A significant shift is underway in the aviation industry as airlines move beyond just selling flight tickets to become integrated travel platforms, offering a full suite of services directly to consumers.
A New Era in Airline Retailing
The concept of ‘modern airline retailing’ is set to revolutionize how airlines engage with their customers. According to VK Mathews, founder and executive chairman of IBS Software, this change is “the single biggest transformation” in airline sales for the near future.
This new approach places the consumer at its core, leveraging advanced data and technology to deliver a seamless and highly personalized shopping experience. Airlines aim to offer much more than just a seat on a plane.
What Does “Modern Airline Retailing” Mean for You?
Imagine an airline acting as your one-stop travel shop. You’ll be able to book not only your flight but also ancillary services like lounge access, hotel stays, cab bookings, car rentals, and even unique travel experiences—all tailored to your individual preferences.
Think of it like an e-commerce giant, but specifically for travel. This integrated platform will use cutting-edge technologies such as Artificial Intelligence (AI), New Distribution Capability (NDC), real-time data analytics, and more, to provide a user-friendly and comprehensive booking experience.
Why Airlines Are Making This Shift
Airlines are eager to go directly to consumers, bypassing intermediaries that don’t add value. By doing so, they can build a deeper relationship with passengers and understand their needs much better.
This strategy opens up significant new revenue streams. Besides flight tickets, airlines can boost ancillary revenue through partnerships and the sale of other travel-related products. It also allows for more dynamic pricing and tailored packages, leading to a higher average revenue per customer.
For instance, the average global ticket price is about $163, while in India, it’s closer to $90-$100. This disparity highlights a strong incentive for Indian airlines to explore new revenue avenues, as costs remain similar globally.
Beyond Traditional Online Travel Agencies
While online travel agencies (OTAs) allow you to book flights, hotels, and cars, these are often separate bookings. If your flight is delayed, you typically have to manually adjust your other reservations.
Modern airline retailing promises a superior, end-to-end solution. If your flight gets delayed, all associated services—like your hotel or car booking—would automatically be amended and updated in real-time. The airline effectively becomes the “merchant of record” for all your purchases, ensuring a smooth experience even when plans change.
Key Takeaways
- Airlines are transforming into integrated travel platforms, offering a wide range of services beyond just flights.
- This shift aims to provide personalized, seamless experiences and increase direct engagement with customers.
- It’s a significant opportunity for airlines to boost revenue through ancillary sales and dynamic pricing.
This evolving landscape promises a more cohesive and user-friendly travel booking experience, redefining the role of airlines in your journey.
