Bringing greater value to air travel – IATA calls for a collaborative approach to boost efficiency

The International Air Transport Association (IATA) called upon aviation stakeholders to work together to create greater value for customers across the travel experience while enabling greater efficiency for industry participants.

“Airlines expect to carry some 3 billion passengers in 2013. And that number will double by 2030. Connectivity is a critical component of modern economies. Serving that growing demand will require innovation. We need to understand what consumers expect and what they value enough to pay for. Aviation is team effort. And that is a challenge for all industry stakeholders. Travel agents, airports, air navigation service providers, regulators, manufacturers, ground service providers, global distribution systems (GDSs) and many others must work together to make each passenger journey as safe, secure, seamless and convenient as possible,” said Tony Tyler, IATA’s Director General and CEO. Tyler made his comments in an address to the World Passenger Symposium which opened in Abu Dhabi, United Arab Emirates today.

Tyler highlighted three priority areas for cooperation to create a more seamless and more interactive modern travel experience:

• Simplifying airport processes with Fast Travel
• Implementing a Checkpoint of the Future (CoF) for passenger security
• And developing a New Distribution Capability in line with modern retailing practices

Fast Travel: IATA is working with industry stakeholders to implement self-service options with its Fast Travel program. This gives passengers more control over their airport experience in six key processes: check-in, bag check, travel document scanning, boarding, flight re-booking and baggage tracing. “IATA’s Global Passenger Survey reveals that 52% of travelers are eager to print out their own bag tags at home and 77% would prefer to use a self-boarding gate at an airport. Fast Travel responds to these and other consumer demands for more control over their journey,” said Tyler.

“Our 2020 vision is for a fast, seamless curb to airside experience that is predictable, repeatable, secure and globally consistent. An important component of that vision is ubiquitous one-click access to Wi-Fi at airports. This will enable travel services providers to exchange data in real-time with passengers,” said Tyler. Such interaction will provide a channel to provide passengers with options to add value to their journey as well as facilitating a smoother process when there are delays or other irregularities.

CoF: The CoF project will enable a walk-through security checkpoint experience without stopping, removing items of clothing and liquids, or taking computers out of bags. “CoF will replace today’s one-size-fits-all approach to screening with a model based on risk assessment. By focusing resources where the need is greatest we will make the system more secure and reduce the hassle for our customers,” Tyler said. According to IATA’s Global Passenger Survey, queuing time is the most frequent complaint with security.

Key to achieving the goals of CoF is the use of passenger information that is already required by many governments for purposes of customs and immigration. This could be supplemented with voluntary known traveler programs. “Sharing information about passengers is a sensitive subject, but our Passenger Survey shows that nearly three out of four air travelers would be willing to share personal information with governments to speed up security screening,” Tyler said.

CoF is moving forward in a staged approach. The initial focus is on making today’s checkpoints more efficient through such steps as introducing dedicated known traveler lanes, which can increase efficiency by up to 30%. Trials of specific CoF components are currently being carried out and Tyler urged airports, security regulators and equipment providers to join together to identify candidate airports for the first CoF trial in 2014.

New Distribution Capability: Tyler also cited the need for a New Distribution Capability (NDC) to enable the industry to offer more options to customers and to reach them seamlessly regardless of distribution channel. “The internet economy has fundamentally reshaped the ways in which sellers and consumers interact. Customers expect to be recognized when they shop online. And they are used to receiving tailored offerings based on their past purchasing behavior. Airlines are able to participate in this new model with those customers purchasing directly from their websites. They can recognize return visitors and make offers based on travel history, loyalty status, credit card brand or other metric. And customers have complete visibility of additional products and services on offer,” said Tyler.

About 40% of ticket sales by value come through airline websites. The rest is sold indirectly via travel agents using GDSs. As a result, it is impossible for the airline to tailor its offer to these customers. Furthermore, this model is focused only on finding the lowest ticket price which is commoditizing air travel even as airlines innovate their products.

“Airlines are trying to escape the commoditization trap through differentiation, and merchandizing. They are developing products and services, such as special meals, expedited boarding, roomier seats and access to airport lounges. But the travel agent sees only fare codes—F, J, Y and their various derivatives—which cannot fully describe options available. Customers expect more. The solution is the NDC powered by open XML standards. This will enable innovation in the way airline products are distributed. One key outcome will be closing of the gap between airlines and their customers so that customized offers can be made to travelers even through travel agents,” said Tyler.

IATA’s role is to lead the industry to adopt a new, modern infrastructure that will accommodate more choices for personalized travel offers, provide the foundation for the development of efficient tools for agents and lower the overall cost of distribution. To this end, IATA will propose a roadmap and business case for the NDC. “We expect to complete the Standards definition next year. Then competition and travelers’ needs will guide airlines, agents, system providers and new entrants with tremendous opportunities for innovation. Forty years after the birth of the current distribution paradigm, we have an opportunity for a revolution in airline retailing,” said Tyler.

Read Tony Tyler’s remarks

Read the comments from H.H. Sheikh Nahyan (pdf)