Breaking the Monolith: the Tech Architecture Behind Modern Retailing
The future of airline retailing is ready for take-off. But which players will be on board, and which will miss the flight?
The journey to legacy-free offers and orders—moving beyond traditional fare and ticketing constraints toward dynamic retailing and a unified order-based journey—is not expected to be easy, with only half (49%) the respondents in a recent survey, conducted in collaboration with the International Air Transport Association (IATA), expecting the milestone to be reached by 2030 (more details here).
To gain a sustainable competitive edge, airlines must move beyond incremental IT upgrades and fundamentally rethink how commercial capabilities are enabled. This requires unbundling and modernizing commercial IT and data to break legacy constraints, while managing a pragmatic hybrid transition where legacy and modern retailing capabilities coexist. Critically, success will not be driven by process redesign alone, but by anchoring technology and transformation investments on clear business outcomes—such as revenue uplift, margin resilience, conversion and customer lifetime value—rather than on process outputs or technical milestones. Understanding both the challenges and the opportunities on the horizon is mission critical, so let’s unpack them.
Grounded Indefinitely
Rigid GDS communication protocols, reliant on a messaging standard from the 1980s, are blocking personalization and data flexibility. This outdated standard was designed for seat and fare transactions, not the dynamic options modern travellers expect. Monolithic PSS compounds the issues presented by rigid protocols, preventing modularity and causing vendor lock-in issues. As personalisation becomes increasingly linked to customer loyalty and revenue opportunities, inflexible protocols prevent airlines from operating like modern retailers.
Fare-based static pricing models block revenue growth enabled by AI progress, especially when it comes to continuous, AI-driven 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 other travel players—such as online travel agencies (OTAs) and accommodation & experience platforms—to capture value that airlines could otherwise capture themselves.
These limitations become even more pronounced as airlines attempt to move beyond traditional ancillaries toward broader travel bundling—including hotels, car rentals, transfers, insurance, and other third-party services. While these ecosystem bundles represent a significant revenue unlock, they also introduce new architectural complexity. Delivering and servicing such integrated offers requires more than distribution flexibility: it demands an enhanced integration and data layer capable of real-time, API-driven fulfillment across external partners.
New Horizons
Airlines need to reimagine themselves as digital travel retailers, not just seat sellers. This means going beyond compliance with IATA standards like NDC and ONE Order, while truly embracing a commercial mindset centered on dynamic bundling and continuous pricing across the broader travel ecosystem—not limited to the core flight and traditional ancillaries, but extended to integrated third-party services and end-to-end travel experiences.
The rules for interoperability are defined, but the next frontier is about execution: building the modular, API-driven architectures that can actually deliver retailing at scale. This is where the five major technology enablers come into play:
- Product catalogue, stock keeping and order management form the operational backbone for modular, flexible retailing, allowing airlines to manage product definition, availability, and fulfillment with the same agility as modern e-commerce players
- Offer management platforms enable flexible definition of commercial propositions, from dynamic bundles to promotional mechanics, ensuring consistency across all distribution channels
- Revenue management evolution drives the adoption of dynamic pricing in customizable bundles and continuous pricing, leveraging AI and machine learning to dynamically adjust fares and maximize revenue across customer segments and contexts
- Dedicated personalization and customer data platforms (CDPs) act as the central “commercial retail brain”, integrating behavioral and transactional data to deliver tailored, context-aware offers and product configuration
- API-driven integration and NDC aggregators facilitate the decoupling of airlines from legacy GDS environments, enabling seamless distribution of advanced offers across direct and controlled channels
Combined, these components will allow airlines to deliver a dynamic, customer-centric shopping experience, built around personalized offers and an e-commerce–like shopping cart.
Achieving this shift, however, requires proper technology choices. When it comes to technology sourcing, airlines have multiple strategic pathways—from in-house builds to co-development with incumbent vendors. But the most effective approach is often composable and hybrid: combining proven, off-the-shelf products for standard capabilities with selective bespoke components that preserve differentiation and flexibility.
Our experts are uniquely positioned to help guide you in defining this journey, and in selecting the right blend of technology, partners, and strategy to make it a reality.
Don’t Leave Your Retail Strategy on the Tarmac
Transformation ultimately calls for a tech strategy that is modular, incremental, AI-first. This is because legacy GDS and PSS architectures are tightly interwoven, significantly increasing the operational risk associated with sweeping changes.
Based on our extensive experience, we recommend a five-step roadmap to accelerate the transition toward modern airline retailing:
- Establish NDC and introduce new ancillaries: lay the foundation for modern retailing by introducing NDC channels and introducing new ancillaries’ product families
- Introduce a foundational Order Management capability: decouple commercial orders from the traditional PNR by implementing an OMS as a single source of truth for the customer order—loosely decoupled from legacy PSS and future stock keeping systems, yet flexible enough to extend beyond flight and ancillary products and unlock short- to long-term value
- Broaden bundling and introduce rule-based pricing with integrated stock management: move beyond static fares by combining core and ancillary products into tailored bundles, supported by a unified view of inventory and availability, first and third parties
- Activate dynamic bundling and real-time personalization: leverage AI-driven pricing and behavioral insights to deliver contextual offers, and adapt to customer needs and commercial priorities in real-time
- Realize a fully dynamic, order-based retailing ecosystem: complete the transition by replacing legacy PSS processes with a seamless, “one order” environment that enables true end-to-end retailing agility
This is not about technology in isolation, but about commercial transformation and agility: the ability to test, scale, and monetize new products faster than competitors. The airlines that succeed will be those that look beyond standards, adopt a bold yet incremental roadmap, and treat retailing as a strategic capability (rather than a regulatory requirement). Make modern airline retailing your next growth engine—let’s talk about how. Reach out to our experts below.
¹ IATA & Boston Consulting Group, Airline Retailing: Unlocking Revenue and Reducing Distribution Costs, industry survey and analysis, 2022–2024.
