CEO Panel - Air Travel Value Chain
The air transport industry requires cooperation and working together across the value chain in order to improve the customer experience and create the conditions for enhanced competition said participants on a vibrant CEO panel moderated by BBC’s Fast Track presenter, Rajan Datar.
The panel, composed of leaders representing airlines, regulators, IT providers and travel agents, examined the main requirements and pain points occurring in the areas of distribution and the passenger experience.
Rajan Datar (BBC), Panel Moderator
Christoph Mueller, CEO Aer Lingus
Airline Distribution and Ancillaries
Ancillary revenues grew to an estimated $36 billion in 2012, representing just over 5% of airline revenues. US Major airlines are now generating 10-12% of their revenues from ancillaries. The IATA Global Passenger Survey results show that nearly half (48%) of air travelers purchased ancillary products in the past 12 months.
Christoph Mueller, CEO of Aer Lingus, noted that the airline aims to allow passengers to differentiate their journey by choosing the features they want. “The seat offer will not bring the differentiation. What is important is the choice that we can give to our customers.”
When asked if he felt his product was sufficiently differentiated when selling through the travel agent channel, Alexandre de Juniac, CEO of Air France KLM added “Probably not. Our product is neither differentiated nor personalized through this channel and we are struggling to better know our customers without bombarding them with information and spam.”
“It is a pity that the advanced level of retailing available through airline websites it is not available to travel agents” Mueller agreed.
Gordon Wilson, CEO of Travelport challenged this view, stating that Travelport “is currently able to provide the full fare of products with specific carriers using XML and certainly this is a model where low cost carriers are very advanced.”
When asked whether the GDS would consider adopting the NDC standard, he said: “We are happy to work with IATA on NDC to get to a wider range of airlines on board.” While he was positive on the initiative he reminded the audience that some 25% of airline traffic generated today by low cost carriers (non IATA members) were already operating through XML connections and he added: “Today low cost carriers connect more through XML than the rest of carriers in the world. I can’t see those airlines moving to NDC unless they want to do more inter-airline”.
Panel Participants (left to right): Matthew Baldwin, Aviation Director, European Commission;
Alexandre de Juniac, CEO, Air France/KLM; Christoph Mueller, CEO, Aer Lingus;
Gordon Wilson, President and CEO, Travelport Limited; Nick Vournakis, Senior Vice President, Global Marketing, Carlson Wagonlit Travel; Vincent Harrison, Director Strategy, Dublin Airport Authority (DAA)
An area briefly discussed by the panel related to the hesitation about sharing passenger booking details among different industry players, which seem to be creating frustration for passengers experiencing disruptions during their travels. Nick Vournakis, Senior Vice President, Global Marketing, Carlson Wagonlit acknowledged there was an opportunity to take a look at this information is communicated among the different travel partners. “We have a good standard and there is no shortage of passenger information captured through the profile in the corporate context. However there is a lot of room for improvement on how we decide to communicate when there is a disruption since we also want to avoid bombarding customers with pieces of information.”