Airlines must develop new revenue streams as pressure on costs is showing no signs of abating, delegates at T2RLEngage were told.
Greg Gilchrist, senior vice president global sales at Sabre Travel Solutions said airlines that move fast to start their journey on the path to modern retailing capabilities will benefit sooner.
He likened the transition from legacy PSS (Passenger Service System) platform to Order, Offer, Settle, Deliver (OOSD) to climbing a mountain and said there are three key stages to the ascent.
The first is the foundations where airlines take on the ability to analyse “mountains of data” to create more relevant and personalised offers that increase conversion and revenues.
The second is the opportunity to retail third party content, including non-air, to enhance the digital relationship with the customer.
Sabre estimates this phase will be worth an incremental $7.70 per passenger in added value but will require a technology ‘translation layer’ to allow new and old systems to work together.
The final phase will see the aviation sector reach “new heights” as the technology stack is streamlined, said Gilchrist. “We can realise the full efficiencies of modular technology interacting with customer,” he added.
This final phase is forecast to drive $8.75 in additional revenue, an increase in the dynamic packaging of air with other products of as much as 3 per cent and a 10 per cent increase in ancillary revenues.
“When [the PSS] can be turned off and is history for us all, I think that the industry will benefit greatly because we will be operating in a totally different tech paradigm,” Gilchrist said.
Sabre has agreed a partnership to work with tech giant Google bringing its cloud technology and the GDSs aviation sector knowledge together to build and innovate the technology for the future.
Gilchrist said this gives Sabre “unlimited capacity” to capture and analyse data and to “look at data in ways we have never been able to in the past.”
He told T2RLEngage’s 500 delegates: “We need to embrace new revenue opportunities, new trips and new experiences for our consumers.
“We frankly have to do it because as an industry today there is no relenting in terms of costs. It behaves us to look for revenue opportunities we can provide. Airlines that move first will benefit sooner.
“There will be obstacles along the way, as with all journeys, but you have to have the confidence to sell more than just the seat and a bag to you customers, and you need the technology to do that.
“We are confident that the partnership we have with Google is one which can take Sabre and all participants in the ecosystem all the way to the summit.”