Distribution, Airport Experience Provide Opportunities to Boost Value
The International Air Transport Association (IATA) called on all partners and stakeholders involved in passenger travel to work together to deliver greater value to passengers.
“Aviation makes possible $2.2 trillion worth of economic activity and supports some 57 million jobs around the globe. Every day more than 8 million passengers take advantage of the safety, speed and convenience of air travel; and airfares are one-third lower, in real terms, than they were 20 years ago. It truly is the mass transit system for the global economy. But our customers expect more. By working together as an industry with a common vision we can deliver even greater value to air travelers,” said Tony Tyler, IATA Director General and CEO.
“Our passengers are focused on value and their expectations are high and rising. That means we must continuously examine, modernize and evolve our offering. The goal is to ensure that what we see as ‘service’ actually means ‘value’ to our customers,” said Tyler while speaking at the opening of the World Passenger Symposium in Dublin.
Tyler focused on two areas where the industry can add greater value to the trip experience:
“Shopping for air travel is changing. Flying is more than just a seat on a plane. An air ticket has become a product with multiple attributes that may include in-flight Wi-Fi, extra legroom, lounge access and much more. And the reality is that it is much easier to access these value-added services via an airline website than through the travel agents who account for 60% of sales. This gap exists because distribution via travel agents is built on pre-Internet messaging standards. These don’t have the same capabilities as XML, the language of Internet-based commerce,” said Tyler.
IATA is working with our travel agent and travel technology partners to close that gap through the New Distribution Capability (NDC). While global distribution system (GDS) companies are moving to make it possible for airlines to merchandize their products in a manner more consistent with airlines’ own websites, each is developing its own proprietary solution. “Aviation was built on global standards. Consistent with that, NDC will be an open standard available to any and all who want to use it,” said Tyler.
NDC also responds to passenger demand for customization and personalization. According to IATA’s 2013 Global Passenger Survey, almost one-half of travelers are interested in sharing such things as travel preferences, age, interest/hobbies and frequent flyer status in order to receive special offers or products and services from airlines tailored to their needs; and a fifth would share their social media profile as well.
“The NDC standard will unleash innovation—and that will mean change. But, let me assure you of a few things. NDC will operate within the same privacy laws that govern every other business. That is no change from today. But, by giving travel agents more information, there will be greater transparency,” said Tyler.
“We are making strong progress on NDC. The application for approval of Resolution 787, which is the foundation document for NDC, is before the US Department of Transportation (DOT), and we are optimistic of a positive outcome in the fourth quarter that will permit adoption of schemas under development. Meanwhile, we are encouraging airlines, travel agents and technology providers to join the pilot phase which is expected to continue through 2014,” said Tyler.
The Passenger Experience at Airports
“A smooth and hassle-free journey where passengers do not have to break stride from the curb to the gate unless they choose to is the goal. That would deliver tremendous value to passengers and our vision is to work with our airport and technology partners to make it a reality by 2020,” said Tyler. To deliver this, self-service, risk-based security processes and continuous connectivity are needed.
Tyler noted developments in the Fast Travel program as important elements in delivering this vision. The program provides self-service options for key processes such as check-in, bag-check, self-boarding, flight rebooking and document check. “We are in the mass implementation phase of the Fast Travel program. We expect Fast Travel penetration will cover airports serving 45% of eligible passengers by the end of 2015,” said Tyler.
Security is a key component of the passenger experience in airports and a critical part of the 2020 vision. “We know that passengers are unhappy with the current security experience. Long queuing times and removing shoes and belts were listed most frequently in the 2013 Global Passenger Survey as the biggest hassles associated with security. The way to address that is by transitioning to a risk-based security model that will use information that airlines already provide to governments to help make assessments about travelers,” said Tyler.
IATA is engaging with stakeholders in industry and government to improve airport security while delivering a more valuable passenger experience. Trials with airport partners of important Checkpoint of the Future (CoF) components began in 2012 and are continuing this year. Deployment of the first generation CoF will occur in at least two airports in 2015.
“IATA is also working with the Airports Council International to make Wi-Fi connectivity more widely available at airports around the world, which will add value to the customer experience by giving the passenger the option to receive real-time flight information and updates, ability to re-book, receive push notifications, and access airline websites,” said Tyler. In future, technologies such as Near-Field Communication could simplify a number of passenger interactions, enabling the passenger to use tap and go functionality at check-in, boarding gates and airport lounges while providing better connectivity with travel suppliers.
A value model for regulation
As industry partners work to create more value for passengers, Tyler urged governments to do the same. “We are an industry that relies on satisfying our customers. Of course sometimes things will go wrong. Commercial discipline incentivizes airlines to do the right thing, and governments have a role in setting simple guarantees. But writing new passenger rights regulations that impose prescriptive solutions on airlines without adding value to the travel experience is not the right way. Already some 60 countries have passenger rights requirements and several more are considering imposing them, creating a patchwork quilt of confusing and conflicting regulations that limit airline flexibility in addressing disruptions. Value comes from global standards that foster coordination and consistency.”
At the recent International Civil Aviation Organization Assembly, Member States agreed there is a need for high-level, non-prescriptive principles that are consistent with international agreements and that strike a balance between protecting passengers and maintaining industry competitiveness. IATA supports those conclusions and agrees with the need for greater convergence and compatibility. The industry’s core principles on consumer protection – unanimously adopted by IATA’s membership in June – will serve as an input into this important discussion. “We are working with our partners to re-invent the passenger experience. To be forced into a regulatory box of inflexible one-size fits all prescriptive regulatory solutions would be a huge setback to these efforts,” Tyler said.
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