In recent years, airlines have been improving their sales practices. The introduction of modern distribution methods, flexible pricing, ancillary services has opened up new ways for airlines to get more profit through direct, indirect, and corporate sales.
However, although the commercial side of the industry has undergone enormous changes, many of its operational systems are built based on the principles of the outdated booking and ticketing.
This leads to complications.
At present, airlines have to serve dynamic offers, real-time pricing, ancillary packages, quick service, and uniform traveler’s experiences through all channels. Most of the old systems are not capable of working in such conditions.
Hence, order management has become one of the main areas to focus on in modern airline retailing.
The Industry Is Moving Beyond Traditional Booking Systems
Airlines have relied on the separate records approach for program management for some years:
- PNRs for booking
- Tickets for boarding
- EMDs for extra services
The separate records method dominated as long as rankings were simple.
However, airline merchandising underwent significant changes.
A single airline reservation may have various components like seats, bags, lounges, internet, loyalty programs, corporate trips, etc. Managing a network of various systems is a great challenge for the industry and leads to a poor experience
As the sector has started moving towards Offer & Order systems, airlines are currently migrating from ticketing systems to unified systems.
Instead of managing numerous distinct records, carriers have started managing the journey.
Why Airlines Are Facing Operational Gaps
Many airline organizations continue to work with distinct systems for various operations that include pricing, inventory, offer generation, service provision, through to order fulfillment.
Subsequently, airlines encounter:
- Inconsistent pricing across the platforms
- Lack of automation in the service process
- Slow order amendments and processing of refunds
- Revenue loss during fulfillment
- Challenges in managing ancillary services in a dynamic manner
The cause of the challenge in reality lies less in the absence of technologies and more in the ineffective connections between the systems, which do not allow modern retail technologies to be used effectively in performance.
The fragmentation creates friction in operations. The employees spend time on dealing with alterations, data reconciliation, and servicing requests in different systems.
At the same time, customers’ expectations continue rising. Customers of airlines are now expecting that airlines will provide them with flexibility, customization, and quick services throughout the whole journey.
This is where order management becomes critical.
Order Management Is Becoming the Center of Airline Retailing
In today’s Offer & Order process, the order becomes the key of the customer journey.
What is included in the order?
- Offer description
- Pricing
- Extra services
- Payment details
- Fulfillment status
- Service history
This allows creating a smoothly functioning commercial and operational stream.
Instead of handling separate records across different systems, airlines can manage the full lifecycle through one centralized order environment.
This is important because airline retailing is no longer only about selling a ticket. It is about continuously managing the traveler experience after the booking is created.
Modern airline retailing requires airlines to service offers dynamically, manage changes in real time, and maintain consistency across all channels.
Without stronger order management capabilities, even advanced retailing strategies can create operational complexity underneath.
Why This Matters for Revenue Performance
Order management has transformed into a subject of commercial importance for the airlines compared to its past role whereby its aspect was only an operational character.
Uncoordinated servicing environments usually create:
- Loss of ancillary revenue potentials
- Rise of servicing costs
- Delayed response
- Bad customer service experiences
- Increased manual workload
Connected order environment supports airlines in better implementation of offer-to-order lifecycle.
This means that airlines should be able to:
- Improve conversion rates
- Improve ancillary’s attach rate
- Decrease servicing friction
- Improve operational efficiency.
Get better control over the whole process of offers’ fulfillment and monetization across all channels.
The Shift Toward Unified Offer & Order Management
The landscape of airline retailing involves several facets which are crucial for reaching the overall goals of an airline.
The technology used tends to simplify and connect:
- Offer generation
- Pricing mechanism
- Inventory management
- Order tracking
- Service operations
- Order fulfillment
Into one continuous commercial flow.
This is why airlines are currently working on implementing coordinated strategies for the development of offers and managing orders.
The desired outcome is clear:
- Reduction of fragmentation
- Better implementation
- Increase in revenues
- Streamlining of operations
Airlines that manage to connect these different components will be in a favorable position to implement modern retailing concepts without generating additional complexity.
Conclusion
The airline business is becoming increasingly vibrant, unique, and service-oriented.
However, numerous existing systems proved insufficient to accommodate all the required flexibility throughout the entire passenger’s journey.
As a result, managing orders is a key system for the relatively new airline industry.
It allows airlines to closely link offers, orders, service, and delivery using a single environment suitable for modern retailing.
Providing the many changes due to the move toward Offer & Order paradigms, airlines able to operate effectively throughout the order’s entire life cycle would have more chances to maximize profits, ensure operations provide greater efficacy and achieve better consistency in customer service.
The main thing about modern airline retailing is that the creation of the offer is only the very beginning.
The key advantage lies in the proper management of the order throughout the entire journey.
