Airlines often enter into affiliate agreements with other airlines to expand options and provide seamless travel for their passengers, including a more extensive set of routes, flight choices, international destinations and services into or from smaller airports.
Unfortunately, the result is often a passenger travel experience that is far from seamless. Confused passengers may have to do a fair bit of research to figure out whether they need to log into another airline to assign a seat or request services. Or they may be in for an unpleasant surprise at the airport.
A complicating factor is that airline partnerships come in many flavors. Partnership agreements between airlines can be codeshare, frequent flyer, alliance or interline. Additionally, there are numerous arrangements where the operating carrier is different from the marketing carrier. All of these agreements affect whether frequent flier status carries between airlines, whether bags and ticketing will continue to the destination, and whether various ancillary purchases — early boarding, premium seating, baggage fees, club privileges, change fees, meal preferences and other add-on services — and upgrades will follow through the entire journey.
Since these ancillary sales constitute a double-digit percentage of revenue for nearly all airlines today, not making the process seamless for customers can result in substantial lost revenue for the carrier.
How to make the dream a reality
To address the complexity, the International Air Transport Association (IATA) created a modernized standard called New Distribution Capability (NDC). Many airlines, global distribution systems and internet shopping engines are working toward implementing this communications and format standard. Many shopping engines, in fact, are already using it to simplify and enrich the shopping experience by making the perks included in a particular fare more visible to shoppers. However, the number of airlines that can or are willing to fully interchange all ancillaries is still relatively small, and the types of fully implemented interchanges vary greatly.
Modern interactions such as NDC make it possible to capture and separate the key information needed to analyze each market, channel and partner. This is important, since a chief integration concern is knowing where to invest. To understand the priority and business case for a given partner integration, an airline needs to analyze the ancillary market combined with the partner’s associated air travel market.
Fortunately, airlines are recognizing this and are building the ability to fully understand the profitability of each distribution channel, including ancillaries and the services offered. The DXC Technology analytics team has seen an increasing interest in building better capabilities to analyze, manage and target efforts. Airlines now recognize the benefits of using analytics for channel interactions, bookings, ancillary sales, partner sales and passenger buying patterns to drive “smarter” partner relationships. This will lead to greater targeted integration and less frustration for passengers, so that seamless travel becomes a reality.