Why Modern Airline Retailing Needs More Than Great Offers
Over the years, the primary objective of airline retailing has been improving the offers presented to customers. Innovations such as dynamic pricing, personalization in making bundles, branded fares, and ancillary service products have helped airlines redefine the value proposition for their customers. However, making the right offer is only one half of the retailing journey.
The real challenge starts when a customer accepts the made offer.
The booking itself initiates the series of operational processes that need to be performed to wrap up the booking- from confirming payment and fulfilling ancillary services to changing flight itinerary, issuing refunds, servicing customers at the airport and accounting for revenues. Until now, all these measures had been normally performed by the airline by managing the respective functions through disconnected records: Passenger Name Record (PNR), electronic tickets, and Electronic Miscellaneous Document (EMD). Although this scheme has allowed airlines to operate successfully, the integration of more sophisticated retailing schemes results in greater complexity faced by airlines.
That is why the modern Order Management has become one of the core elements of Modern Airline retailing. Instead of treating the reservation as the end of the sales transaction, Order management allows airlines to cope with every customer journey through a single, continuously evolving commercial record.
From Booking Records to Customer Orders
The system of traditional airlines is based on each particular transaction, whereas a booking is recorded differently than a ticket issue and additional checks are made when it comes to baggage or a seat. Every change, such as cancellation or an extra purchase makes the operational process more complicated than it originally was.
This system was enough during the times when airline products were straightforward, but now the situation has changed.
Today’s passengers require a smooth process that allows them to get a customized offer, flexibly arrange the necessary services and have all the necessary help in any channel.
Managing customer expectations with several disconnected records has become very challenging.
Order Management gives a new perspective on the issue.
In this model airlines manage one record for each customer, which represents all the transactions made by him/her, including payments and post-booking changes.
How Order Management Works
One way to comprehend Order Management is to observe how a booking works.
The process starts as soon as the traveller browses for flight options.
Depending on flight availability, ticket prices, and user needs, airlines provide an offer with one or several flight options.
As soon as the traveller picks an option and makes a purchase, this offer turns into an Order.
In the following steps, the Order acts as the only valid document.
At every subsequent step of the travel process, the Order is subject to changes.
For instance, if the traveller buys an additional suitcase, books a first-class seat, makes a flight adjustment, asks for a refund, or adds any service, all changes will appear in the same Order instead of a separate set of documents.
Additionally, the Order facilitates downstream processes, including:
- Confirming and reconciling payments
- Carrying out ancillary services
- Servicing at the airport and in operation
- Notifying customers
- Accounting and reconciling revenue
- Delivering support after the trip
This means that airlines will deal with one single up-to-date Order rather than several transactions.
This is how post-booking operations become simpler; visibility is improved across commercial operation teams.
Why Order Management Matters Beyond Technology
Order Management is perceived as an IT modernization process but its significance is much wider than simply the technology aspect. It provides improved visibility into the complete customer relationship for commercial teams and not only insights into specific transactions. Revenue teams are able to analyze customer behavior in terms of making use of offers and additional services before, during and after the journey. Customer care departments are provided with a holistic approach to processing orders at various stages via one unified system. Operational teams can fulfil their operations more efficiently, and the finance department benefits from quick settlements and accounts.
In short, Order management is not only a replacement for the outdated technology but also a facilitator of the new way of doing business in the airline industry.
As the new paradigm of operating in the Modern Airline Retailing mode is established, further integration becomes highly important, as the customer journey does not finish with booking confirmation any more.
Supporting the Next Generation of Airline Retailing
The airline sector is consistently making the transition from simply offering flights to providing travelers with comprehensive travel solutions. Travelers are becoming more accustomed to the fact that airlines should be capable of making timely offers, providing flexible services, and being consistent regardless of where the booking is made and how many times the itinerary is changed. In order to comply with these characteristics, companies cannot merely rely on modern pricing or more detailed content. In order to achieve these objectives, they need an operational background which will allow for continuous retailing.
Order management is a good operational foundation for the companies. By joining offers, fulfillment, service provision, payment, and accounting into a big cycle, airlines will be able to reduce operational complexity and make their customer service more consistent. Moreover, in this case, the commercial departments will have the opportunity to introduce new products, personalize offers, and adjust according to the changing customers’ needs by avoiding being tied to fragmented legacy processes.
The Growing Importance for Corporate Travel
The value of Order Management becomes even more evident within corporate travel programs.
Corporate reservations entail more than just one-off transactions. They involve negotiated fares, terms for the eligibility of travelers, approval chains, compliance with policies, alteration of travel plans, and participation of ancillary service providers. The management of these processes via unconnected reservation systems often complicates things for both airlines and corporate customers.
The Order Management tool allows for a more structured approach to the management of the transactions throughout the entire trip lifecycle. Instead of treating each transaction as a separate case, it allows airlines to keep track of all transactions from just one point, thus increasing service efficiency as well as enabling them to develop adaptable and customer-friendly programs.
As airlines strengthen their relationship with their corporate customers, Order management is going to play an increasingly important role in providing effective services.
Looking Ahead
Today, Modern Airline Retailing is understood to imply dynamic offers and individualized buying. While such features do enable transformation in airlines’ sales, the success of the industry in the future will depend in equal measure on how efficiently the offers are managed after purchase.
Order management is believed to be the subsequent development in this direction.
It implies the shift of focus of the industry from managing single ticket documents to the management of full customer relations. This will create a sounder operational background for retailing, enhance the cooperation of various airline departments, and prepare the industry for the future where the offers, orders, and the experiences are seamlessly integrated.
As airline retailing keeps evolving, airlines which are able to develop this capability will be not just the ones who offer the best offers, but also the ones who have the operational capacity to process every order from the beginning to the end.
Bringing Intelligent Offers and Order Management Together with OfferSense
With the advancements of airlines in Modern Airline Retailing, the importance of the capacity to provide appropriate offers and manage ensuing consumer orders rises significantly. The interconnection of both these functions enables airlines to transition from a conventional ticket-based selling approach to a customer-oriented approach.
This is exactly where OfferSense from Infiniti Software Solutions fits the current trend in the industry.
OfferSense is designed to help airlines modernize their offer and order management capabilities through intelligent offer creation, dynamic pricing, personalized product combinations, and ancillary merchandising. By supporting the evolution from Offer to Order, it enables airlines to explore more flexible ways of presenting travel options, managing commercial offerings, and responding to changing customer preferences.
OfferSense helps airlines achieve a more capable and responsive retailing environment through dynamic pricing, seat and ancillary offers, bundled products, as well as Offer & Order lifecycle management. The system also empowers airlines to shift towards a more dynamic commercial decision-making practice based on customer context, product value, and evolving market demand.
Ultimately, in the future, the success of retailing will depend on how well airlines can link offers to the orders placed by customers. To aid in this effort, OfferSense aims to help airlines with the shift to a more coherent airline retailing ecosystem, where offers and orders work together to enhance retailing capabilities.
