Video of the week - Utilising the travel distribution model… Future proofing your distribution channel

9 April, 2019

Legacy distribution systems have for decades presented airlines with the twin problems of high costs and product commoditisation. In efforts to address these issues carriers from around the world have invested heavily into establishing their own API channels with agents, while the concurrent push by IATA for airlines to implement the NDC standard has encouraged the industry to adopt a retail focused approach to distribution.

The GDS providers have embraced the need to evolve in order to remain relevant and to compete effectively against other intermediaries and aggregators such as metasearch companies (some of which now have direct booking capabilities), as well as digital behemoths such as Amazon, Google, and Facebook – to gain a slice of the pie.

But as airlines work on enhancing their retail offering and improving their merchandising capability via both direct and indirect channels, a resounding message from industry players is that airlines need to consider the importance of mobile and messaging platforms, which are slowly replacing the desktop as the preferred interface for researching and booking travel.

There are some major questions. Is this increasingly fragmented and complex commercial and technological distribution landscape sustainable? How will business models evolve in response? Is there a need for a direct connect aggregator? Should airlines build lots of direct connects or revert back to lean, centralised distribution channels?

There are many more. Who is going to be offering services to bridge the gap between airlines/aggregators that are NDC compliant and those that aren’t? Will it be the GDS and IT providers, other airlines or speciality providers? How are newer intermediaries adding value to airline distribution? How do airlines enhance their digital shopfront? Are airlines over-emphasising the importance of over mobile messaging platforms and bot technologies?

A panel discussion at the CAPA – Centre for Aviation Americas Aviation Summit in Mar-2019 attempted to answer these questions. Moderated by Travelport’s global head of new distribution, Ian Heywood, there were interesting insights from American Express Global Business Travel, director global content & distribution strategy, John Bukowski; AmTrav, CEO, Jeff Klee; and United Airlines, MD merchandising, Jeff Christensen.