By Rajeev Kumar, Founder, MD & CEO, Mystifly
In recent times, the airline sector has undergone significant changes, driven by technological advancements, evolving preferences of air travellers, and global economic shifts that are reshaping operational strategies within the industry.
One notable transformation within the airline industry is in the realm of airline retailing. Historically centered around ticket sales and basic in-flight services, airline retailing has experienced a profound evolution. Airlines are now swiftly broadening their retail offerings to deliver personalised, seamless, and value-added experiences for their passengers. The landscape of the industry is being shaped by automation and innovation, not only charting the course ahead for travel but also accelerating the trajectory of the entire aviation sector.
Evolution in airline retailing
For several decades, the airline industry has relied on traditional shop-book-ticket processes. However, there has been a noticeable shift towards a more comprehensive approach that encompasses the end-to-end process of Offer, Order, Settlement, and Delivery (OOSD). Airlines are pursuing diverse distribution strategies – including New Distribution Capability (NDC) – both in and outside of traditional GDS systems. Companies like Mystifly in the travel technology sector are actively developing technologies to create a unified platform, serving as a one-stop shop for travel sellers to sell and service air from any source.
Throughout most of the industry’s history, airlines heavily relied on ticket sales as their primary revenue source. Yet, intensified competition and narrowing profit margins in the late 2000s compelled airlines to seek additional income streams by offering ancillary services such as baggage fees, priority boarding, in-flight meals, and seat upgrades. This shift marked the beginning of a more retail-focused strategy, which has continued to grow and accelerate over the past decade.
In recent years, airlines have leveraged technology and data analytics to gain a deeper
understanding of their customer’s preferences and behaviors. This capability has empowered them to provide personalised experiences and services, reshaping air travel into a more customer-centric process. The emergence of online booking platforms, mobile apps, and digital communication channels has enabled airlines to interact with passengers at multiple touchpoints, thereby elevating the overall retail experience.
AI transforming personalised travel
Artificial intelligence (AI) is leading a transformative era in aviation, with an anticipated Compound Annual Growth Rate (CAGR) of 46.4% by 2023. Airlines are leveraging AI and machine learning to deliver tailored travel experiences, utilising social sentiment analysis to enhance passenger satisfaction. Concurrently, the aviation industry’s growing reliance on big data is influencing strategic decision-making.
The democratisation of data allows airlines to anticipate and predict consumer behavior, aligning strategies for optimal efficiency. The synergy of big data analytics with AI and machine learning empowers airlines to develop robust plans based on factual insights, shaping the future of personalised and data-driven air travel experiences.
Way forward
The rise of the metaverse is on the verge of transforming the travel industry, fundamentally
reshaping the way we engage with and perceive travel experiences. Virtual and augmented reality are introducing immersive travel encounters that have the potential to redefine how travelers plan their upcoming vacations. This paradigm shift will bring substantial benefits to both travel agents and hosts. While verbal descriptions of destinations can be impactful, the integration of virtual and augmented reality experiences has the power to revolutionise the industry. These immersive encounters expedite decision-making, eliminating prolonged contemplation and leading to faster booking processes.
The technologies of augmented reality (AR) and virtual reality (VR) can authentically recreate a wide range of travel scenarios, from exploring distant islands to close-up interactions with wildlife on safari or historic landmarks. The essence of these technologies lies in their ability to provide a truly & immersive experience. In the past, mere photos and brief videos were sufficient to capture a visitor’s interest.
Now, these state-of-the-art technologies transport visitors directly to hotels, restaurants, tours, attractions, or destinations virtually. The novelty of this technological advancement adds a layer of experiential depth, representing a departure from traditional methods to the contemporary world of bots.
Future advances demand new infrastructure
As we witness the advancements shaping the future of air travel, it’s crucial to acknowledge the underlying challenge – an aging distribution infrastructure that has been in place for over 50 years. Despite commendable initiatives like NDC, OOSD, and progress in cloud technology, a complete transformation is still in progress. Predictions indicate it will be another 10-15 years before Passenger Name Records (PNRs) give way to more modern systems like orders. In this transition, solutions such as smart selling platforms, that source, sell, and service on a single platform exemplified by new-age travel technology companies like Mystifly, play a pivotal role in bridging the gap, providing essential support in the evolving hybrid landscape. This highlights the ongoing need to modernise and streamline distribution infrastructure to fully unlock the potential of future advancements in air travel.