Airlines have more ways than ever to reach out to passengers, but the relentless pace of technological change means passenger expectations are high and rising. The distribution game has never been easy – but it is about to become harder.

FlightGlobal's inaugural Reach Your Customers conference in Singapore saw airline executives and other industry players explore today's technological issues in distribution. They also discussed practical tips for dealing with an emerging environment.

Perhaps the biggest theme to emerge is that no single airline can go it alone. Success will rely not solely on airline distribution teams, but on a range of actors including online travel agents (OTAs), evolving initiatives from established global distribution systems (GDSs), and consultants with a nuanced understanding of airline systems and issues.

"We're always talking about the revolution in distribution and how everything will change, but one thing about this industry is how much we depend upon each other," says consultant Michael Moore, who chaired the conference. "Every airline wants to be number one, but it's pretty difficult in this industry to go it on your own."

The wide-ranging conference resulted in six key takeaways.


James Whitelaw, SkyTeam's vice-president for airport services, laid out the disruptive forces confronting the industry. He cites an "Amazon Effect", whereby consumers are enjoying a new world of fast, easy retail opportunities. This influences consumer expectations about airlines, and low-cost carriers have proven fast adopters at embracing these trends.

He noted that one of SkyTeam's focus areas is dealing with basic expectations. For example, in distribution, a ticket's price can vary depending on the channel, such as the airline's website or a GDS. With an interline ticket, passengers may be unable to purchase ancillaries if a second carrier is involved.

"Our industry and landscape are shifting," says Whitelaw. "Airlines and alliances must stay relevant to customers or risk becoming flying metal. We are at a crossroads as it relates to how commercial offerings are made to customers."

SkyTeam's Digital Spine, a proprietary platform for SkyTeam member airlines, is intended to help with issues such as interline passengers' inability to view seat maps, select seats, change seats, or buy ancillaries.


Lufthansa discussed its success with IATA's New Distribution Capability (NDC) over the past four years, with direct distribution of tickets hitting over 50% of the total during the last six months, both through NDC channels and the company’s website.

"This is something we’re quite proud of," says Paul Ignaz Hannak, senior manager sales products and programmes distribution Asia-Pacific for Lufthansa.

Famously, the airline sent shockwaves through the industry in 2015 when it introduced a charge for flights booked outside its own systems. Hannak notes that the airline now has 2,200 partners in its NDC Partner Programme.

He says that a key element of this growth is a strong sales team that has allowed Lufthansa to pitch its NDC solution to external partners. This coincided with investments in technology and personnel to continually improve its direct distribution capabilities. In addition, the airline is eager to work with partners on products and bundles for specific markets.


Hong Kong low-cost carrier Hong Kong Express shared that it has had strong customer conversion rates – where visitors buy a ticket - through its mobile app. The carrier is so strong in the mobile arena that an Accenture and Google regional report rated the company as top for mobile experience.

The airline's major market is Hong Kong, where 70% of customers come through its mobile app or its mobile web version.

Sally Mok, general manager of e-commerce and distribution at the airline, said that HK Express has worked at becoming customer centric by identifying quick wins at the consumer level, collecting data to understand customer needs and preferences, tracking customer satisfaction, and working to increase loyalty.

The airline has a five-step process to help improve sales on mobile platforms. These are identifying consumer problems, determining priorities to be addressed, establishing timelines for delivery, working with vendors to develop features, and finally measuring and evaluating outcomes.

One example where the company has driven mobile bookings is the removal of unnecessary fields, such as requiring mobile users to enter their physical address. Another is a clear call to action for passengers when offered a flight selection, which helps move them towards a booking. In addition, the airline has made it easier to search for flights by repositioning the search query module so that no scrolling is required.

Overall, the airline offered three takeaways: customer experience drives revenue; data is of great use in understanding and resolving issues; and experimenting is important for optimising the consumer experience.


Frederic Saunier, director airline distribution at Amadeus, gave a presentation detailing the profound changes distribution is undergoing. These include personalisation across all touchpoints, new technologies, the further development of NDC, more insights from traveller data, as well as what he terms "mega meta OTAs".

Airlines therefored need to be adept at distributing across all channels to help growth.

"Traditionally, distribution has been an industry of slow change, and today this industry is moving very fast, with distribution facing unprecedented change,” says Saunier.

Saunier highlighted this with a forecast on gross bookings by channel. In 2018, approximately 53% of Asia-Pacific bookings came from offline channels, 29% from direct online, and 19% from OTAs. By 2022, offline bookings will fall to 44%, direct online will grow to 32%, and OTAs to 24%.

"The share of OTAs is growing faster than the share of airline dot com," he says.


In a comprehensive presentation about innovation, AirAsia disclosed its wide reach among customers through social media platforms such as Facebook (11.9 million followers), Line (26 million), Twitter (7.9 million), and Instagram (1.6 million).

As for its own portals, the AirAsia website and app attract over 560 million unique visitors per year, and its app has been downloaded more than 40 million times. The carrier's conversion rate for paid customers is 2.9%. Although AirAsia operates in nine countries, it receives hits from a far larger number.

"We have a really good brand and won a lot of awards, but that is not enough," says Frederic Ducros, AirAsia Group chief transformation officer. "It is not enough because the market is completely disrupted."

Ducros stresses that the airline does not use GDSs for bookings, having relied on the web to serve that purpose since its origins in 2001. "GDSs have very structured product offerings, they provide a lot of services. We have to build everything [ourselves], so that is more complicated."

The company's broad digital reach offers reams of data on customers, so a major emphasis at the company is empowering employees to make decisions and recommendations based on data insights.

Experimentation is encouraged, and failure is viewed as a learning experience. "Half the experiments fail if we are lucky," says Ducros.

He outlines five innovation themes at the company: maximising revenue, operational excellence, supporting staff, delighting customers and exploring the future. Under the maximising revenue theme, the airline prioritises dynamic pricing, multiple distribution channels, dealing with unsold inventory (seats), and developing new ancillaries.


In the conference’s final presentation, Daniel Friedli, managing director of Travel in Motion, described a fundamental conflict between three stakeholders over payments, a crucial element of airline retailing strategy.

The focus of airlines is conversions to ticket sales, while financial institutions want security and passengers want ease of use. He views this is a key challenge for the payment industry.

"Usability has a direct effect on conversion, and security can affect how conversion works, but also how usability works," says Friedli. "If we have complex ways of doing security, then usability will decline. If it's not as usable, then we'll have a lower conversion. They all need to be thought of at the same time. You can't solve one without affecting the other."

This dynamic is compounded by the growth in distribution channels and is related to NDC, which can move more transactions towards the airline as opposed to a travel agency. In addition, forms of payment are proliferating and regulations around payments are growing.

In a thought leadership paper, Travel in Motion encouraged airlines to adopt a "holistic" payment strategy that includes areas such as security, usability, cost of payment and settlement flows.

Source: Cirium Dashboard