The journey to legacy-free offers and orders is not expected to be easy, as only half (49%) of respondents of a recent survey, conducted in collaboration with the International Air Transport Association (IATA), expect the milestone to be reached by 2030 (more details here).

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To gain a competitive edge, airlines must speed-up IT modernization, manage a hybrid transition, and adapt processes while ensuring tangible value creation from these investments. Understanding the key challenges and the opportunities on the horizon is mission critical, so let’s unpack them.

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Grounded Indefinitely

Rigid GDS communication protocols, reliant on a messaging standard from the 1980s, are blocking personalisation and data flexibility. This outdated standard was designed for seat and fare transactions, not the dynamic options modern travellers expect.

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Monolithic PSS compounds these issues, preventing modularity and causing vendor lock-in issues. As personalisation become increasingly linked to customer loyalty and revenue opportunities, inflexible protocols prevent airlines from operating like modern retailers.

Fare-based static pricing models block crucial AI progress, especially when it comes to AI-driven continuous pricing. Filed fares and fare classes are updated in advance and distributed via GDS, trapping airlines in a cycle of revenue leakage and sub-optimal margins.

Fragmented omnichannel journeys complete the concerning picture, which dissatisfy modern airline customers, cause upselling opportunities to be missed, and present opportunities for third-party competitors to make gains.

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New Horizons

Airlines need to reimagine themselves as digital travel retailers, not just seat sellers. This means doubling down on personalisation, implementing dynamic bundling, and making continuous pricing anew standard.

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This is where the five major technology enablers come in:‍

• API-driven integration and NDC aggregators: decouple from GDS and unify key channels.
• Dedicated personalization and customer data platforms (CDPs): create a central brain for dynamic offers.
• Pricing and bundling platforms: enable continuous pricing and recommendation engines.
• Revenue management evolution: enhance ancillaries and multi-segment journeys with AI and ML.
• Product catalogue, stock keeping and order management: lay the foundations for modular, flexible retailing.

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When it comes to technology sourcing, there are different strategic pathways to take – and a mixed approach is likely optimal. In-house development means greater speed-to-value, but this route is costly and comes with heavy integration requirements.

Co-development with incumbent vendors is another option, offering best practices and standards but lacking pace. Modularization with vertical solutions is the third, whereby non-airline vertical tech is leveraged to accelerate maturity. Our experts are uniquely positioned to help guide you on selecting the right blend.