Alternative interline in an offer-order world

Transcript

David Gunnarsson:Good afternoon. My name is David. I'm very happy to see so many of you here still at the end of day. I realise it's now me and the panel that stands between us all and drinks and dinner later on. So let's try to make it a little bit fun. Hi, David. I run a business called Dohop. We are a travel tech business based in Iceland. We primarily work with airlines, and our vision in our business is to make connected travel simple. And the connected refers to how airlines build connected journeys with other transport providers, other airlines, rail, etc. And I want to talk to you about how interline is changing in the offer-order transition and into the future. On the premise that retailing as a concept for airlines is definitely accelerating, but connectivity in how airlines relate to each other in partnerships is definitely lagging behind. So just to warn you, these slides, the imagery on these slides is fully generated by Most Google Gemini, most recent update. So if you see any strange things, it's hallucinations, right? No marketing people were harmed in the creation of this deck. So offer order is of course about rebuilding airline retailing, and, and many of you know this better than I do. It's about, you know, creating dynamic offers that are airline controlled. It's about replacing tickets and PNRs and EMDs and with a single order, and all of this should lead to better retailing outcomes in terms of revenue and conversion and customer experience for the airline. The precursor to this is of course NDC, and it continues to scale. However, one is starting to hear certain airlines backing away from NDC and sort of parking those efforts for a bit, while others are of course going full throttle. That's the nature of the business, right? I mean, airlines have different needs at different times. Distribution practices are evolving, and airlines are looking to move beyond legacy systems to flexible retailing platforms. And the main thing is about generating tailored offers and dynamic pricing in order to personalise a customer experience. So really revolves around how to do better by the customer. And while retailing is modernising, In our view, interline isn't really sort of following as quickly behind. So interline still relies on filed fares and ticketing and legacy messaging, while offer and order really removes these shared artefacts, as you know. And what happens is that the— or what's happening is that the interline processes, which we think about a lot, they haven't really adapted to this new vision of the world that is sort of being created before our eyes, and that creates this gap. And even in, you know, we can even think of airlines like Riyadh Air that is offer-and-order native, as they explain it, but they still felt the need to build a legacy translator in order to be able to interline with other carriers, which kind of means that yes, offer-and-order, an airline can be offer-and-order native, but wanting to properly interline with other airlines doesn't really work in that sense. And if we think about it from the customer perspective, customers of course buy journeys. They don't care about segments or multiple carriers, whoever it is. They want one trip, they're going on one trip, and they want a single price and they want one accountable brand. Sometimes customers try to self-connect and that of course breaks down in disruption and of course the ability to through-check a bag. So self-transfer, or what we normally would call virtual interline these days usually breaks down. And fragmentation of that nature generally just hurts trust and obviously discourages repeat purchases. Even though customers do it in the thousands or millions, it's still— there's still something broken about that whole process. So there's an industry promise, of course, the IATA view, which is seamless multi-carrier journeys, you know, operational efficiency, faster partnerships, alignment of fares and bundles and improved disruption management and servicing. And I think all of this is going to be true, but perhaps not just yet, which means obviously in the aviation world means probably in 20 years. And that's the fact. The benefits of the sort of offer-order transition from an interline perspective, they're probably years away, right? So it's very early days and we need this bridge now into the future. So NDC is already 15 years in, yet here we are where we're not very far along, right? And modern interline needs these new shared mechanics that are kind of building a bridge through the offer-order transition, but also in the full offer-order future. So if you think about it, what's wrong today, right? Or, you know, where are the limitations? Where are the alternatives today? So you've got codeshare and interline. which is generally pretty strong, right? I mean, it's robust where it exists, but it's definitely slow to scale. It doesn't always work. You know, I'm from Iceland, so I came in on an Icelandair codeshare with TAP, and I landed in Copenhagen at the connecting airport, and I was paged because TAP thought I hadn't checked in, yet I had both of my boarding passes on my phone, but somehow Icelandair had not been able to transmit that information to taps DCS. So I was lucky I didn't have a bag. I don't know where that would have ended up had I had one. And then of course the alternative here is also virtual interline, which I talked about earlier, which we know it's definitely a way that sort of scales very quickly, but it's a fragile experience. So there are limitations around servicing and IROps and bags and performance and settlement and all of these things, all of the things you know. And what's missing It's this connectivity layer, this layer that bridges this gap from the legacy processes of old, the orders and the traditional interline, over to the future of what interline needs to look like in an offer and order, in a full offer order world. So a partner-neutral connectivity network to combine offers, shared servicing, IROPS handling at scale, all of these things are of course the ability or underline the ability for an airline to expand its network while retaining retail control, which is the key thing here. Now, of course, this could be an opportunity to do away with interline as we know it and just create a traveller-centric product. But somebody has to. So somebody has to be the sort of backbone of that and powering that. And what we do is— our vision is making connected travel simple across, you know, providing connected travel across carriers with known commercials, full order management, and an end-to-end journey management component that allows planning and booking, post-booking, and of course the customer experience. And we want to make this simple not only for airlines, but of course primarily for the passenger, right? And I think this starts with bags, right? Bags are one of the top friction points in an interline journey. They don't always work, they're not always there, and offer and order doesn't solve for this automatically. But if we solve that, we think we've got a path towards broader modern interline in the offer and order world. So we've actually launched our first partnership between Scoot and Air India Express over Singapore, where they are in an offer-order context with 2 PNRs, single bag tag, and a fully seamless journey across their networks where they partner. So the important bit here is while as an airline going through an offer-and-order transition, gaining the sort of the benefits of modern-day retailing, the important thing is not to lose the network, because the network, the additions to your network through interline and codeshare, that's how you fully service your customers if you don't— if you're not, you know, American Airlines and fly everywhere. So, you know, this might be an opportunity to remove this layer of complexity, but of course what we need to build is interline for full offer and order, and it— not in 5 years or 25 years, We think the right time to do that is now. Thank you.

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