AeroTime is excited to welcome Ann Cederhall as our columnist. An instructor with IATA on Airline Distribution Strategy and with Aeroclass on Airline Retailing, Ann is a frequent speaker and panelist at industry events. She has authored numerous highly regarded articles and white papers in the travel industry press. As one of the owners of the consulting firm LeapShift, Ann brings an extensive track record of delivering business value in project and product management roles worldwide.
The views and opinions expressed in this column are solely those of the author and do not necessarily reflect the official policy or position of AeroTime.
The main reason to engage in airline retailing is to create a better customer experience.
Classic airline comments like “the PNR couldn’t figure out which passenger should get the upgrade” hardly make for a good customer experience.
I can’t help but crack up when I hear “the computer says no”.
Here’s a snapshot of typical questions customers asks themselves:
- I’m travelling one-way and then with my mother on the return. Why doesn’t the airline know that we are travelling together?
- Where can I see what my seat looks like?
- I always buy the same things, why can’t they just offer me the FastTrack and the Priority boarding as a package?
- Why do I get pointless emails about places I really don’t want to go to?
- Why can’t I buy insurance to protect me against fare changes?
There are many more such questions, and I could easily fill hundreds of words with them, but in essence, it all comes down to PNR-centricity- PNR being ‘Passenger Name Record’ – and the airlines’ inability to harness and utilize data.
Airlines, just like travel agents, are using systems that are built on the PNR, the structure for which was designed in the 60s. If I were to detail all the constraints with the PNR, we’d end up with a very long list.
The PNR is simply not able to handle a reservation where a mother and son travel together, but one stays and one travels back. These reservations must be in separate PNRs and typically there is no glue to associate them. That glue is essential if you want to do retailing. I typically call that glue OMS – Order Management System – but you can call it whatever you like: ‘orchestration’, ‘glue’ or for that matter ‘thingamabob’.
Another PNR constraint is that it is purged and dies, meaning that you need other systems to keep the information alive, which is essential to retailing – keeping track of where the customer has travelled and what products the customer has purchased.
I think these examples suffice to explain why you must move away from a PNR-centric environment. That said, this doesn’t mean that you must get rid of the PNR entirely. You just need to take a different approach and manage it differently.
Returning to those questions that customers are asking:
Q: I’m travelling alone one way and with my mother on a return. Why doesn’t the airline know that we are travelling together?
A: You need to have glue, and these two passengers should be in the same order.
Q: Where can I see what my seat looks like?
A: You need to integrate a system that can display visuals, and for this, you also need glue.
Q: I always buy the same stuff, why can’t they just offer me the FastTrack and the Preboard as a package?
A: Offering bundles and discounts is one of the biggest value-adds within retailing – it engages your customers and makes them feel seen. This is basic functionality of an OMS (aka ‘glue’). The simple offer saying “you always book FastTrack and Priority boarding, so we’ll offer you a bundle of the two with a 15% discount” will result in one happy customer.
Q: Why do I get meaningless emails about places I don’t want to go to?
A: Because the airline is not using a CDP (Customer Data Platform) or else is not utilizing its CRM properly. While the airlines’ loyalty programs are one of their biggest assets, the customer data is limited. You can make it easy for the customers to share their interests and needs. For this you need a CDP/CRM, which the glue can integrate. What you want to achieve is:
“We’ve noticed that you have travelled to Miami eight times, would you Ike to go again?”
“Here’s a great offer to go to Athens with a 15% hotel discount”.
Q: Why can’t I buy insurance to protect me against fare changes?
A: Airlines are bound by standards defined in the fare structure. To me, this structure contains several products and insurance against fare changes isn’t one of them. Various insurance products can be created using glue, such as ‘cancel for any reason’.
It is a known fact that customers will always pay for true value-adds.
There are many opportunities for compelling retailing and it’s as simple as listening to your customers, what they like and dislike. Don’t mess with the basics: families with children need to sit together.
An OMS is also, to a degree, a Content Management System, if you are selling third-party products mixed with your own. You must be able to manage and control your product content mix. All product content sold should be reflected in the Order. And remember, unlike the PNR, the Order doesn’t die.
When working with Orders you can identify previous purchases, which enables better and more accurate marketing to your customers. Curated offers are where the customer feels seen and that wins loyalty. I also recommend that you investigate travel wallets, easily coupled with loyalty, to expedite refunds and reward customers more quickly.
So, how do you get started? The following steps are a good guideline:
- Listen to what your customers want and need.
- Find people in your airline who are interested and who follow what is happening out there. Alternatively, bring in advisors with expertise in the area.
- Create a customer-focused organisation within your airline. Don’t just focus on products.
- Start looking at systems who do ‘glue’. Alternatively, start thinking about how you can build ‘glue’.
- Define a clear vision of where you want to be and identify clearly what you currently have. Do you have a CDP/CRM? What are their capabilities? How do you integrate third parties? Do you need somebody to integrate for you?
Get started. It’s not that hard. You don’t require massive changes, or for that matter a transformation of all systems. Take the first step, move away from PNR-centricity and treat it just like any other reservation.