Flexibility key to Recovery for Loyalty Vendors
Along with the rest of the industry, airline loyalty programs are struggling to deal with the impact of the COVID-19 crisis. This First View looks at why loyalty is a key area to drive recovery.
15/04/2020
Amadeus Scheduling Moves to the Next Level
Amadeus and Optym have announced that the airline network planning business of Optym has been acquired by Amadeus. This First View looks at what this acquisition means for the industry.
17/02/2020
Technology - Innovation and Standardisation in the Airline Industry
NDC and ONE Order represent a new generation of technology for airline distribution, but they
build on a long tradition of airlines working together to create standards that allow them to
inter-operate to serve common customers. T2RL's latest research examines the need for standards in the industry. We look in some depth at the work that Amadeus, the leader in airline commercial technology, is putting into delivering the new standards to benefit the whole value chain in airline distribution.
25/11/2019
IBS acquires AD OPT
On September 10, 2019, IBS Software announced that it had completed the acquisition of AD OPT. This First View looks at what this acquisition means for the industry.
25/11/2019
AGIFORS Symposium 2019
The annual Symposium from AGIFORS (Airline Group of the International Federation of Operational Research Societies) was held in Seattle, USA from September 30 to October 4, 2019. This First View looks at the presentations given at the forefront of tech research in the airline industry.
17/10/2019
Aeromexico extends Sabre PSS and confirms participation in Sabre's GDS Services
Aeromexico have renewed and extended their PSS and GDS agreements with Sabre. T2RL supported the process on behalf of Aeromexico and are therefore unable to provide any additional insight or commentary.
14/10/2019
ATPCO Continues its Reinvention
T2RL attended the ATPCO 'Elevate' customer conference in Washington DC on October 1st and 2nd. In this First View T2RL looks at ATPCO's recent activity and why they are succeeding in their reinvention.
07/10/2019
DOJ Moves to Block Acquisition of Farelogix by Sabre.
T2RL's view is that there is a broader market to consider in connection with the merger and that a combination of Sabre and Farelogix would permit Sabre to compete more effectively with Amadeus in the provision of IT solutions to airlines outside the United States in particular. Farelogix would provide the ability to replace some of the core technology that underpins the GDS and PSS infrastructure specifically accountable documents including ancillaries, real-time availability processing and commercialization of the schedule. Farelogix would accelerate Sabre's transformation to new generation systems.
At the core of the DOJ argument is a different definition of a market. T2RL does not understand how the DOJ came to assess booking, ticket issuance and the channel chosen by customers as distinct market places. To call out traditional agents and online agents and booking services in those channels as markets will undoubtedly be part of the upcoming dispute. Airlines ultimately appoint travel agents to issue tickets and the GDSs contract with travel agents to supply technology services. Other channels are available to consumers and corporations in the US and other geographies making this part of the argument a little more complex. The channels available to airlines (assuming they have the IT infrastructure to support this) include direct channels and APIs (NDC flavoured or not) and travel agents choose to work directly or indirectly with the airlines according to a set of their own criteria, including customers and passengers needs. It is also clear that some airlines can and have negotiated their GDS agreements which contain the right to charge fees and pass those fees on to the customer to incentivise them to move to the direct channels. This has certainly been the case in Europe with IAG's airlines, Lufthansa Group and Air France / KLM.
Elsewhere airlines are developing private channels which see incentives paid by airlines for bookings to the travel agent. There is no doubt that the market definition will be debated by both parties in the coming weeks and months as Sabre responds to the complaint and pushes to obtain a judgment to go ahead with the purchase. The exact timing of the litigation is not currently known, as the parties will be working on a protective order (i.e., determining what information will be kept from public court filings) and a timeline for the proceedings.
Typically the hearing before the judge in such cases is held within a 2 to 6 month time frame. If Sabre fail to win the battle there will be a long queue as others will seek to purchase Farelogix including a list of private equity houses.
The Department of Justice in the United States has sued to block the acquisition of Farelogix. The DOJ's complaint points to the likelihood of the acquisition resulting in a lessening of competition, an increase in prices for booking services in the United States and a reduction quality, service choice and innovation for booking services. The DOJ also takes the position that Sabre's GDS agreements have restricted Farelogix's ability to compete.
22/08/2019
Southwest inventory available in Amadeus and Travelport for industry standard processing.
After years of participating at the lowest functional level in Sabre and Travelport GDSs, Southwest have announced new partnerships with new capabilities to support industry standard processes for TMCs and corporates with Amadeus and Travelport. The announcement highlights the importance of the corporate business by signalling incremental revenue expected in 2020 and a basic timeline for GDS readiness in mid-2020. Southwest Business are focussed on a set of customers that are likely to appreciate Southwest's policies with respect to no change fees and free bags. This complements the recent announcement for participation in NDC and of course builds on the decision to move to Amadeus PSS some years ago. T2RL see this announcement as a win for newly appointed CEO of Travelport Greg Webb and his team. The announcement will also reinforce the value of the GDS business at a time when there has been significant press around the continued demise of the GDS as a result of NDC. T2RL does not share the view that GDSs are end of life particularly given the importance of Amadeus, Sabre and Travelsky in provisioning the PSS solutions that support distribution and will be even more important when NDC receives broad adoption.
06/08/2019
6 Billion Revenue Passengers Boarded by 2023
T2RL has just released its projections for the passenger air transport market out to 2029. They show growth from 2018's 4.47 Billion passengers boarded to 6.06 Billion in 2023 and almost 9 Billion in ten years' time.
05/08/2019
Cebu Pacific Renews with Navitaire until 2028
Cebu Pacific has extended their existing agreement with Amadeus' Navitaire until 2028 and will continue to use Navitaire's reservations, inventory, departure control system, e-commerce and revenue accounts platform. Cebu Pacific is one of Navitaire's key customers in the Asia Pacific region undertaking 20.3 million PBs in 2018 including franchisee Cebgo. This renewal follows other key renewals for Navitaire this year including the AirAsia Group, Eurowings and Spirit.
09/07/2019
FLIGHTKEYS: Advancing the State-of-the-Art in Flight Planning
In a briefing from Senior Management T2RL have learned that FLIGHTKEYS GmbH will soon launch its new Flight Planning solution, FLIGHTKEYS 5D, and announce launch customers. In this First View, T2RL assesses FLIGHTKEYS' new solution and the impact it may have on the industry.
26/06/2019
Sabre partners with Cheetah for Loyalty
Sabre have been executing on their plans to rationalise their airline technology product portfolio since Dave Shirk was appointed as the President of Sabre Airline Solutions in April 2017. Shirk has since been promoted and now also runs the GDS business. The deal with Cheetah makes great sense to T2RL as part of the product portfolio rationalisation. Loyalty solutions are now considered mainstream IT platforms "off the shelf" with all of the necessary integration support for all types of merchandising and customer touch points. Ultimately the partnership will only work if the combined Sabre / Cheetah teams win business from the existing players in the market place. T2RL's research suggests that in-house developed systems still dominate the airline loyalty landscape with approximately 27% market share, followed by Oracle with some 19% share and Comarch third with approximately 7%. At first glance this looks like another smart move from Sabre in picking a market place with significant in-house systems and it appears one of the more advanced vendors according to Forrester Research. T2RL will follow this solution and report to subscribers on market performance in our future reports on market share for loyalty solutions in the airline business.
24/06/2019
GE Aviation: Playing the long game
GE Aviation has been the global leader in commercial aircraft engine deliveries for many years. On 18-21 February 2019, it hosted a conference in Dallas, around the theme of using data to generate insights. In this First View, T2RL look at GE Aviation's strategy moving forward and how they plan to add value from insights obtained from data.
11/03/2019
ONE Order may bring value - eventually
IATA continues to promote its new standard for communications between Order Management Systems, delivery and accounting systems. There have been some limited proof of concept projects and a number of airlines have committed publicly to the new standard. In this First View, T2RL look at what is needed to make this standard a success and what it might mean for the industry in the long term.
07/01/2019
Blockchain has not yet found its problem
Airlines, like many other enterprises, are currently subject to extensive marketing on behalf of blockchain technology providers. In this First View, T2RL looks into this new technology and where it could possibly be used by an airline.
04/01/2019
A Smart Move at Sabre
On 14th November 2018 Sabre Corporation announced that it had agreed to acquire Farelogix for $360 million in cash. The acquisition is subject to regulatory approval and is expected to close around the turn of the year. In this First View, T2RL assess the impact that the acquisition will have on customers on both sides and the industry as a whole.
07/12/2018
Margrethe Vestager EU Competition Commissioner turns her attention to Amadeus and Sabre
The EU Competition Commissioner Margrethe Vestager has announced an investigation into whether the practices at Amadeus and Sabre have resulted in harm to consumers through increased fares. This investigation was not unexpected. The investigation will focus on the GDS agreements with airlines and agents. It appears to specifically target any restrictions the contracts have with respect to new technologies and new methods of distribution and that this in turn drives up the price of the tickets. T2RL believes this will be a very challenging investigation for the EU. Sabre's timing for the purchase of Farelogix seems to be timed almost perfectly as no doubt Farelogix had been one of the specialist firms offering new technology for airline distribution. Ultimately airline distribution is complex and much more about absolute values of revenue less distribution cost than averages. T2RL will follow this case closely in our research and analysis. Stay tuned to www.t2rl.net.
23/11/2018
AGIFORS - Revenue Management remains main driver of Airline Research
The most recent annual AGIFORS Symposium took place in Tokyo on 8th-12th October 2018. The conference attracted some of the top minds in aviation operations research, discussing innovative topics which have the potential to create value for airlines in the future. Given the topics of discussion and through T2RLs own experience, over the next few years T2RL expect that Revenue Management will continue to be the most productive area, in terms of both revenue gains for airlines and increased R&D investment by system vendors.
09/11/2018
Sky Angkor Airlines migrates to Travelsky’s QUICK Passenger Retailing System
Sky Angkor Airlines from Cambodia has migrated from AeroCRS to TravelSky's new QUICK (PRS) Passenger Retailing System. Sky Angkor Airlines is the first airline to migrate onto TravelSky's new QUICK platform which was launched at the end of 2017. QUICK PRS was developed over a period of 2 years, and supports the initiative of increasing TravelSky's global presence.
06/09/2018
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