Today Skyscanner and British Airways began trial sales of seat upgrades using IATA's New Distribution Capability (NDC) standards.
British Airways is the first global airline to sell seats directly via its own NDC gateway, and the Scotland-based Skyscanner is the first metasearch company to offer the tickets through a facilitated booking platform.
Skyscanner says:
"In this initial, phase-one trial, BA will distribute ticket-only sales on UK mobile devices, as well as France, Germany and Switzerland (all devices), including a choice of fare upgrades, working with Skyscanner’s facilitated booking capability.
However, further phased roll-outs will allow customers to purchase the full range of BA ancillary products such as allocated seating and additional baggage, as well as cabin upgrades, across a multitude of further markets and devices."
Sara Dunham, BA’s head of marketing, retail and direct, said in a statement that the move will only apply to its ticket upgrades via Skyscanner’s facilitated booking engine. She added:
"In the future the airline is aiming to offer customers the ability to buy the full range of ancillary options, such as allocated seating and additional baggage through the travel search site."
To learn more about this -- and to find out what else is happening at Skyscanner -- Tnooz caught up with CEO Gareth Williams while he was attending the Phocuswright Conference.
The interview has been edited for brevity and to make my questions sound more intelligent.
Tnooz: Is this an add-on?
Williams: In terms of BA, we're not seeing facilitated booking as an add-on with a preferred partner.
Our goal, instead, is to surface the booking engine of every travel supplier within our app. Especially our app but also our website. We'll start with air, and eventually add hotels.
It's an engine that isn't a one-off. It's not competing with other suppliers. Instead, it's a means for travel suppliers to reach customer but to get the version that's possible when it's an integrated experience.
Tnooz: Understood.
Williams: Airlines get that we're trying to build this platform in the way that NDC was originally intended. It's a means of surfacing their whole system in front of the consumer -- even if it's not ba.com, for instance.
We're delighted to be working with BA. But it's not just about BA.
A large set of airlines are also doing work on adopting NDC standards. Skyscanner can now easily publish and process any NDC-ready provider's tickets and ancillaries through its booking platform.
It's been a top priority for us to offer ancillary streams means to show the full range of products and services offered by carriers, while making it easier for our customers to fully comparison-shop.
Tnooz: This is just for Europe?
Williams: No, this will eventually be global. There's 100 million Chinese outbound travelers each year now. They want to be out to book travel, not only getting abroad but when they're actually in Europe or the Americas.
So our NDC operations are as much geared towards reaching audiences that many airlines simply aren't reaching right now.
Skyscanner has a global approach. It means the work we do in Europe with BA then becomes valuable to the work the team at our Chinese site Tianxun are doing and their collaboration and efforts with other partners, etc.
With a global audience and a global supplier base, we get the opportunity to actually bring more than the domestic traveler to the domestic airline.
Tnooz: We recently reported that Skyscanner is testing travel search integration with Amazon’s Echo system, allowing people to find flights using just their voice. It's still in a test environment, right?
Williams: Yes, internally we've got the voice engines working pretty well with all our data. We worked with Amazon and Alexa Echo on prototypes, integrating voice search.
It's a pretty interesting direction for us. I would like us to be pairing all constructed queries via voice, weather it be on Siri, Cortana, or Alexa.
We've got the comprehensiveness of data, and you can demonstrate the semantic interpretation of the quires to actually connect it all together. That sounds technical, but it will only become more important over time and unlock huge consumer value -- reducing friction and boosting conversion.
Tnooz: Got it.
Williams: I heard that 16 or 18% of Chinese travelers had used voice search in relevant apps. I realize that voice search is often seen as something that's a bit like the year of mobile, something that is always going to come but takes forever to arrive.
Yet more than 16 to 18% of Chinese -- there are probably higher, more recent figures available -- have experienced voice engine search. This is happening now. Some Chinese travel apps use voice engines now.
The point I am making is that the use cases, the usage patterns are being demonstrated as often in China if not more often than in Europe or the Americas. That's an indication to me that voice search is going to become mainstream.
Tnooz: What about mobile payments?
Williams: The way I see it is that we make the booking engine of a thousand travel suppliers available from a single app. As part of that, we have to have, well, some parts of that, we've passed it straight through.
But there are plenty of these cases where we need to take the money and then to pay it to the agent and us supporting the Chinese user booking a low-cost carrier in Europe is an example where actually we need to kind of handle things.
Doesn't mean we're merchant-of-record, but we certainly need to handle some things.
Tnooz: Last year Skyscanner acquired Youbibi, a Chinese travel search company, which it has rebranded as Tianxun, the name for Skyscanner in China. I'll butcher the pronunciation of that as Chin-cuhun. Anyway, how has Tianxun been going?
Williams: Really well, it's a really strong team they've merged with an existing team that's based in Beijing. We've grown traffic very significantly.
We don't generously break it down by country but it's one of our significant growing regions and they're building technology that is not only for the Chinese traveler but we're also leveraging in the global platform so I'm very happy with that.
Tnooz: At the higher level, how has Skyscanner been differentiating itself from other players lately?
Williams: We're one of the best converting and most economically successful platforms for distributions to the suppliers in the industry that exists, bar none.
Under a advertising option system the advert price will rise to the price of marginal profitability. We consistently deliver way lower costs.
Part of that is that we have a relatively small company with low costs for ourselves. The other reason is we're not part of the global distribution system arena, with all the kickbacks and segment fees that that involves.
So distribution via Skyscanner is unparalleled in how cheap it is for airlines.
That's what the Internet is supposed to bring. Lots of customers, globally available at a click hotels the commission can go up to 25% revenue represents probably an average of 2% total ticket value.
That's an order of magnitude different and we could be a successful company on that basis alone, though we have other engines of growth.
Tnooz: Is there anything you can say about the mix of products?
Williams: Yeah we're still 85% air revenue.
Tnooz: Investors have a sort of knee-jerk reaction to air. They see it as a commodity that doesn't offer high enough margins for growth. Is part of the NDC merchandising an effort to make air more lucrative?
Williams: We've been self-funded since 2008 and profitable since 2009. That is entirely in the context of air.
So we think that provided your advertising, your marketing costs are not too great that you can create sustainable business in air alone.
We're still really interested in increasing the amount of hotels that we do.
But we're also interested in areas that make 0 money. Destination selection is something we're very interested in. There is no direct monetization for that, so it's concentrated on value for the traveler.
Tnooz: Anything in advertising or media that works with suppliers for customers that end think of the listings as research in a way?
Williams: We're committed to giving suppliers the ability to reveal what is most important to them to be at the forefront of their travelers minds. That will come through in quite a lot of our product features in 2016.
Tnooz: Asia is a huge, growing center of gravity. Is there anything in terms of things that you're learning user experience in China or elsewhere that you can bring back into the brand's products globally?
Williams: There's a called the emerging global web. (This reminds me of what my kids say, "Search it up.")
Tnooz: Cute.
Williams: We want to bring innovations from Asia into our full product set, yes.
Tnooz: What about app versus mobile web?
Williams: They're both important. The app is potentially better for a long-term, repeat customer. But essentially the proportion of travel purchase on your phone and I think companies in Asia are demonstrating it far better than many companies in online travel in North America.
Tnooz: Handling product development like this NDC interface for BA is complex. Because you've hired a lot of people -- you're now at 700 employees. How are you able to push down messages about transparency or best practices into the organization?
Williams: A while back we adopted some of the Spotify methodologies. The fundamental idea is that people should learn not only about the creation of a product but also about the operation. We operate in teams of up to 8 and they're cross-functional.
We have an internal open source methodology. So these are all ways in which we can get collaboration across quite diverse geologies. That speeds up development and keeps us close to solving problems that are truly relevant to our suppliers and travelers.
EARLIER:
Is the travel industry ready to embrace NDC?
Skyscanner to provide voice flight search for Amazon Echo
Four months ago: Skyscanner talks about its joint venture with Yahoo Japan
February 2015: Skyscanner aims high in Asia-Pacific as strategic buy and partnerships kick in