Datalex's Chief Revenue Officer & Chief Product Officer discuss the transition to 100% Offers & Orders, Order Management as a standalone capability, Artificial Intelligence and NDC
Bryan: Hi Conor! So, it's been a busy couple of months for us travelling around the world to London, Lisbon, and Chicago for T2RL, World Aviation Festival and IATA's World Passenger Symposium. One of the things that we've been talking about over the last couple of weeks is how many of the same seeds we've encountered at each of these different events. So, I wanted us to have a conversation about that and explore it a little bit further.
Insight #1: Transitioning to 100% Offers & Orders
Bryan: Conor, a lot of the content we saw at each of these events was heavily focused on the move to 100% Offers & Orders. What insights did you get from that?
Conor: Yes definitely, the primary theme that everyone was talking about at these events was the transition to 100% Offers & Orders. Not only are vendors talking about it but so are the majority of airlines, and they're investing time with consultants in terms of what their strategy should be. What hasn't happened quite yet, and which was very obvious in each of those three conferences, was that there hasn't yet been a volume of RFP's coming through in this space. But, it’s very clear airlines are preparing for a future world of offers and orders. Within that future world of offers and orders, there's a couple of key things that they repeated and that was that it's the transition state that's going to be the most important position for them; How did they manage this transition state or as some people call it, the double bubble as they transition through it, how will that look? How far should they go? All of that was a key theme that came up over and over again at each of the conferences.
Insight #2: Order Management as a standalone capability
Bryan: Yes, good insights. One of the other things that we came across, especially when we started talking to individual airlines, is that a lot of them have gone quite far down the road in terms of their offer management capability. What they're doing now is starting to take a look at the order management capability slightly differently and as more of a stand-alone capability rather than a single approach to an offer management system. What are your thoughts on that, Conor?
Conor: Yes, great point Bryan - a lot of airlines talked about their desire for a standalone order management capability. There are vendors in the market like Datalex, and there are airlines who've done some of their own offer work too, who have best in class offer management platforms already. However, what airlines are looking for now is a standalone order management platform; something that Datalex has at the moment. What they're really asking for is a technology stack that is modular and to get a modular stack, they want to take the best in breed solutions across both vendors, or internal workings, that can deliver best in class across the board.
Insight #3: Continuous Pricing
Bryan: Absolutely. One of the other things that came up quite a lot when we started speaking about offers was continuous pricing. I think quite a few airlines have taken some initial steps towards continuous pricing but haven't necessarily reached that Holy Grail of dynamic offers. Where do you see this going?
Conor: Yes, I spoke a little bit on stage about the world of AI at T2RL Engage. We talked about it in two buckets; there's the bucket of what's in production today and the bucket of what we're doing. The bucket of what we're doing is much bigger than what's in production today. The airlines that are doing continuous pricing have decided to go to either one or two camps. They've introduced AI from a continuous pricing perspective within the legacy world; so, the optimization of legacy processes and ATPCO, or they've gone with the offers and orders approach. An offers and orders approach is in real time determining what the optimal price should be, based on the data you have and using deep learning AI.
If you want to move to a world of offers and orders, you have to be looking at that second approach. You can't be looking at optimising the legacy of today. And so that is the application we've put into production and seen some fantastic results between 2 and 4% revenue uplift. However, there is an application for AI throughout the process going beyond pricing into the world of dynamic offers or dynamically bundled air offers, through to order management, and generative AI in your call centre and applications. There's lots of opportunity to use AI but again, the final point stresses, do not use AI for AI sake. Come up with a use case to determine what is the value you want to create and if AI is the best technology to do that, of which it is in many cases, then that's where you should do it.
Bryan: Yes, it's all about moving up through maturity curve, isn't it?
Conor: Exactly Bryan.
Insight #4: The industrialisation of NDC
Bryan: Talking about maturity, one of the other key points was NDC. How could we have a conversation like this without mentioning NDC! One of the things that we're seeing is that there are a small number of airlines who are now really starting to see the industrialisation of NDC. So, when I talked about that on stage at World Aviation Festival, I spoke about adopting NDC at scale and actually seeing it becoming one of their primary channels of distribution, what did you find at the conference that there aren't NDC?
Conor: Really good point Bryan. At these events you could see versus previous years that there are a small number of airline s who are really seeing large volumes of their traffic now starting to transition over to NDC.
The really strategic airlines are considering NDC not just as a way to move away from the world of EDIFACT and things like that. They're looking at this in the offers & orders world where they're going to use NDC and their direct consumer websites, mobile apps etc, to use the same underlying offer & order capability across all channels. They're building a future where their NDC and direct channel both use the same consolidated offer & order system underneath in order to get to a true world of offers & orders. They're the ones who have gone into this very strategically and are looking at it in a future of offers and orders.
Insight #5: The industries return to profitability
Bryan: Thanks Conor, I agree. One of the key takeaways that I've got, at least from an economic perspective, is that the industry has really returned to profitability in 2023. What would you say about the outlook for 2024 and beyond?
Conor: Yes, it was fairly bullish in most of the updates that were given throughout the events. They talked about a full recovery in 2024, and if you looked at some of the presentations particularly at the IATA WPS event in Chicago, they talked of 2023 being just shy of 2019 levels. However, 2024 is when we're coming back to the original full recovery as we're calling it, which is normalised back to 2019. So that’s really it in a nutshell - Airlines will be back to profitability, although low and thin margins, in 2024!
Bryan: Fantastic. Thank you, Conor.
Conor: Thank you very much, Bryan.
Datalex – Who are we?
Datalex's purpose is to transform airline retail. Datalex is a market leader in airline retail technology, offering unique products that enable airlines to drive revenue and profit as digital retailers. Datalex has a strong track record of delivering digital retail transformation for progressive airline brands worldwide. The Group is headquartered in Dublin, Ireland, and maintains offices across Europe, the USA, and China. In 2023, Datalex was awarded the 'Great Place to Work®' and 'Best Workplaces in Tech™' certifications. Datalex plc is a publicly listed company, on Euronext Growth, Dublin. Learn more at www.datalex.com
