New modern retailing technology is being adopted by BA and American Airlines to provide their shared interline and codeshare customer base a more smooth customer experience.
The Amadeus Altitude25 conference in Lisbon last week heard how airline partnerships represent a significant amount of carriers’ business accounting for 8% of segments sold and 28% of revenues.
BA and American Airlines have a 25-year relationship which they use to offer their customers a more comprehensive global network, better pricing and access to services like lounges in more airports globally.
Oliver Ahad, BA’s head of offer order solutions, said the partnership now goes beyond increasing OneWorld benefits and the flag carrier today uses around 1,000 flight numbers on AA services. “It’s larger than many individual airlines,” he said.
“It spans more than 50 countries and 27 million seats across the Atlantic. If it were an airline it would be the 16th largest in terms of revenue in the world.
“The reason we do it is to drive a superior customer value proposition, giving customers more choice, more routings, more connections and lower prices. We give them access to a network that no individual airline would by themselves.”
Ahad said the relationship aims to provide a seamless digital service but also convenience in face-to-face interactions with lounges and transiting through hubs, regardless of which airline the customer is flying on.
Anthony Rader, AA director of distribution and offer order management, said that to date innovation in this area had been about taking offline paper processes and digitising them.
But he said that is no longer good enough as the carrier looks to increase its in-house “seamless score” which measures how friction free the customer journey is at every touch point.
“We have improved our grade over the last year or so, but we have reached a tipping point where new technology is needed, and that’s where offer order comes in,” he said.
Ahad added: “Our commercial capabilities and ways of working are constrained by the underlying industry architecture.”
One example is the challenge of selling non-flight products, even basic ones like seats and bags through interline arrangements. “We leave a lot of money on the table by not doing that properly today,” Rader said.
As dynamic pricing becomes more widely adopted airlines have less yield control through partnerships as well as being exposed to the terms and conditions the partner airline places on its products and services.
This means a supplier airline may not know what revenue it has earned until weeks or months after the passenger has flown.
IATA has begun a number of pilot projects having released a whitepaper in 2019 on the future of interlining.
From this a new Standard Retailer and Supplier Interline Agreement (SRSIA) framework was developed to guide the shift to real time automated connectivity between airlines so they can source content from each other without the need for proration.
Rader said AA has been working with Amadeus on an order management system for ancillaries. “Very soon we will have an international point of sale website that puts the user first, cross selling BA. We are very excited about that pilot.”
Ahad said the SRSIA protocols resolve most of the current constraints allowing BA to bundle products from other airlines with the same level of quality as if it’s their own product to make digital retailing much more seamless for the customer.
“As the supplying airline I’m going to have full and total control over the yields I get. I’m also able to determine the Ts&Cs I’m willing to sell through retail partners. I will have full revenue visibility and offer order creation.
“It negates the need for these cumbersome downstream processes. We won’t need to prorate and wont have any billing disputes.”
Ahad added that BA is looking for the highest commercial use cases from its technology and its partnership with Amadeus and the Nevio platform needs to deliver tangible value throughout the transition to modern retailing.
“One of the highest value opportunities is the selling of seats. Soon we will be able to sell seats on AA flights natively through the BA booking flow. That will be live in the next year. Once we’ve done that we can evolve that in to more complex SRSIA us cases.”
Rader added: “Over the next five years you will see the evolution of codesharing. We have reached a point where we are ahead of the standards which leads us then to go back to IATA and drive some conversations there.”
