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What Are the Elements of an Airline Offer?

In Airlines, customers by Paul GilbertsonLeave a Comment

Airlines are beginning to rally around the idea that they need to be able to create and control their offers. This is not only the very premise from which NDC was born, but it’s also the new airline oxygen in terms of creating and maintaining More Revenue and Happy Customers in today’s world of personalization, digital commerce, and product differentiation. But you may be asking this question: “What exactly constitutes an airline offer in this new world?” So, we’re going to break it down for you.

Unlike the days where an offer represented the best filed fare, today’s airline offer is comprised of a number of dynamic elements. These include the flight schedule, seat availability, a price, and in most cases, some kind of merchandising element such as a product bundle, a la carte item, or even third party ancillary.

Now, wait just a minute. How is it that schedules, fares, and availability are considered dynamic elements of an offer? Aren’t those the very same “static” pieces of “everybody-the-same” data that got airline distribution into such a decades-old commoditized mess in the first place, and that NDC was designed to fix? How exactly is this any different from what we’ve done before?

The answer is that today’s airline offers are very different from days past! First and most obviously, merchandising has been added to the mix – all those delightful a la carte items, packages, bundles, and fare families have unleashed new levels of product differentiation and ancillary revenue. But even more importantly, today, each element (merchandising, schedules, availability, and price) can be dynamically adjusted through a set of business rules and real-time calculation logic that is applied at the very moment an offer is requested in any channel. Furthermore, all of this is achievable using engines that the airline – not a third party – controls.

With the airline finally in control of its own offer engines, it can design offers for maximum consumer relevancy, competitiveness, and choice. Airlines can create offers that are fully optimized to entice the consumer to buy what he or she specifically wants, and at a price point that makes sense for both the airline and their customer. Plus, with the airline in control, each offer is delivered in milliseconds – with no need for caching, huge investment costs, or reliance on legacy systems that are not only ill-suited for the task but very expensive to use.

Yes, this new world of airline-controlled offers is radically different from airline commerce just a few years ago, and represents a huge step forward for our industry. Even more exciting, all of this is possible using technology available today.

If you are currently figuring out your calendar for the year ahead, Farelogix has a great event for you to add. On April 5-6, we are hosting the industry’s first event dedicated to technology for airline-controlled offers. This invitation-only symposium is specifically for airline IT, revenue management, and e-commerce executives that want to explore strategies and technologies to dynamically manage all aspects of the airline offer – from pricing and merchandising to optimized availability and schedule-building.

For more information or to request an invitation, please visit http://www.farelogixoffersymposium2017.com

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Farelogix first published this content on its Ask the Question blog site.

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