Learning (ML) capabilities that are also available through a bring-your-own-science model if desired. This supports optimization of offer personalization, combined with a strong reporting and data-centric architecture, so that airlines can make the decisions that are right for them in real-time.
Creating and distributing a broader variety offers across channels creates opportunities for airlines and their customers. It is designed to permit a more diverse product portfolio and improved customer satisfaction, leading to higher revenue potential.
It’s about providing customers with a rich shopping experience where they get products, bundles with our products, bundles with third-party products and custom offers. Customers get what they’re looking for in any channel.
Julio Toro, CIO Copa Airlines
During the Digital Ambition 2030 Panel at the IATA DDR Symposium 2021
From a fulfillment perspective, Sabre is committed to simplifying the airline tech ecosystem over time through adoption of order management. We envision that a single integrated traveler record will streamline customer service, and the integration of orders with revenue accounting will speed up the flow of money between retailers and suppliers, allowing more efficient financial reconciliation with less manual intervention.
These new capabilities represent Sabre’s overarching goal for enabling airlines to become advanced digital retailers, all while improving customer satisfaction, creating new sources of revenue and optimizing existing ones.
Airlines using these capabilities will also benefit from a modern tech stack that goes beyond offers and orders to provide true modularity, thanks to its microservice architecture. This empowers airlines to manage their IT spend more efficiently, gaining greater control over the total cost of ownership of their tech ecosystem as we depart from a legacy ‘buy-it-all-or-nothing’ approach.
As a modular travel platform provider, Sabre’s technology will also connect with in-house or third-party systems. Our approach will give our airline partners the flexibility they need to stand out in a crowded market and to deliver their desired brand and digital engagement across all channels.
HOW WE'RE BUILDING IT
[ THE HOW ]
Offer wider range of products and services
Deliver consistent omni-channel experience supported by NDC
Cross-sell 3rd party content to diversify revenue streams
Apply experimentation to optimize choices for travelers
Leverage AI/ML powered revenue maximization
Enhance conversion through greater personalization
Streamline fulfillment to optimize traveler experience
Maintain offer/order integrity throughout the trip
Automate workflows to enhance efficiency and reduce costs
At a recent Sabre event for airline executives, one message shone through: the ability to sell a broader range of valuable products and services – and to control where and how these offerings are retailed – is fundamental to the way some airlines wish to conduct business in the future.
In recent years, airlines have battled downward pressure on revenue. In the eyes of many consumers, air travel has become commoditized, resulting in thin margins and a challenging financial outlook for LCCs and FSCs alike. The introduction of an offer and order model is designed to enable airlines to retail their full range of air products and services both directly and indirectly.
It’s undoubtedly a good thing that airlines will have the ability to offer more choices to travelers. But in a world where choice abounds, it’s critical to ensure that travel shoppers are not overwhelmed by options. The choices (offers) presented must be relevant, personalized and contextualized to successfully convert into orders. While optimization of individual products is available today, the future lies in optimizing a multi-product bundle, thus offering competitively priced one-stop-shopping for travelers.
More complex offers and enhanced conversion rates also bring the resulting challenge of ensuring seamless order fulfillment at scale. Sabre’s retail travel marketplace is being built to ease this complexity. For airlines, greater system and workflow automation will improve efficiency by eliminating repetitive tasks and synchronizing orders as a master record.
DIFFERENT BY DESIGN
BEST IN CLASS
Sabre’s use of best-in-class experimentation – derived from Google’s AI/ML technology – represents a clear point of differentiation, but it’s far from the only thing we’re doing differently. We understand that knowledge (i.e., data) is power. The ability to source and process a larger volume of real-time data from a wide range of sources can be a game-changer. Sabre’s solution will make it easier to leverage this data to generate smarter offers that adapt to evolving market dynamics and traveler preferences. Our technology will also enable customers to automate this experimentation, thereby reducing costs and optimizing resource allocation.
The key tenets of our technical architecture include:
Bringing together Sabre’s deep industry expertise, with Google Cloud’s state-of-the-art AI technology and advanced machine learning capabilities, will enable airlines to take retailing and customer experiences to the next level.
GOOGLE CLOUD NATIVE-INFASTRUCTURE THAT IS SCALABLE AND SECURE
Sabre continues to invest in our infrastructure and platform to deliver reliable and scalable solutions. In 2020, we announced a 10-year strategic partnership with Google – the first of its kind. This partnership is a commitment to provide our applications in a Software as a Service (SaaS) fashion running on modern, open systems on the Google Cloud Platform (GCP).
MICROSERVICE-NATIVE ARCHITECTURE THAT SUPPORTS MODULARITY
The design of our retail travel marketplace is such that it comprises multiple modules designed to run independently. The modules interact via microservices to improve Sabre’s capacity to quickly deliver value to our customers with high volume, bite-size releases, in line with modern cloud tech practices.
API-FIRST APPROACH FOR AN OPEN PLATFORM
All modules in Sabre’s retail travel marketplace, even internal ones, have APIs that are designed from day one so that they could potentially be used externally. This ensures that all capabilities are available and serviceable via API if needed. Airlines can use APIs to build or augment their systems with open access to its capabilities using version-less APIs (i.e. always up-to-date with incremental improvements) that are designed to maintain backwards compatibility to improve speed to market and reduce development time on the airline side.
SABRE'S RETAIL TRAVEL MARKETPLACE
These are the APIs and applications designed to support customer interactions.
Sabre will employ 3rd generation retailing capabilities to enable help airlines to optimize their flight, ancillary and third-party content revenue based on each airline’s unique needs and strategies – in addition to using real-time feedback loops to automatically optimize offers prices and offer the right products to increase conversion.
This module will support integration of partner airline content as well as the distribution of all airline and third-party content to sellers that integrate either via NDC APIs or via the provided user interface.
Our offer management system will give airlines the have the capability to define, manage and retail offers for their airline content, such as flights and ancillaries, as well as third-party content. It is designed to act as a ‘single source of truth’ for both airline direct and indirect channels and for data and analytics.
With core capabilities that enable order creation and payment of multiple types of content, our Order Management System will ensure seamless integration from offer to delivery. It will be responsible for passenger servicing in voluntary and involuntary circumstances and enables proactive customer notification and management. Additionally, it will provide simplified delivery and accounting via real-time ONE Order integrations.
This module will manage the delivery of order items at the airport or by third-parties through real-time synchronization to/from the Order Management System. It will ensure access to the latest updates in the order, allow an airline to maintain its brand experience throughout all customer touchpoints and enable retailing during the delivery window for greater revenue opportunity.
Sabre’s Google Cloud-native data and analytics platform will help airlines access their real-time data from offers, orders and delivery system to derive reporting and valuable insights, as well as support ML and experimentation across multiple airline use cases.
TRANSITIONING TO A WORLD OF OFFERS AND ORDERS
Getting started on the journey to a retail-led future enabled by offers and orders may seem daunting for many airlines – our customers have told us as much. While some airlines have already begun their retailing journey, for others it will involve a significant departure from established ways of working across many aspects of their business. By the time the transformation is complete, much of the new organization may be operating very differently than it does today. What lies between today and the future vision is largely uncharted territory that demands no small amount of trust and commitment to navigate successfully.
We believe there is no ‘one-size-fits-all’ approach to transition and have designed our fully modular solutions with flexibility in mind. We also understand the importance of pacing the transformation process according to the specific starting point, organizational complexity, business appetite and desired goals for each individual airline, and will work collaboratively with customers to agree an efficient and effective route to their end state.
We know that for our FSC airline partners, incremental change at a pace to match their ambitions holds the key to a successful transition. There will almost certainly be an extended period during which legacy and new world systems will co-exist, and a phased transition approach will be necessary.
For our LCC airline partners, many of whom already have advanced retailing capabilities, a different approach may be needed. The focus could be on how best to transition to more scalable technology that will extend and expand their existing retailing capabilities – through partnerships and access to third-party content, for example.
For FSCs and LCCs, the transition will be challenging. But at Sabre, we’re already well on the way to identifying, mitigating and solutioning for those challenges. How airlines transition to a retail-powered future is equally as important as the end-state itself. We believe that the transition should be disruptive to your business, but not your operations. We will stand shoulder-to-shoulder with our airline partners throughout the process, turning unknowns into knowns along the path to our shared goal of modern travel retailing.
THE NEXT CHAPTER
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