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Airline ancillaries: What is working in today’s marketplace


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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

Published in: Travel
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Airline ancillaries: What is working in today’s marketplace

  1. 1. Airline Ancillaries: What’s Working Today? Webinar February 27, 2013
  2. 2. Kevin May Tnooz Editor & Moderator Gene Quinn Tnooz CEO & Producer
  3. 3. Shelly Terry Sabre Travel Network Vice President Panelists Aldo Ponticelli Alitalia VP, Distribution Liz Mandarino World Travel, Inc. President
  4. 4. Poll no. 1
  5. 5. Poll no. 2
  6. 6. Enabling Airline Merchandising Shelly Terry Vice President, Supplier Merchandising Confidential - Not for redistribution without Sabre's prior consent.
  7. 7. mer·chan·dis·ing: n. or v. the planning and promotion of sales by presenting the right product to the right market at the right time….using attractive displays [mur-chuhn-dahy-zing] PRODUCT PLACE PRICE RIGHT CUSTOMER 7
  8. 8. Evolution of Airline Merchandising 8 Published Fares Qualified Discounts Private Fares Targeted Offers Promo Fares Unbundled – Air Extras Bundled – Branded Fares Buyers: Efficiently Shop, Book & Manage Suppliers: Grow Revenue & Differentiate Brand Attractive Displays
  9. 9. 9 Classic View – Alitalia Lounge Passes
  10. 10. 10 Classic View – Alitalia Lounge Passes
  11. 11. 11 Graphical View – Shopping with Air Extras
  12. 12. 12 Graphical View – Shopping with Air Extras
  13. 13. 13 Graphical View – Shopping with Air Extras
  14. 14. Graphical Seat Map – US ChoiceSeats 14
  15. 15. 15 Branded Fares – Qantas Fare Matrix
  16. 16. Customer Requirements Desired Content, Comparison Shopping, Total Price Corp Travel Policy & Negotiated Rates Service Model Operational Requirements Front, Mid and Back Office Agent Training Scripts, Automation Business Model Airline Contracts Client Service Fees Technology Implications Agent POS Customer POS (OTA, CBT) Automation, Back Office, Reporting Buyers Evolving Technology & Processes Agencies & technology developers are making necessary adjustments 16
  17. 17. Airline Tariff Publishing Company (ATPCO) Optional Services (OC) data standard enables significant flexibility and customization. Standards developed through collaboration with airlines, travel agencies, and technology providers. International Air Transport Association (IATA) Electronic Miscellaneous Document (EMD) delivers efficient, accurate fulfillment. Dynamic in nature to meet the evolving needs of the marketplace. 17 Leveraging Industry Technology Standards Enabling broad and rapid deployment of new products & services Open Travel Alliance (OTA) XML Message Standards provide structure and interoperability in electronic messaging between all industry constituents.
  19. 19. Tnooz Webinar Airline Ancillaries: What’s Working in Today’s Marketplace Presented by: Aldo Ponticelli Vice President Distribution, Alitalia February 27, 2013
  20. 20. 20 Ancillary distribution through trade decision Check List BUSINESS MODEL Full Service Hybrid LCC TECHNICAL COMPETENCE AND READYNESS High LowAverage COMMERCIAL STRATEGY Unbundling Hybrid Bundling DIRECT CHANNEL PENETRATION 20% 50% > 80% -+ DISTRIBUTION MODEL Full Content NO Commitment
  21. 21. 2121 Regulatory and technological scenario SCENARIO and PLAYERS • 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. • PSS / CARRIERS: − Main PSS perform standard protocol ancillary sales on direct and indirect channels: • different approach for services booking process (Teletype); • 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; • Not all DCS ready to fully support EMD; • Interline EMD very complex. STILL MISSING
  22. 22. 22 Alitalia ancillary services - strategy and roadmap - TRADE CHANNEL • August 2012: First Market/GDS (ExBag/Lounge) • October 2012: Second GDS (ExBag/Lounge/Fast track/Insurance) • March 2013: Third GDS • 1H 2013: Deployment new services (Seats, Meals) INTERLINE EMD • Deployment after migration to Industry PSS • Full service carriers are modifying their business model to compete with LCC and with High Speed train − unbundling services included in basic fares to better compete on pricing; − offering new services “on demand”; − selling them as “optional”. COMPETITIVE SCENARIO ALITALIA STRATEGY • Pursuing a multi-channel distribution strategy to maximize revenue and availability of ancillary services in all channels. • Distribution of Ancillary services through Indirect Channel (Trade/GDS), addressed a 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. DIRECT CHANNELS • November 2010: EMD-S and EMD-A for Direct sales • December 2011: Fare quote for ancillary services on direct sales. • February 2012: EMD for WEB extra baggage and comfort seat 350K EMD 2011/12
  23. 23. 23 Ancillary Services (EMD) Trade - Services deployment 2012 /13 - Third or additional extra piece Second extra piece Excess weight Excess size First extra piece Standard sport equipment Trip insurance Fast track (FCO/NAP) Lounge access (FCO/LIN/TRN/VCE/PMO/CTA/NAP/JFK) Pre-reserved seat assignment Meal (celebration & premium) Phase 2 . Implemented Jul Aug Sep Oct Nov Dec Jan Feb MarPhases AprProducts Implemented Implemented Implemented Implemented Implemented Implemented Implemented Implemented Status 23 Phase 3 May Jun Phase 1 Implementation for first GDS Alitalia, first adopter of new process developed with Insurance Partner
  24. 24. 24 Markets Ancillary Services (EMD) Trade - Markets deployment 2012/13 - Status Spain Greece UK Belgium Italy Israel Poland Romania Argentina Brazil Venezuela Canada Egypt USA Turkey May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr GDS 2GDS 124 May Jun Alitalia 2nd adopter worldwide with GDS 1 Alitalia 3rd adopter worldwide with GDS 3 Alitalia 2nd adopter worldwide (*) with GDS 2 TBD TBD TBD (*) Between NOT GDS System users GDS 3
  25. 25. 25 Ancillary services “Plus”: a win-win-win solution • Buy in advance.  avoid time loss at the airport; .  have a larger choice (“first-in: best served”) • Service follows ticket evolution (changes, refunds,…) • Pay with all forms of payment (cash / credit card / Invoice). CLIENT • Agency becomes “one shop stop”. • Channel parity. • Use one system (only GDS iso GDS + BSP Link + side platforms). • Paperless. • Integrated in current settlement system (BSP/ARC). • Integrated back office accounting. AGENT • Access to a wider customer market. • Fast growing Service Portfolio enlargement enabled. • Shift effort from Airport to sales process (i.e. excess baggage,…). • 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. CARRIER
  26. 26. 26 “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. PACE & FOCUS Small teams must work at constant and never-stopping pace. PROJECT MANAGEMENT Constant and focused project management activity must be assured. MANAGEMENT Management focus to escalate on possible open issues. INNOVATION Continuous workarounds needed for a successful deployment.
  27. 27. 27 And now we focus on Customer & Sales…
  28. 28. Poll no. 3
  29. 29. Tnooz PANEL WEBINAR Presented by: Liz Mandarino President, World Travel, Inc. Presented on: February 27, 2013
  30. 30. 30 How 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 WORLD TRAVEL ACCOMPLISHMENTS
  31. 31. World Travel awareness initiatives for transparency:  Corporate bulletins  Newsletters  Customer reviews  Client symposiums 31 AWARENESS & EDUCATION
  32. 32. Transparency is key for corporate travel managers  Identifying total cost of travel  All opportunities displayed regardless of distribution channel Continue to stress importance with airlines and government agencies 32 CONTINUED SUPPORT 32
  33. 33. Q & A
  34. 34. Thank you!
  35. 35. Send questions to Kevin May, Webinar replay and slide presentation available at