The future of flight distribution is entwined with the industry’s future profitability. Therefore, every flight agent needs to be aware of how distribution is developing.
Airlines want to dramatically increase the effectiveness of their sales strategy. In order to maximize revenue, sales techniques are becoming increasingly customer-centric. For example, the IATA has predicted that by the year 2021 airline distribution will transition from passive structures to a dynamic, flexible and highly personalized environment. As such, flight agents and their colleagues in marketing, management and IT should anticipate turbulent changes. These shifts will encompass everything from technological capabilities, to customer behavior, to the nature of the competition. Here, we run down 5 things every flight agent needs to be ready for as the industry evolves.
1. Agents need to be ready to serve a more diverse client base
The airline industry’s clientele is changing. As customers from emerging markets such as China and India gain more and more buying power, brands need to be ready to meet their needs. Looking to European and North American markets, there are a greater number of consumers from the over-65 age group. Equally, airlines need to prepare to serve these customers and their specific requirements. As such, airline direct channels, travel agents and aggregators need to create intuitive, engaging booking journeys.
2. Every flight agent needs to be able to utilize rapidly evolving technologies
Technology is advancing at an incredible pace – by 2021, it is likely that flight distribution systems will have to integrate with numerous new platforms. For example, mobile devices alone will demand numerous new technologies, such as voice recognition capabilities and facial recognition software. Furthermore, artificial intelligence is set to play an increasingly important role. Specialized algorithms will enable the dynamic pricing and personalization capabilities that airlines need to market a compelling product.
3. Third-party platforms will remain pivotal to distribution models
Although direct channels are a focus of airline marketing strategies, OTAs and third-party retailers will remain relevant. According to the IATA report, by 2021 direct channels will account for 45% of tickets sales, up one-third from 2016. In addition, travel management companies are likely to grow, whereas agencies and OTAs are likely to see small declines in their market share.
4. Traditional distribution components will be outmoded
As technology becomes increasingly sophisticated, so will components of the distribution chain. Therefore, every flight agent needs to be familiar with modern distribution protocols. For instance, the developing distribution environment will see a decline in the need for pre-defined fares and third-party retailers will rely less on stockpiled inventory to manage demand.
5. Google will become increasingly omnipotent
Of all of the third-party agents currently involved in the online distribution market, Google is likely to be the most powerful disruptor. Google has the capital, development talent, and brand visibility to play a significant role in the future of airline distribution. These capabilities are becoming increasingly visible as Google integrates flight search capabilities into its interface.
Numerous changes are on the way for flight distribution. As the IATA indicated, the aviation industry needs to be fully prepared for them all. As a flight agent, your business needs to adapt processes, business cultures and strategies in order to respond to the challenges the future holds.