When the sixth IATA World Passenger Symposium concluded last week in Dubai, an observer might be forgiven for wondering just how much of the event was really about passengers. Over three days of sessions, scant attention was paid to the onboard experience. Few sessions mentioned seating and comfort other than how to better merchandise them to passengers. But perhaps that is a good thing.
Skipping over those topics allowed the gathered industry experts to focus on some of the more mundane aspects of travel; checked baggage and the terminal experience featured prominently. And unlike some other events, this one saw collaboration and creativity. It featured a hack-a-thon from which real products evolved, and a product pitch where three finalists competed for $35,000 in funding and a slot in a tech incubator. The topics discussed are almost certain to affect travelers more than a new concept seat could.
The implementation deadline for baggage tracking under IATA Resolution 753 is rapidly approaching and this year’s WPS served as an opportunity for airlines and vendors to talk about real solutions available to help meet those requirements. Tracking via paper tags and bar codes will work, of course, but RFID and Bluetooth options are being pitched as well. SITA presented a report, building off data gleaned from Delta Air Lines’ recent switch to RFID for tracking, to suggest that the extra few cents required for each bag would pay off two-fold to airlines nearly immediately.
Permanent digital bag tags were featured in several sessions. ETag pitched hard numbers for its implementation, with a wholesale price point of $20-30 per unit and expectations of sufficiently high take rates to allow a $100mm annual passenger airline to realize more than $200mm in annual benefits – both through lower costs and revenue from the hardware sales – by the end of the decade. The solution includes a full back-end tracking system for the airline, supporting the Resolution 753 requirement and allowing integration into any PSS and DCS platforms. The up front cost for these tags is not trivial but eTag suggested that an airline loyalty program or co-brand partner such as a credit card would subsidize the cost for the branding and data mining opportunities the digital tags represent.
Other concepts, such as integration of the courier services for delayed bag delivery into SITA/IATA’s WorldTracer tracking solution were less refined and less concrete in terms of the ROI. Still, the creativity expressed around baggage challenges and solutions was impressive.
NDC: How, not If
New Distribution Capability (NDC) solutions are hardly new. IATA Resolution 787 defined the specification and the past few years have seen a flurry of activity from airlines, OTAs and integration partners working towards implementations. On that front, an announcement emerged at WPS – Finnair will be selling directly via SkyScanner using the Amadeus NDC platform – but the bulk of the conversation centered on how the new platform can facilitate personalization for consumers, especially as legacy airlines adopt more broadly. That personalization mostly comes in the form of allowing more sales channels for the ever-growing variety of ancillary products airlines offer. Expect to see even the smallest OTA offering pre-paid wifi or meal options, not just seat selection, in the not too distant future.
The NDC conversation often includes mention of the demise of GDS platforms as airlines are able to work directly with the OTAs and travel management companies. The sentiment at the show countered that view, suggesting that far too many smaller agents and airlines will continue to require third-party help with the integration, a task the GDS providers are well suited to address. Finnair’s announcement was validation of this view; the mid-size carrier was unwilling to assume the risk or costs of an in-house implementation given the proven option readily available in the market.
The NDC approach also presents a shift in the way fares are managed. The future of booking classes and fare codes may truly be that they simply cease to exist. The permutations of products and fares is likely to outstrip the legacy filing framework, assuming some other solution arises. This represents the ultimate personalization and customization option for the airlines but also raises questions about transparency in the pricing process. Without published fares or booking codes it will be much easier for the airlines to skew prices per passenger based on prior behavior rather than offer a common price to all customers based on route and schedule. That is a future concern which is relatively far away on the timeline, but given airlines’ penchant for obfuscating fare and fee details today (see “carrier-imposed surcharge”) it does not seem all that unreasonable.
What’s clear is that not everything old is ready to disappear yet; checkin will still be part of the travel process for the foreseeable future, even as it serves little purpose today. All of these changes will impact travelers one way or another. Some sooner than you might think.