Amadeus is to make its biggest push yet into the world of airline merchandising, as part of a vision to unlock what it claims is at least $130 billion in revenues for carriers.
The company says tapping into that multi-billion dollar bounty by 2020, according to estimates from its own research and data from IATA and the Frost & Sullivan consultancy, will be possible through a combination of a new Global Merchandising System and overhauling its existing retailing and distribution technology.
A further $55 billion can be captured through existing ancillary sales through direct and other channels, on top the current $51 billion currently feeding into annual revenues from merchandising activities, Amadeus says.
It claims an additional $78.5 billion could be made through "innovation in travel technology" over the same period.
Decius Valmorbida, vice president of distribution marketing at Amadeus, says the company is already working on a "long pipeline" of new technology, in addition to coordinating its existing IT products into a unified system over the "next three years".
In short:
"[The system] will enable airlines to realise their retailing and merchandising vision by giving them the ability to control the price, placement and promotion of ancillary content across all channels."
ALTEA integration
Central to the project will be a process of combining the new merchandising system with its current ALTEA Suite of airline IT services, allowing carriers to join up hosting, servicing, distribution, ticketing, ancillary sales and marketing.
Amadeus calls this a "layer" of services that will be wrapped around existing connectivity.
Airlines not running on the ALTEA IT hosting system will still be given access to the merchandising system, as part of a module-based offering where carriers can pick and choose which elements they need.
IATA's New Distribution Capability also gets a look-in, with the controversial XML industry standards currently under development and testing being included as one of the options for potential connectivity required by some airlines.
It is no coincidence that Amadeus has chosen the IATA World Passenger Symposium in the US this week in order to unveil the project.
Valmorbida says NDC can be an important part of the process to "accelerate the connections" between itself, airlines and intermediaries to achieve the goals it believes are possible through the "next level of merchandising".
One "large, high profile carrier" will shortly be using the NDC standards to connect to Amadeus on some elements of its existing system, Valmorbida says.
Next steps
Whilst the large part of the merchandising "vision" is just that for now (a vision), it is understood engineers and executives have already been working on the technology and modular framework that will underpin it all for the best part of 12 months, a period which coincided with Amadeus cooling (as did Travelport) its concerns over NDC.
Valmorbida says its relationship with travel agents (off and online) is and will remain the same, giving them content and functionality via the new system but with no significant overhaul of technology required.
Its partnership with airlines, however, "changes quite a lot".
Valmorbida says "not every airline will have a clear vision around what it wants to do with merchandising", but essentially if an airline wants to overhaul its existing technology to "take advantage" of the new system then it will eventually be able to personalise the passenger experience and product offer "throughout the entire journey, delivered through every channel by systems that are open, intelligent and dynamic".
The onus, of course, will be on the airlines to collaborate (and pay).
Amadeus believes, however, its existing relationship with more than 100 carriers on the hosting end of the IT spectrum will play a major part on persuading airlines to participate.
Landscape
Travelport launched its Merchandising Platform in April 2013 and has since secured deals with 60 carriers (including Delta, British Airways, United, EasyJet and Ryanair) across its various elements, such as ancillary sales technology and rich content and branding services to agencies.
It was the availability of that platform which helped it woo Ryanairback into the world of third party distribution in March this year, a process the carrier repeated in September through Amadeus.
Amadeus and Travelport rival Sabre has its own merchandising efforts with the ability for carriers to push Air Extras (some ancillary services) and Branded Fares to connected agencies.
NB:Aircraft runway image via Shutterstock.