Nothing to fear

Amadeus’ Holger Mattig explains how airports can potentially benefit from new technology that will allow the airlines to sell retail products and other non-aeronautical related goods and services direct to passengers.

Are airports ready for the airlines moving to offer and order retailing, and what will it mean for airports?

It’s all change in the airline industry as carriers accelerate long discussed plans to become ‘modern retailers’.

The move will see airlines invest in a new generation of technology that can help them better understand travellers, and package compelling offers to them in a similar way to digital pioneers such as Amazon and Netflix.

Estimates vary on how much additional revenue this approach to retailing could generate, but a recent report from McKinsey suggests it could be as much as $45 billion a year by 2030.

As this transformation progresses, air travellers can expect a whole raft of improvements to the aviation experience, many of them at the airport.

And despite attention being focused on the ‘retailing’ aspect and how airlines can better package offers containing flight, hotel, cars and destination products, this transformation is about much more than simply selling packages, and promises cost savings, too.

Enabling exceptional traveller experiences

As well as creating ‘offers’, airlines intend to retire decades-old data structures like tickets, electronic miscellaneous documents and passenger name records. Instead, a record of what a traveller has purchased will be housed in a single ‘order’.

Products can be easily added or removed from an order in advance of travel and third-party products can also be easily included. If something changes, the order is updated, and any third party involved – like a hotel, partner airline or travel agency – can be far more easily notified.

It is expected that this change will drastically improve aviation operations, ultimately leading to better experiences for travellers. There are several implications for airports.

Seamless journeys with digital identity and biometrics

As we wave goodbye to tickets (and other traditional documents associated with flying), the way passenger servicing happens at the airport can change, too.

There’s much greater scope for passenger servicing to happen using travel credentials stored on the traveller’s mobile device, in combination with biometrics.

This was recently demonstrated through an IATA organised pilot with a major airline, supported by Amadeus and several other partners. During this trip, passengers chose from a range of personalised airline offers. Following selection by the passenger, a single order record was created.

As a result, passengers were able to pre-apply for visas as required, and these documents were stored on the traveller’s mobile phone, alongside digital representations of their passports.

All passengers that chose to share their digital passports from a digital wallet on their phone with the airline received a ‘ready-to-fly’ confirmation via text message.

And those passengers that opted to share their biometric data with the airline in advance were also able to pass through every airport service point including check-in, bag-drop, lounge access and boarding ‘hands-free’, that is, without needing to present paper documents.

The pilot leveraged Amadeus’ digital identity solutions alongside technology from a range of other partners.

Improved disruption management

Managing disruption today is difficult as the industry lacks common platform technology that can bring all airport stakeholders together, although this situation is changing, and we at Amadeus are very active in this area.

The transformation happening in the airline industry is a key enabler for better disruption management. Improved analytics means Operational Control Centre agents’ visibility of how airline operations are performing is improving and new technology can help airlines propose the best action for recovery.

For example, the move to single order records will significantly simplify reaccomodation, by housing all information about the booking in one place that can be more easily updated when plans change.

In this new world, passengers can expect to be presented with new travel options quickly. These options will also be of a higher quality and computed based on a deeper understanding of the traveller’s trip context.

As airline technology becomes cloud-native by default, it’s also easier to link previously separate applications together, like crew management and passenger systems. Doing so helps an airline to better co-ordinate its own response during disruption to create new operational plans that consider all the various dimensions involved.

It also means airlines are in a better position to more quickly share information with airport stakeholders so that resources can be better allocated.

Here there is a significant opportunity to better empower the Airport Operational Control Centre (AOCC). When disruption occurs airlines and airports need to be in constant contact to fit airport capacity to evolving airline plans. Today, this interaction is largely manual, relying on phone calls and emails. But AOCCs are now beginning to overhaul their technology.

Dynamic dashboards covering key metrics, like runway capacity, turnaround efficiency, and on-time performance, provide a real-time view of airport capacity and performance. By drawing on third-party data streams, airports can see the likelihood and potential impact of impending bad weather before it happens.

But perhaps most importantly, these dashboards are complemented by flight-centric, unified communication channels so airports can make all this information available to their airline partners through collaborative platforms.

This brings key stakeholders together around shared metrics so better decisions can be made more quickly and more collaboratively. It’s a step-change from the fragmented systems and legacy communications channels typically in use today.

Growing retail opportunities for airport services

As airlines invest in new technology that can better package offers of third-party products, based on a deeper and more comprehensive understanding of the traveller, airports stand to benefit.

In addition to hotels, car rental and destination services, it will also be possible for airlines to include airport products within their packages. Of course, this already happens to a degree, but the process of providing details of an airport’s services – such as parking, fast-track security, lounge access, duty free, F&B offerings – and many other services will become much easier.

The important point here is that the understanding of the individual traveller will improve significantly as data is brought together to achieve a single customer view. It’s this additional intelligence that means the correct airport services can be offered to travellers at the right moment.

Airlines can increasingly provide a shop window for airport services, intelligently packaging and recommending them to passengers based on their specific needs. This will help airports overcome one of their primary commercial challenges – the difficulty of merchandising their services in advance of travel.

Airports don’t typically hold direct relationships with travellers at scale, which limits their commercial window to the period a traveller is actually inside the terminal. Yet sales of a whole raft of non aeronautical services could increase considerably if they were intelligently recommended to travellers in advance.

Supporting airlines to be better retailers at the airport

Airlines want to delight passengers and turn the airport into a retailing hotspot. They aspire to make consistent offers of airline and third-party products like transfers or destination services from any airport service point, for example, at the kiosk.

Here airports can play an important role by considering the technology infrastructure necessary to present airline offers at the airport. This renewed focus on retailing means common use airport service points need to be tightly integrated to all airlines involved and able to best represent an airline’s offer and its brand.

Airports also need to consider how payment will be made across these touchpoints. Too often today, payments made at common use service points aren’t reconciled to the booking.

This means airlines can’t easily link the services they’ve sold to individual travellers and results in a costly manual reconciliation process. Even worse, travellers at some airports still need to walk across the terminal to pay for additional services at the airline’s own service desk – hardly the retailing experience of the future.

Airlines are transforming to become traveller-centric retailers, and it’s happening right now. For example, Saudia has just chosen Amadeus’ newly launched technology for retailing, servicing and delivery.

As the pace of change accelerates, airports can play an important supporting role that will make their terminals more attractive to their airline partners and passengers.

About the author

Holger Mattig is Amadeus’ senior vice president for product management, airport and airline operations.