Airline Digital Retail:
Vendors’ View on Challenges and Opportunities of the Covid Crisis

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Originally published by Travel in Motion on 19/10/2020

Bryan Porter, Chief Commercial Officer of OpenJaw Technologies, and Daniel Friedli of Travel in Motion, sit down and discuss the challenges the travel industry has faced during the COVID-19 pandemic.

However, while there are challenges that have been faced, some travel brands have turned crisis into an opportunity. Perhaps the pandemic might bring fresh inspiration and innovation to the travel business by accelerating the future development of the industry.

Listen to the podcast below.

TRANSCRIPTION

Daniel Friedli:                       Hello listeners, and welcome to Travel In Motion’s podcast series. As an airline industry consultancy focused on digital retailing, NDC and distribution-related topics, we were interested to find out how the vendors in this space are supporting the airlines in these difficult times of COVID-19.

In this series, we talk about airline distribution, where are we headed? Throughout September 2020, we were able to interview five distinguished personalities. They all represent well-known airline industry solution providers, which focus on airline digital retailing. From the interviews, we got a lot of very good insights and interesting views on the effect of the global pandemic on the airlines and the vendors, but don’t take our word for it. Listen yourself.

The third of five podcasts is a conversation with Bryan Porter, chief commercial officer at OpenJaw Technologies. OpenJaw has been able to mark some serious success in the past 12 months, and with a strong hold in China through Travel Skies ownership, has seen how fast recovery can go.

Hey Bryan, thanks a lot for taking your time today to join us in our podcast series on airline distribution, where are we headed? It’s a pleasure to have you with me today for the next quarter of an hour. Are you ready?

Bryan Porter:                        I am, and thanks for having me, Daniel. It’s good to talk again. The sun’s just come out here in Dublin, so I only wish we were having this conversation over a pint.

Daniel Friedli:                       I wish we were, and I wish it be back all to face to face as usual. Bryan, can I ask you to briefly introduce yourself and OpenJaw to our listeners?

Bryan Porter:                        Yeah, sure, Daniel. Well, my name’s Bryan Porter, chief commercial officer at OpenJaw Technologies. OpenJaw’s mission is to help airlines to become better retailers. Our core platform is t-Retail, which enables airlines to merchandise and distribute their products and ancillaries through e-commerce channels as well as NDC. We’ve also recently extended our portfolio, by building out our customer data platform, t-Data, with a focus on data-driven dynamic offers, and our conversational chat solution, t-Social, for selling and servicing at scale.

Daniel Friedli:                       Great. Thanks for that introduction. Let’s dive into the questions, shall we? I hope we hear the context of some of those new products then as well. With the whole COVID crisis that we’re going through, what’s been the effect on your company?

Bryan Porter:                        Well, Daniel, I’d be lying if I said it hasn’t been profound. I think it deserves quite a detailed answer. OpenJaw entered 2020, well positioned for growth. This was based off a solid investment in our platform, in our retail capabilities in terms of NDC, in terms of data, and in terms of user experience.

As we started the year, we had a strong pipeline of opportunities. Unfortunately, the impact of COVID-19 has meant that many of the planned initiatives that we had with our customers and our prospects were suddenly delayed or canceled or curtailed. As a result, we’ve had to say goodbye to some of our new colleagues as we’ve moved to right size the business.

I suppose on the positive side, through the current crisis, we’ve learned a lot about ourselves. We’ve learned that we’ve got a lot of resilience in the business, in the face of change. We’ve certainly learned how to work from home and how to trust our colleagues to manage their time and focus on output. I think across the business we’ve all become better communicators, mostly out of necessity, and found new ways of collaborating.

I think that, I can’t actually believe that it’s September already, but as I reflect on the year to date, we’ve made a success of this new way of working. We’ve completed a major customer go live with all of our staff delivering from remote working. We’ve won three new customers, and we’ve completed a contract for a big new transformation project for one of our existing customers. As we reflect on where we are today, it’s been a tough time to get here, but I think we’re well positioned now.

Daniel Friedli:                       Bryan, with all of this change, both within your own company affected by this, but also within the whole industry, are you seeing a change of the retail behavior from, well, mainly from your airline customers, but I guess in the industry as a whole?

Bryan Porter:                        Yeah, I guess so. I think if we take a look back at sort of the dawn of the crisis, I think retail and retailing initially took a back seat. The focus was immediately on health, hygiene and safety, and also, how airlines could have essentially, right-sized themselves. But I think that the focus as we’ve moved on from that has moved more towards product attributes and merchandising. I think that reassurance has really become the watchword for recovery, and airlines are looking to stimulate demand through initiatives that allow customers to do things like buy out the middle seat and bundle travel insurance.

I think for our customers as well, one of the things that we’ve seen, Daniel, is a big focus on loyalty. I think that as we move forward, this is going to emerge as a key driver in recovery. If we think about it, loyalty essentially enables airlines to drive consumption through value-based promotional activity rather than just price. There’s the ability in there to maximize load factor without sacrificing the yield.

I think that one of the other things that we’ve seen is that while our customers have seen flight demand decimated. Interestingly, ground ancillaries have proven more resilient. We see flight bookings at a fraction of the 2019 levels, although there’s been some recovery today, but some of our key customers have seen a far more positive uptick in hotel and car bookings over the past few months to around about 50% of 2019 levels, which certainly supports an argument for revenue diversification.

Daniel Friedli:                       I think that’s a very interesting point, and it leads me nicely into where I’d like to go next with this conversation, and that’s about the opportunities you see for airlines. I’m wondering, does that mean that the airlines perhaps need to focus a little more on working collaboratively with some of these hotels and car and ground transportation providers to find a joint opportunity moving forward?

Bryan Porter:                        Look, I think so. I think in terms of what we’ve seen airlines looking at, there’s been a big focus on core operations, on cost containment and building out models to better understand what a recovery could look like. I think that, if we take a step back, I think it’s never been more important for the airline to essentially take back control of the offer.

For me, this means aligning the sales and marketing teams with the distribution teams to achieve a tighter alliance. I think that this gives you the opportunity to put the right offer in front of the right customer and the right channel. To your point, that gives the airlines the opportunity to essentially bundle based on the demands of the customer and cater towards a broader part of the travel itinerary.

Daniel Friedli:                       Other opportunities that we see for the airlines, or are they really faced more with challenges than anything else?

Bryan Porter:                        Look, I think challenge is the root of opportunity, Daniel. For us, if we take a look at what airlines are facing what does every airline wants to do? They want to take a look at how they can contain their costs and how they can maximize yield. I think that NDC is still a fundamental for that. It’ll enable airlines to achieve huge cost savings through disintermediation, and by presenting appropriate offers in each channel, there’ll be able to maximize yield through ancillary sales and through differentiating the offer in those channels.

I think the other thing that we’ve seen, and perhaps this is a broader opportunity for collaboration rather than opportunity just for the airlines, if we’re realistic about it and take a look at what’s happened over the last couple of months, airlines have cut their own IT and engineering staff as they’ve focused on core operations. I think that this makes vendor partnerships with companies like open OpenJaw all the more critical, as airlines look to identify platform solutions to power both their own channel distribution, as well as third party channel distribution.

Daniel Friedli:                       I think you’re right. I think there are some partnership opportunities in the pipeline for that. What about NDC? In ONE Order, you touched on NDC very briefly, and you also said at the beginning of this chat that airlines might be stopping their projects, so they need to rethink where they’re investing as well. What does this mean for the dynamics of NDC and the dynamics of where ONE Order was going pre-COVID to where it will go and at which pace it will move forward now?

Bryan Porter:                        Yeah, absolutely, important question, Daniel. I’ll start by giving you my view on NDC and then move to ONE Order, if that’s all right? As I alluded to previously, I think the fundamentals for NDC remain unchanged, and if anything, the case for NDC has been strengthened by what we’ve seen over the crisis.

For me, that airlines can control the offer, and by controlling the offer, they can ensure that they focus on merchandising those product attributes that drive consumption. This gives the airlines the opportunity to better differentiate their offers in the appropriate channels. What I mean by that is, we spoke about reassurance being the watchword for recovery, and by driving product attributes that speak to the purchasing behaviors of the customer, that’s something that gives the airlines a lot of power, and it’s only by controlling the offer across all channels that they’re able to do that.

I think one of the other points that we mentioned earlier was lowering distribution costs, and this has obviously been one of the big promises of NDC. It doesn’t necessarily just amount to cost savings for the airlines, but by lowering distribution costs, the lower overall prices can be passed over to the customer so that it can effectively be used to drive consumption.

I think that, finally, NDC also supports am airline’s quest to ensure a consistent offer display across all distribution channels. By doing this, it essentially opens up new channels to ancillary revenue streams. Across that, there’s an opportunity for airlines through NDC to effectively lower or contain their distribution costs while simultaneously maximizing yield by effectively opening up new ancillary revenue streams across all channels.

In terms of ONE Order, I think ONE Order is still a little behind NDC in terms of development and adoption. Through an OMS like ours, in terms of our t-Retail platform, we’ve got the capability to deliver ONE Order. OpenJaw’s been working with the ONE Order working groups and helping build out the API messaging. The reality is that we’re actively looking for an airline partner to deliver this capability with.

I think if we take a look at it, for me, one of the biggest challenges that we have with ONE Order is the amount of partner collaboration that’s required to deliver an end-to-end solution. There’s so many airline processes that effectively hang off the PSS and rely on the creation of traditional documents. I think, as ONE Order moves to become the central source of truth for the order within the OMS, and the legacy documents are no longer created within the PSS. There’s still a need for all of those legacy processes to be recreated.

Albeit in a simplified and more efficient manner, and in terms of there’s a big bang approach just won’t work here. There’s all those legacy processes need to be replaced gradually over time with more efficient versions, until eventually we reach a stage where we move beyond the PNR, the e-ticket and the EMD.

Daniel Friedli:                       In essence what I hear you say is that NDC, yes, absolutely, and it’s still an opportunity. There’s still a lot of room for growth, even with all of this. On ONE Order, there’s a bit of a bigger challenge because there’s much further to go still. The focus there might not be on immediate benefit because we still have the parallel systems needing to run for a while yet. Is that correct?

Bryan Porter:                        Yeah. I think if we take a look at NDC, a lot of the solution and the promise within NDC is technological and strategic in terms of finding new mechanics for distribution. With ONE Order, I think that there’s a process change required. I think that this is going to take time, and it’s a transition that needs to be properly managed between the vendor and the airline.

Daniel Friedli:                       Looking at the situation that we’re all in, and some of the changes you’ve made, and alluded to within your organization, are the things that you can do or that you are doing as OpenJaw to support the airlines, based on the opportunities we’ve talked about, or the overall challenges that they’re having?

Bryan Porter:                        Yeah. Supporting the airlines has basically been the big focus over the past couple of months. To be frank, we’ve had to support our customers as they dial back on investment in the short term to see their way through the crisis. I think over the long-term, we’ll continue to focus on helping them to become better retailers and to deliver a better and more personalized service.

For OpenJaw, there’s value creation in the market ahead, and we see ourselves as a key participant. I think in terms of how we see ourselves, OpenJaw is more of a long-term partner for our airlines rather than just a tech provider. I think that’s reflected in both our joint success commercial framework, as well as our community approach to product evolution. I think that this is taught both ourselves and our airline partners quite a lot. I think that we’re learning new ways of adapting together.

Going forward, I think that’s going to translate into our product investment. We’re going to need to focus on technology and solutions that effectively allow both ourselves and our airline partners to react more quickly to changing market conditions. As well, we were working with some customers on some direct opportunities that they’re seeing as a result of the current environment. I think that, as great and as tactical as they are, and I’m sure you can imagine that they are unique differentiators, so it’d probably be a bit premature to give too much detail on those.

Daniel Friedli:                       That does lead me though to sort of asking, some of these shorter term changes and tactical changes, but all in all, how does it influence your strategy, the company’s strategy in terms of product and where you’re going, potential growth, all those things?

Bryan Porter:                        Look, I think that in terms of our strategic approach, I mentioned that we’ve got a community-based approach to product evolution. I think that the cycles that we’ve had in terms of how we engage with our customers have definitely shortened, as we move to see how we can actually accommodate some more tactical changes in terms of our platform evolution.

I think ultimately, what I mentioned earlier, in terms of the fundamental staying the same, we’ll continue to build on our core NDC capability and extending our merchandising capabilities in terms of the offer. I think that we’ve been building out a lot of functionality in terms of our t-Data, customer data platform, and we see that as being a key component to the differentiation that we can provide our airline partners in terms of dynamic offer construction. That’s another key aspect.

I did mention earlier that loyalty is a big vertical for us, and we’re definitely going to be expanding on our capabilities in terms of flight accrual and redemption, and how that aligns with retailing and developing out our digital experience. We’ve got a mobile response, a user experience, that actually enables those selling flows. Then I mentioned also that we’re actively looking for an airline partner on ONE Order. We don’t see this necessarily as just a technological change. I think that’s the easy part. It’s really about how we actually partner to deliver value in terms of process change.

Then ultimately, we’ve got a sort of a triangular vision. The core retailing platform will continue to empower the airline as a retailer, but then in terms of our customer data platform, we’re focusing on building out our capabilities in terms of driving customer centricity for travel.

Then we’ve, also, I mentioned that we’ve been investing in our chat solution, t-Social, and the initial model that we currently working on rolling out with one of our airline partners pretty much focuses on alleviating pressure on the call center. Ultimately, we want to integrate this functionality with what we’re building out in terms of NDC so that effectively it enables selling and servicing at scale.

Daniel Friedli:                       Closing us off, Bryan, let me know, what is your key learning from this crisis, either personal or from a business perspective for yourself and for OpenJaw?

Bryan Porter:                        That’s an excellent question. I think for me, it’s adaptability, Daniel, and the ability to cope through change and prosper through change. I think that we’ve seen strong support from our stakeholders, and that’s been more important than ever. There’s our customers, our employees, and our shareholder, and the levels of communication that have been enabled and the channels for communication that have opened up through this have been really quite astounding, and it’s changed the way that we engage.

We all hear about the new normal without talking about what that actually means. For us, it’s constantly looking forward, developing scenarios and using scenario planning to basically make sense of the uncertainty, and identify strategies based on how we think things might play out.

Daniel Friedli:                       No, I was going to say, I think I like that, just that first word you used, adaptability, that really encapsulates what we all need to look at and to embrace constantly now, because we don’t know what is next week. We don’t know what is in two weeks, and I think that adaptability personally, and from a business perspective is absolutely key, isn’t it?

Bryan Porter:                        Absolutely, the only constant is changed, so we’ve got to find the courage to embrace it. I think for me, that means constantly learning and up-skilling on a personal basis, but also finding ways for the company to adapt to new ways of working. For us, being prepared to try and fail, it means we must fail fast and try again, but adaptability is key.

Daniel Friedli:                       Excellent, excellent. Well, listen, Bryan, our time is already up, but thank you so much for taking your time to speak with me. I got a lot of valuable insight from this. I think it’s really interesting, and I’m looking forward to getting some industry feedback from this in the next few weeks and see what the rest of the industry thinks as well.

Bryan Porter:                        Daniel, always a pleasure and I look forward to hearing the industry feedback too. Thank you.

Daniel Friedli:                       Thank you very much, and all the best to you and to OpenJaw in the coming months.

Travel In Motion thanks you for listening, and we hope you found the podcast interesting. If you have any questions or need support with your digital strategies and transformation, feel free to get in touch via our website, LinkedIn or via info@travelinmotion.ch. That’s info@travelinmotion.ch.

You can read the original article and listen to the original recording here: https://www.travelinmotion.ch/podcasts/