During a media day hosted recently by Farelogix in the US, Keith Wallis from Air Canada showed a few slides on his airline’s view of the future.
In his presentation, was a "Before" and "After"-type view of how the carrier views the Passenger Service System (PSS).
Wallis presented a different view from the conventional world that has been pursued in airline IT for some time, being that the PSS is at the heart of the airline’s customer operations.
While this will not fundamentally change – you need a PSS to operate any airline – the change from Air Canada represents a view that the one size fits everything model is not valid for every airline and decidedly not for carriers wanting to differentiate themselves from the herd.
The concept that the PSS needs to be one single homogenous solution using common technology with the GDS platform has long been espoused by both Sabre and Amadeus.
Yet the very nature of the dissatisfaction (from a technical perspective) that the airlines have with the GDS can apply to the core PSS systems. If one looks back at the investments made by the airlines over the past 17 years, much of it has been in web-based technologies and associated non-core inventory systems.
This new direction from Air Canada - as seen in part with its relationship with Travelport using the Agencia platform - represents a different approach and perhaps bears some consideration by other airlines who are evaluating their PSS strategies.
As airlines take a different approach to ancillaries and indeed to the marketing of their products, a one size fits all approach clearly causes many issues.
The scramble for competitive advantage between airlines will become more and more acute as they aim for de-commoditization of their product lines. Looking at the new architecture for Air Canada – you can see where it is headed.
First slide represents what it has in place today.
Airlines have been very frustrated with the narrow pipes they are forced to use for intermediary distribution. American Airline’s Cory Garner, speaking via a taped video interview, explained the need for "fibre optic" pipes to provide the best content to all its travel agency partners, particularly the corporates.
He continued:
"A travel agency, a corporate travel agency that uses a GDS on the back end is going to need a fibre optic pipe to get access to the best content that we have. And we want a corporate travel agency to have the best content we have.
"And that means we need to get the direct connect pipe, piped in behind the GDS so that the corporate customers can use that content."
For the consumer more commonly used to a comparison shopping experience, this change in direction will also cause a certain degree of consternation.
The useful lowest fare shopping tools will become more complicated and very hard to decode for the causal shopper. This is not just a user experience issue either
Airlines will take different approaches to their PSS strategy - some will continue to build solutions which are unique, like American and Air Canada.
Others will segment the PSS into inventory and selling-based systems. Others unsure of how to handle it (typically smaller carriers) will be happier to let the experts of the PSS vendors handle it for them.
Which approach is right for which airline is as unique as the airlines themselves. In the case of Air Canada, we can see that it is pursuing a very clear and independent solution.
At the Farelogix meeting, the Florida-based company announced a new tool for managing all forms of distribution internal and external. Called Airline Commerce Gateway, it creates a different model for how distribution is managed.
Putting itself into that market squarely may change how the GDS replacement service is perceived by the airlines from a technology point of view. This potentially is a real harbinger of a change to the way that airlines want to connect to distribution channels as well as better managing their own internal systems.
I believe that we have to take the view that the days of a homogeneous air transport product and content system is over, as airlines want solutions that will be differentiated and numerous.
The challenge for intermediaries will be how to present AND manage customer based solutions from different suppliers when faced by a plethora of different commercial distribution models.
Travel agencies and airlines are going to have to equip themselves with better access to content/product as well as arming themselves with new tools to deliver value to their users – direct as well as indirect.
PSS, GDSs, as well as third party providers of these tools like Datalex and OpenJaw Technologies, are stepping up their game.
Welcome to the real world of retailing.
NB: Disclosure - LUTE Technologies is a partner of Farelogix.