By Jim Hetzel, Director Product Marketing at Cirium
Airline distribution is rapidly evolving, with the shift toward digital channels and the ever-increasing demand for personalized customer experiences. Traditional global distribution systems (GDS), which once dominated the industry, are not enough to cater to today’s travelers.
Distribution is more than just selling tickets but also the distribution of data that helps inform and provide a rich experience for the traveler.
Airlines now need to adapt to innovative technologies to stay relevant in this increasingly competitive landscape. In this article, we will discuss the future of airline distribution and why it matters for airlines.
Embracing Direct Distribution
While GDSs have been the backbone of airline distribution for decades, airlines must now explore alternative distribution models. Direct distribution enables airlines to bypass intermediaries and connect directly with customers, providing a more personalized experience. Direct channels also offer airlines the chance to upsell products and services that may not be available through GDSs. Forward-thinking airlines such as American, Delta, and United are already investing in direct distribution channels that give them greater control over their inventory, revenue management, and customer experience.
The Rise of Blockchain Technology
Blockchain technology offers airlines the chance to improve data security and enhance the speed of transactions. Airlines can deploy blockchain smart contracts to automate ticketing and payments, making the purchasing process quicker and more efficient. The technology can also facilitate transactions across different airlines, creating a seamless, end-to-end travel experience for passengers. Air France-KLM recently launched a pilot project that uses blockchain technology to optimize data sharing between partners.
Personalized Messaging
With the wealth of data available on customer behavior, airlines can now use artificial intelligence to create hyper-targeted marketing messages. AI-powered chatbots can learn about customer preferences and respond with personalized offers and promotions, enhancing the customer experience. By empowering agents with real-time customer data, airlines can provide exceptional customer service that further strengthens the relationship between the airline and its customers.
Enhancing Ancillary Revenue
Ancillary revenue is increasingly becoming a crucial component of airline revenue, and airlines need to find innovative ways to tap into this source. By leveraging data insights, airlines can identify the products and services that customers want and offer them at the right time and price. For example, airlines can offer personalized in-flight entertainment or tailored hotel and car rental packages. By leveraging digital channels to promote ancillary services, airlines can boost their revenue without passing on the cost to customers in the form of higher fares.
Partnerships and Collaboration
Collaboration with third-party providers can help airlines tap into new markets and reach customers and broader distribution channels in innovative ways. Airlines can partner with tech companies or start-ups to develop new distribution strategies, and global alliances, and get access to untapped customer bases. For example, at Cirium, we offer an airline partnership program that facilitates the distribution of content, such as schedules, flight information, aircraft attributes, and more, to multiple travel stakeholders who distribute tickets, facilitate bookings, or communicate crucial flight information like flight status, baggage stand information and aircraft details. Such collaborations allow airlines to increase their reach beyond their traditional distribution channels and ensure that that their content is presented accurately.
The future of airline distribution goes beyond the traditional GDS model, and airlines need to adapt to new technologies and strategies to remain competitive.
By embracing direct distribution, leveraging blockchain technology and AI, enhancing ancillary revenue, and forming strategic partnerships, airlines can provide a more personalized and efficient experience for their customers. As competition continues to intensify, airlines that leverage innovative technologies and strategies will create a significant advantage in the market.
Learn how you can join Cirium’s airline partnership program.
