Airlines want to offer travelers more choices, like flights, hotel stays, car rentals, and other travel needs, all in one place. For this to work smoothly, airlines need a good way to handle orders. This is where “order management” becomes really important.
What Are Orders?
In the airline world, an “offer” is just a fancy word for the different things an airline can sell you. These include:
- Flights and seat upgrades
- Extra luggage allowance
- In-flight meals and lounge access
- Add-ons from other companies, like car rentals, hotel bookings, and tours
When you choose something from these offers, it becomes an “order.” Think of an order as a receipt or list of what you’ve picked and paid for. It includes details like:
- What you bought (like a flight or a meal)
- How much it costs
- Your personal info and payment details
- Any special requests you might have
In simple terms, order management is the system that helps airlines keep track of everything a customer picks and pays for, making sure everything goes smoothly from booking to boarding.
Why is order management important?
Order management helps make sure that everything promised to the traveler gets delivered correctly. It tracks the order from start to finish, ensuring that everything is right and arrives smoothly. This becomes more important when the airline offers products or services from other companies. If airlines want to keep customers happy and make more money, they need to meet all the travel needs of passengers, especially since making money is getting harder.
Switching to a system where airlines manage offers and orders together will help them understand the whole customer journey and focus more on the customers. Order management helps in many ways:
- Booking: Airlines can make booking faster and easier with more ways to pay.
- During travel: Even after the order is made, airlines can offer helpful products and services at the right time to make the trip better, while earning extra money.
- On the day of travel: Order management makes it easier for airlines and partners to share information, making the traveler’s experience smooth and connected.
- After travel: Once the trip is over, airlines can instantly add points to loyalty programs or give credits for interruptions.
Old systems could still work, but they weren’t built for today’s fast, digital world. If airlines don’t upgrade, they’ll keep using slow, costly methods that stop them from improving.
What are the financial benefits of order management?
Selling and managing travel today is very complicated. Order management helps make things easier by simplifying how airlines handle bookings, deliveries, and payments. Instead of using older methods like PNRs, e-tickets, and EMDs, combining them into a single order focused on the traveler makes the entire travel process smoother. This can open up a lot of money-making opportunities for airlines.
There’s a potential benefit of $5 per passenger per year because of this change.
A report from McKinsey in 2020 shows that airlines could earn an extra $5 per passenger each year by using this new approach. This is a big chance that airlines should not miss.
This extra money comes from both making more money and cutting down on costs. Out of the $5 per passenger, about 20% ($1) comes from order management. Some people think that order management is only about saving money, but actually, it helps airlines both earn more and spend less.
Order management is especially important for airlines to make the most of newer systems, like NDC, which helps them sell and manage a variety of extra services from other companies. Airlines that don’t have good order management could struggle to offer new services in the future.
What does the transition to order management look like?
A guide for airlines to modern retailing
Airlines are starting to try out more personalized offers, and they are seeing that it helps them make more money. This is often the first step in changing how they sell travel, and it has clear benefits.
But this is just the beginning.
If airlines want to make more complex offers that include services from other companies and cover the whole travel experience, they need a smooth way to manage orders. Having a good order management plan is really important for airlines to fully transform into modern retailing.
A step-by-step plan to move to order management includes:
- Adding value: Implementing order features, like being able to create seat offers from partner airlines.
- Reducing risks: Making sure the order matches the reference booking (PNR) exactly.
- Learning together: Working with partners to ensure old systems are fully addressed before stopping their use.
This approach helps airlines improve their processes while making sure they are ready for the future.
How can airlines get started with orders?
Getting started with orders is quick and easy, and it can start adding value for your airline right away. Several airlines are already moving towards full order management, and you can too.
A good first step is to work with your technology provider to find out what small, simple changes (called Minimum Viable Product or MVP) can be made. This low-risk approach helps solve existing problems while using your current systems. It works well with Sabre’s step-by-step approach to change, allowing airlines to keep their old systems and add new ones as they move toward full order management.
