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Airline ancillaries: What is working in today’s marketplace



New airline ancillary products and the technology and processes behind them are a fascinating and vital part of how the travel industry is evolving. ...

New airline ancillary products and the technology and processes behind them are a fascinating and vital part of how the travel industry is evolving.

Three innovative travel brands share insights about recently released capabilities and the best practices for integrating these services into a managed travel program.

On this 60-minute webinar, you’ll hear how airlines are enhancing their products and learn from industry practitioners about what it takes to actually bring them to market.

Technology providers, travel suppliers, travel agencies, and travel buyers should bring their questions and comments for this interactive sessions with our panel of experts.

Featured presenters:

Shelly Terry, Vice President, Sabre Travel Network
Aldo Ponticelli, Vice President Distribution, Alitalia
Liz Mandarino, President, World Travel Inc
Kevin May, Editor & Moderator, Tnooz
Gene Quinn, CEO & Producer, Tnooz



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  • While you might find slight variations in the definition, merchandising is a standard marketing term that describes how suppliers of goods and services get the RIGHT product at the RIGHT price at the RIGHT time to the RIGHT customer.Merchandising is not new, and in fact, Sabre has been helping travel suppliers merchandise their products and services through the travel agency channel for years. Low fare search, negotiated and private rates, hotel and car amenity shopping, advertising and media products, etc.
  • Stress the point that a large % of our bookings come thru online travel agency websites, corporate booking tools, other booking tools using our web services We’ve built the infrastructure (building the interface on top of it is the minor issue)...(can be response to why we cannot ‘show’ them at this moment.... We have built it...(it’s tough to demonstrate infrastructure)... In fact, large majority of what we’ve done to support ancillaries is infrastructure (that’s why I’ll show screen shots... The shelves aren’t stocked yet)...building the interface is the more minor effort

Airline ancillaries: What is working in today’s marketplace Airline ancillaries: What is working in today’s marketplace Presentation Transcript

  • Airline Ancillaries:What’s Working Today? Webinar February 27, 2013
  • Kevin May Gene QuinnTnooz TnoozEditor & Moderator CEO & Producer
  • PanelistsShelly Terry Aldo Ponticelli Liz MandarinoSabre Travel Network Alitalia World Travel, Inc.Vice President VP, Distribution President
  • Poll no. 1
  • Poll no. 2
  • Enabling Airline MerchandisingShelly TerryVice President, Supplier Merchandising Confidential - Not for redistribution without Sabres prior consent.
  • mer·chan·dis·ing: n. or v. [mur-chuhn-dahy-zing] the planning and promotion of sales by presenting the right product to the right market at the right time….using attractive displays PRODUCT PLACE PRICE RIGHT CUSTOMER7
  • Evolution of Airline Merchandising Unbundled – Air Extras Bundled – Branded Fares Published Promo Qualified Private Targeted Fares Fares Discounts Fares Offers Attractive Displays Buyers: Suppliers: Efficiently Shop, Grow Revenue & Book & Manage Differentiate Brand8
  • Classic View – Alitalia Lounge Passes9
  • Classic View – Alitalia Lounge Passes10
  • Graphical View – Shopping with Air Extras11
  • Graphical View – Shopping with Air Extras12
  • Graphical View – Shopping with Air Extras13
  • Graphical Seat Map – US ChoiceSeats14
  • Branded Fares – Qantas Fare Matrix15
  • Buyers Evolving Technology & Processes Agencies & technology developers are making necessary adjustments Customer Operational Business Technology Requirements Requirements Model Implications Desired Content, Comparison Front, Mid and Agent POS Shopping, Total Back Office Price Airline Contracts Corp Travel Customer POS Policy & Agent Training (OTA, CBT) Negotiated Rates Client Service Fees Automation, Scripts, Service Model Back Office, Automation Reporting16
  • Leveraging Industry Technology Standards Enabling broad and rapid deployment of new products & services Airline Tariff International Air Open Travel Alliance Publishing Company Transport Association (OTA) XML Message (ATPCO) Optional (IATA) Electronic Standards provide Services (OC) data Miscellaneous structure and standard enables Document (EMD) interoperability in significant flexibility delivers efficient, electronic messaging and customization. accurate fulfillment. between all industry constituents. Standards developed through collaboration with airlines, travel agencies, and technology providers. Dynamic in nature to meet the evolving needs of the marketplace.17
  • Tnooz WebinarAirline Ancillaries: What’s Working in Today’s MarketplacePresented by:Aldo PonticelliVice President Distribution, AlitaliaFebruary 27, 2013
  • Ancillary distribution through trade decision Check List + - BUSINESS MODEL Full Service Hybrid LCC DISTRIBUTION MODEL NO Full Content Commitment COMMERCIAL STRATEGY Unbundling Hybrid Bundling DIRECT CHANNEL PENETRATION 20% 50% > 80% TECHNICAL COMPETENCE AND High Average Low READYNESS20
  • Regulatory and technological scenario • IATA: − V-MPD target phase out by end of 2013 (IATA StB The road to 100% EMD in BSP); − service booking process definition open to different interpretations (SSR+ASVC or ASVC) while stricter EMD standard is available (RESO 725G+AIRIMP). • ATPCO: − detailed standard optional services list available (IATA RP1790); − service codes proliferation. SCENARIO • PSS / CARRIERS: and − Main PSS perform standard protocol ancillary sales on direct and indirect channels: • different approach for services booking process (Teletype); PLAYERS • standard EMD product (Edifact). − Some PSS developed API/web services to selectively distribute ancillary contents; • GDS SSR: − some GDS support SSR ASVC stand alone only; − some other support IATA STANDARD SSR or BILATERAL SSR + ASVC only; − some developed API content feed. • GDS EMD: some support associated EMD only, others both associated and stand-alone. • BSP/ARC: support EMD standards (not all Markets have been implemented). • Unique standard service booking process; STILL • Not all DCS ready to fully support EMD; MISSING • Interline EMD very complex.21
  • Alitalia ancillary services - strategy and roadmap - • Full service carriers are modifying their business model to compete with LCC and with High Speed train COMPETITIVE − unbundling services included in basic fares to better compete on pricing; SCENARIO − offering new services “on demand”; − selling them as “optional”. • Pursuing a multi-channel distribution strategy to maximize revenue and availability of ancillary services in all channels. ALITALIA • Distribution of Ancillary services through Indirect Channel (Trade/GDS), addressed a STRATEGY multitude of users, in low demand market, with current direct sales penetration is considered as more convenient than an alternative policy of content differentiation through channels. • November 2010: EMD-S and EMD-A for Direct sales 350K DIRECT • December 2011: Fare quote for ancillary services on direct sales. EMD CHANNELS • February 2012: EMD for WEB extra baggage and comfort seat 2011/12 • August 2012: First Market/GDS (ExBag/Lounge) TRADE • October 2012: Second GDS (ExBag/Lounge/Fast track/Insurance) CHANNEL • March 2013: Third GDS • 1H 2013: Deployment new services (Seats, Meals) INTERLINE EMD • Deployment after migration to Industry PSS22
  • Ancillary Services (EMD) Trade - Services deployment 2012 /13 - Products Phases Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Status First extra piece Implemented Second extra piece Implemented Third or additional extra piece Implemented Excess weight Implemented Phase 1Excess size ImplementedStandard sport equipment Implemented .Trip insurance ImplementedFast track (FCO/NAP) ImplementedLounge access (FCO/LIN/TRN/VCE/PMO/CTA/NAP/JFK) ImplementedPre-reserved seat assignment Phase 2Meal (celebration & premium) Phase 3 Alitalia, first adopter of new process developed with Insurance Partner 23 23 Implementation for first GDS
  • Ancillary Services (EMD) Trade - Markets deployment 2012/13 - Markets Status May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunItalySpain Alitalia 2nd adopterUK worldwide with GDS 1Belgium TBDGreece AlitaliaPoland 2nd adopter worldwide (*)Romania with GDS 2IsraelTurkeyUSA TBDArgentina AlitaliaBrazil 3rd adopter worldwide withVenezuela GDS 3Canada TBDEgypt GDS 1 GDS 2 (*) Between NOT GDS System users GDS 3 24 24
  • Ancillary services “Plus”: a win-win-win solution • Buy in advance.  avoid time loss at the airport; . CLIENT  have a larger choice (“first-in: best served”) • Service follows ticket evolution (changes, refunds,…) • Pay with all forms of payment (cash / credit card / Invoice). • Agency becomes “one shop stop”. • Channel parity. • Use one system (only GDS iso GDS + BSP Link + side platforms). AGENT • Paperless. • Integrated in current settlement system (BSP/ARC). • Integrated back office accounting. • Access to a wider customer market. • Fast growing Service Portfolio enlargement enabled. • Shift effort from Airport to sales process (i.e. excess baggage,…). CARRIER • Open to all Form of Payment (in the average cheaper than credit card). • Money collection secured in current settlement system (BSP/ARC). • Timely and reliable Revenue Accounting. • Reduced fraud risk.25
  • “Soft” Critical Success Factors COMPETENCES Functional and IT Teams must rely on deep process and system knowledge. PARTNERSHIP “It takes two to tango”:GDS/Airline teams must reach high level of trust/harmonization. INNOVATION Continuous workarounds needed for a successful deployment. PROJECT MANAGEMENT Constant and focused project management activity must be assured. PACE & FOCUS Small teams must work at constant and never-stopping pace. MANAGEMENT Management focus to escalate on possible open issues.26
  • And now we focus on Customer & Sales…27
  • Poll no. 3
  • Tnooz PANEL WEBINARPresented by:Liz MandarinoPresident, World Travel, Inc.Presented on: February 27, 2013
  • WORLD TRAVEL ACCOMPLISHMENTSHow our company has supported this effort: Advocates for public consumers and corporate clients Attended two DOT meetings along with several clients Only TMC representing travel community WTI customers only consumers present Panel member with Open Allies at the Press Club along with our valued customer Darla Montalto, the Travel Manager from MLB 30
  • AWARENESS & EDUCATIONWorld Travel awareness initiatives for transparency:  Corporate bulletins  Newsletters  Customer reviews  Client symposiums 31
  • CONTINUED SUPPORTTransparency is key for corporate travel managers  Identifying total cost of travel  All opportunities displayed regardless of distribution channelContinue to stress importance with airlines andgovernment agencies 32
  • Q&A
  • Thank you!
  • Send questions to Kevin May, kevin@tnooz.comWebinar replay and slide presentation available at www.tnooz.com