Competing with low cost carriers using legacy distribution

TECHNOLOGY AND INNOVATION IN AIRLINE
DISTRIBUTION AND MERCHANDISING 2015
Best of both worlds: Competing with low cost carriers
using legacy distribution

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• Madrid-based airline operating short
and medium-haul flights
• Commenced operations in March
2012 with over 6 million
passengers and 50,000 flights in
its first two years
• Most punctual European airline and
recognized as one of the best in the
world
• Wholly-owned subsidiary of Iberia
• Operates 31 routes in Spain and
Europe, flying 17 Airbus A320
aircraft
• Indra is one of the leading IT
companies in the world both in
consulting and technology.
• 43.000 employees and projects in
138 countries.
• First-class customers worldwide from
all sectors
• Solutions and services for Transport
and Traffic, Energy and Industry,
Public Administration and Healthcare,
Financial Services, Security and
Defense and Telecom and Media
sectors
01 ROADMAP TO DIGITAL EVOLUTION
BEST OF BOTH WORLDS: COMPETING WITH LOW COST CARRIERS
USING LEGACY DISTRIBUTION

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STARTING POINT
First Iberia
Express website
is set out as a
spin off of
Iberia’s.
For it’s go live
day the portal is
just a clone.
MAJOR INCONVENIENCES:
- Not oriented to its own customer
- Heavy content website
- Offer based on legacy carrier
- Architecture based on central
systems.
GOAL:
Create a website
focused on the
customer and ready to
compete with other
LCC and legacy
carriers.
2012

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WEB
STRATEGY
CLOUD
COMPUTING
ENHANCING
DISTRIBUTION
SYSTEM
FAST TIME
TO MARKET
CUSTOMER
ORIENTED
INTERFACE
QUICK
ADOPTION
AFFILIATION
PROGRAM
DEFINING STRATEGY

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WEB STRATEGY: CLOUD COMPUTING WEB
STRATEGY
PNRs generated in a week
 TRAFFIC PATTERNS ARE UNPREDICTABLE:
Marketing campaigns, special sales, daily
behavior impact on infrastructure sizing.
Unfeasible dimension
infrastructure attending only to
traffic peaks

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STRATEGY
= OPTIMIZED
BUSINESS=AGILITY
+
BUSINESS &
IT
ALIGNMENT +SERVICE
FLEXIBILITY
INDUSTRY
STANDARDS
+
CLOUD COMPUTING
= Reduced
Cost
….leverages virtualization, standardization and automation to free up
operational budget for new investment
=VIRTUALIZATION
+ ELASTICITY
+STANDARDIZATION AUTOMATION
+

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 INCREASE OPERATIONAL EFICIENCY: Dynamic scaling improves efficiency offering a
solution to main two problems for infrastructure:
 traffic pattern is unpredictable: there are peaks of request in holidays, due to
special offers…
 users demand for faster responses.
 REDUCE INITIAL COST: Move from application/tenant to user/transaction/volume pricing
in a opex model.
 BUSINESS OUTCOME: To handle budget constraints
 Paying only for the infrastructure you a really using
 Reducing IT operations and maintenance staff
 TIME TO MARKET: Reducing effort, time, staff to provision new infrastructure and
services
CLOUD COMPUTING: gives a technical solution to business
problems on direct channel distribution
STRATEGY

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WEB
STRATEGY
WEB STRATEGY: ENHANCED DISTRIBUTION SYSTEM
ENHANCED BOOKING
EXPERIENCE
BOOKING
FLOW
MANAGER
(BFM)
ENHANCED
SHOPPING
NEW
REVENUE &
CUSTOMER
ATTRACTION
PAYMENT
ALTERNATIVES
ONLINE
CHANNELS
CONVERGENCE
Indra’s BFM is an Integration Platform
that allows integration with external
providers allowing:
• Centralize and simplify configuration
setting from PSS & GDS, Ancillaries
providers and payment gateways.
• Easy and quick offer definition from
marketing and commercial staff.
• Allows personalize product and price
definition.

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WEB
STRATEGY
WEB STRATEGY: ENPOWER DISTRIBUTION SYSTEM
Amadeus
SITA
Sabre
Radixx
Navitaire
Travelport
Psp
INDRA BOOKING FLOW MANAGER
CACHE
FEEDER
XML
SOAP, EDI, CRYPTIC
CUSTOMER
KNOWLEDGE
SOA, XML, REST & HTTP
SOA, XML &
DB ACCESS FILES
ANCILLIARES HUB
CUSTOMER &
COMPANY PROFILE
BUSINESSSERVICES
(REST,SOA,XML)
CALENDAR WS
METASEARCH
DB LOG FILE
WS
RESERVATION
SOA, XML, REST & HTTP
PAYMENT GATEWAY
PSS & GDS
INV: Inventory
RES :Reservation
TKT: Ticketing
DCS: Departure Control
PSP, MCO, EMD
VOUCHER, COST
CENTER
Air Ancilliares
Airline services
External
KPI &
REPORTING
Internet
Local
Loyalty
Air
Services
Hotel
Car
Insurance
CRM
Loyalty
Corporate
External
1to1productandpricecatalog
NDC
PNR
EMD
EXTERNAL
ORDER ID

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DISTRIBUTION & FARING
WEB
STRATEGY
WEB STRATEGY: EMPOWER DISTRIBUTION SYSTEM
PASSENGERCMS CHANNELS
EASY AND QUICK OFFER DEFINITION
MARKETING
 SIMPLIFY DISTRIBUTION
COMPLEXITY: Providing business
services to marketing, commercial
and user interface designer
 POWERFUL INTERFACE: Allowing
access in multiple protocols from
direct access (cryptic) to new
standard (NDC, OTA, E-retail)

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IBERIA EXPRESS: SUCCESS HISTORY
THE HANDICAPS THE GOAL THE RESULT
- Heterogeneous reservation
and distribution system (legacy)
 USAS (Resiber): INV, DCS, TKT
 Amadeus: Reservation
- Fare settlement dependency
with IAG members
- No EMD support (dependencies
with Amadeus implementation
slots)
 New generation business
services handling all direct
channel.
 Fast implementation
roadmap (4 moths)
 New end-user
functionalities not found
on legacy distribution
New booking experience:
 Availability&price: Low price
& upsell
 Ancillaries shopping basket
 New payment and promotion
tools
New affiliation program
Responsive design (mobile,
tablet, desktop)
WEB
STRATEGY

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WEB
STRATEGY
WEB STRATEGY: FAST TIME TO MARKET
 MANAGE CHANGES, CONTROLLING COSTS. change is risk and it is
expensive because it implies rework.
Using Scrum (an Agile methodology) allows us to:
 SMALL DELIVERIES: this not only makes things simple, we have
feedback of these deliveries and the project very often and early, so
if adjustments have to be made they are done in «real- time».
 PAY ATTENTION ON QUALITY: since early steps quality control is
established in the deliver process, including automated tests, users
validation, good design…
 ENHANCE TEAM MOTIVATION: Scrum is focused on collaboration,
implying continuous customer involvement, every member of the
team is aligned with the project goals.

14|
WEB
STRATEGY
Graphical design
Front office
Programming
Indra BFM
Product & Price
Catalog
THE GOAL THE ACTION THE RESULT
Create a new website.
 Implementation 4 month
 New business model
 New affiliation program
 No impact on fare and IAG
agreements
 From design to
implementation in 4
months
 Full cloud implementation
minimum IT operations.
 Full affiliation program.
 Full KPI support to monitor
activity.
From business to implementation
using agile methodology.
 Full Business process redesign
attending customer needs.
 Airline complexity solved using
Indra BFM product
 Strong collaboration with Design
and Front office programming
 Focus on delivery

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WEB STRATEGY: CUSTOMER ORIENTED INTERFACE WEB
STRATEGY
“Reviews and design are very important at the moment to buy on the internet”
Felipe 29, Spain
“One of the most boring things when looking for tickets is having to
add data all over again” Ramiro 24, Brazil
“What is more annoying is the lack of transparency, the extra charges. It has to
be clearer, show me the final price” Francine 29, USA
“With age comfort
inside the plane is
more and more
important”
Lidia 48, Chile
“Airline website should be easier
to figure out”
Ruth 52, Portugal
“I lost a reservation because I couldn’t find the moment to go and pay”
Carlos 42, Mexico
PROFILE CONSIDERATIONS
INDRA AIRLINE E-COMMERCE SURVEY 2013

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STRATEGY
NON-NATIVE
DIGITAL
MOBILE
PROFESSIONAL
YOUNG
EXPLORER
MATURE
HEDONIST
 Consumers are living multiple personalities and thus demonstrating diverse needs
 There exists a greater lack of consistency in their work, home and play ‘profiles’
 Consumer profiling has become an uphill task
 Businesses find it more difficult to understand the varied needs and thus create a
greater gap between themselves and their consumer
INDRA AIRLINE E-COMMERCE SURVEY 2013

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• DEVELOP FEATURE.
• TEST YOUR HYPOTESYS
• INCLUDE BEST PRACTICES
STRATEGY
BUILD
LEARN
MEASURE
• HOW USERS REACT?
• GET FEEDBACK
• IS A PIVOT NEEDED, SHOULD I PRESERVE?
• DID I OBTAINED THE EXPECTED RESULTS?
LEAN + UX:
Learn Fast
Learn Cheap
Indra BFM
KPIs

18|
WEB STRATEGY: QUICK ADOPTION AFFILIATION PROGRAM WEB
STRATEGY
AIRLINES LOYALTY PROGRAM STRATEGIES HAVE EVOLVED OVER THE YEARS, FROM
DISCOUNT COUPONS IN PRESS TO ADVANCED LOYALTY SCHEMAS
Discount coupons
in newspapers and
magazines
Loyalty card by points
•Exchange points for
flights with other carriers
•Diversification and
synergies with hotels, car
rental ...
Loyalty model
by Apps
Personal Loyalty
Model
Customer
Identification Card
Attract and retain customer base with a quick adoption product with
minimum complexity
Affiliation program:
Quick access to discount
with only email required.
- No EMD
- No Special Fares
- Quick promotion
definition

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IBERIA EXPRESS: SUCCESS HISTORY WEB
STRATEGY
THE GOAL
THE ACTION
THE RESULT
Create Iberia Express own
client base: attract and
create a brand impact to
retain them.
Affiliation program to
access discounts: both
guest and registered users
can book a flight, but
registered (“Club Express”
members) get an extra
discount.
100.000 club members in
the first four months.

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4
Months
Project duration
Availability on cloud premises
x4 Bookings through Iberiaexpress.com
+100k Club Express users on first 4 months
99,99%
Functionalities focused on customer needsNEW

SPAIN
Avda. de Bruselas 35
28108 Alcobendas,
Madrid Spain
T +34 91 480 50 00
F +34 91 480 50 80
www.indracompany.com
Indra, We Speak Airlines!

Competing with low cost carriers using legacy distribution

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