innovation in distribution · 100 years of aviation 3 "i like to think that if i'd been...
TRANSCRIPT
Innovation in DistributionEye for Travel Digital Summit 2018
Keith WallisDirector, Global Product Distribution
April 9th, 2018
Who am I?
• Director of Global Product Distribution at Air Canada
• AC representative and Chair PDMG
• Proud father of 3 children (seemed like a good idea at the time)
• Love scuba diving, watching All Blacks Rugby and F1 Racing
• Finished first 5K race with my wife in 0:30:47
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100 Years of Aviation
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"I like to think that if I'd been at Kitty Hawk in 1903 when Orville Wright took off, I would have been farsighted enough, and public-spirited enough--I owed this to future capitalists--to shoot him down. I mean, Karl Marx couldn't have done as much damage to capitalists as Orville did.”
Warren Buffet (1999)
Aviation History….
The first commercial took off on January 1 1914• Route: St Petersburg à Tampa• Flight time: 23 minutes• Distance 18.6 miles• Aircraft: Benoist flying boat• Customer: Mayor of St Petersburg
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1914
$400
2017
$9960
US Airline Graveyard
“A” OnlyAAXICO Airlines (1946 - 1965, to Saturn Airways) Access Air (1998 - 2001) ADI Domestic Airlines Aeroamerica (1974 – 1982)Aero Coach (1983 – 1991)Aero International AirlinesAeromech Airlines (1951 - 1983, to Wright Airlines) AeroSun InternationalAFS AirlinesAir America (operated by the CIA in SouthEast Asia) Air America (1980s)
Air Astro
Air Atlanta (1981 - 88) Air Atlantic AirlinesAir BamaAir Berlin, Inc. (1978 – 1990)Airborne Express (1946 - 2003, to DHL) Air California, later AirCal (1967 - 87, to American) Air CarolinaAir Central (Michigan)Air Central (Oklahoma)Air Chaparral (1980 - 82) Air ChicoAir ColoradoAir CortezAir Florida (1972 - 84)
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US Airline Graveyard
Still “A”Air GeminiAir GeneralAir Great LakesAir Hawaii (1960s)Air Hawaii (ceased Operations in 1986)Air HyannixAir IdahoAir IllinoisAir IowaAirlift International (1946 - 81) Air KentuckyAir LAAir-Lift CommuterAir LincolnAir Link AirlinesAir Link AirwaysAir Metro
Air MiamiAir MichiganAir Mid-AmericaAir MidwestAir MissouriAir Molakai (1980)Air Molakai (1990)Air Molakai-Tropic AirlinesAir NebraskaAir NevadaAir New England (1975 - 81)Air New Orleans (1981 – 1988)Air Niagara Air North (Alaska)Air North (1963 - 83, to Brockway Air) Air O’HareAir OlympiaAir Oregon
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US Airline Graveyard
Still “A”Air One (1990s)AirPacAir Pacific (USA)Air PennsylvaniaAir Resorts AirlineAir SierraAir South (1968 – 75)Air South (1981 – 1982)Air South (1986 – 1987)Air South (1994 – 1997)Air Speed (1974)Air SpiritAir Sunshine (1970s)Air Sunshine (1980s)Air TexanaAir TexasAir Trails
Air 21Air USAir UtahAirVantage AirwaysAir Vegas (1971 – 2004)Air VermontAir VirginiaAirways of New Mexico Air WestAlaska Air Transport (1935 – 1939)Alaska Coastal Airlines (1939 – 1968)Alaska Coastal-Ellis AirlinesAlbany AirAll American Aviation Company Allegheny Airlines (became US Airways) Aloha AirlinesAmerica West Airlines (1981)America Central Airlines
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US Airline Graveyard
Still “A”American Export AirlinesAmerican Flyers Airline American International Airways American Overseas AirlinesArista International Airlines Arizona Airways Arizona Airways (1993-1996) Aroostook Airways Aspen Airways (1962 - 90) ATA Airlines (1973 – 2008) Atlantic Coast Airlines (1989 - 2004)Atlantic Gulf Airlines
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129 airlines 1979-1999
As of 1992, the money that had been made since the dawn of aviation by all of this country's
airline companies was zero. Absolutely zero.
Warren Buffet (1999)
In the US, airlines have made an overall cumulative loss over the past 120 years. Flying has always been about a kind of
pig-headed denial of observed reality.
Peter Morrell (2006)
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Transforming into a Global Champion
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Path to Global Champion
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Financial Stability
• Pension solvency surplus
• Record financial results
• CTP
• CASM reduction
• Lower debt
Fleet
• Modern WB fleet
• Seat densification
• Swing capacity
• NB fleet replacement
• Award-winning product
Network & Hubs
• Extensive & expanding global network
• Geographicallywell-positioned hubs
Air Canada Rouge
• Competitive cost structure in leisure markets
• Provides new growth opportunitiesLabour
Stability
• Long-term agreements with all major unions
• Increased flexibility and cost certainty
Regional Feed
• Diversification
• More competitive cost structure atJazz
Loyalty
• Improved customer experience
• Significant financial value to Air Canada
• Credit card RFP
Solid foundation allows Air Canada to leverage its unique competitive advantages
Product
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Branded Fares
• Fare Brands were introduced by Air Canada over 10 years ago
• Ancillary products based on our Fare Brands followed shortly
• The commercial strategy was to base the Fare Brands and their associated ancillary offers on a booking class
• All Fare Brands were made available right up to last seat availability
• Over time, other changes have impacted the commercial proposition– Re-nesting of booking classes has resulted in Tango and Flex closing before last seat– PROS requires complete control over booking class inventory to maximize revenue
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A Product for Everyone
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Distribution
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Selling to the outside world
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• Revenue Management pushes fares to ATPCO
• Network Planning pushes schedules to OAG
• GDS extract this data and package it together in a generic format for the end user
• AC isn’t involved in the transaction at all
• AC receives an anonymous sale at the end of the process
Regaining control
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PNR
TravelAgent Aggregator
Shop
Offer
Order
Receipt
Offer Management
Order Management
NDC
EMD
ET
ONE ORDER
AIRLINE SYSTEMS
As the airline industry takes full advantage of the product creation opportunities
created by NDC, One Order is designed to simplify the product delivery process
Merchandising
Pricing
Airlines need to insert themselves into the economic transaction
Airlines need to leverage relevant ancillary and bundled products for increased
revenue
What is NDC?
• NDC is a travel industry supported effort launched by IATA for the development and market adoption of a new, XML-based data communication standard
• NDC will enhance the capabilities of communications between airlines and travel agents• NDC is open to any third party, intermediary, IT provider or non-IATA member
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Delivery
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Hitting EVERYTouchpoint
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CRM and Loyalty
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1Create a single view of all customers (current & prospect)
2Redesign and optimize our digital channels
3Personalize customer content, offers, and services
Grow revenue & customer service through enhanced engagement
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Strengthening Customer Loyalty Through Digital Experience
Create a Single View of All Customers – Our Strategic DataVision
OfflineMedia
Website
App
Social
Advertising
Kiosk
Text
Call Center
Create a holistic view of the customer and their journey covering the online, offline &on-board worlds
Enables advanced analytics to support decision-making
Future Loyalty program and PSS system data will complete the CRM
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CRM Loyalty Reservations Operations
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2 3
Redesign and Optimize Digital Channels
Standby/Upgrade80%in mobile revenue
YOY Jan-July 2017 vs. Jan-July 2016
~50%Off-Airport check-in; mobile
now largest channel (+~40% YoY)
15 weeks to buildTime from start to betabuild - Concept, design,
dev & QA with agile on our newest app
Redesign & optimize our digital channels… Mobile investments achieving revenue growth & behaviour shift
Personalize customer content, offers & services Connecting data analytics to our channels increases relevance
Consumer Segment B Occasions : Business Frequency: 12 Customer Value: $$$$
Consumer Segment A Occasions : Leisure Frequency: 2Customer Value: $
Available Segment A
Offer Content
Available Segment B
Offer Content
Available Segment…OfferContent
Segment:…
Monetize customer data by enabling “personalized” offers and services based upon context, customer behavior and commercial value
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Data and Digital are Fuel for Air Canada’s Future Growth
• Data can drive a virtuous cycle ofgrowth
• Airlines already have access tosignificant amounts of data
• Users now engage across loyaltyprograms, partners, devices, and digital platforms, leading to explosive growthof data collection
• Data is transforming Air Canada byenabling the transition from a channel-and product-based approach to acustomer-based approach
2.5 quintillion bytes of data are created daily
(Source: International Personal Data Trade Association)
Better Data Analytics
Personalized Offers & Loyalty;
Better Digital Products
More Customers& Users
Even Richer Data
Strong Sustained
Growth
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Customer Experience
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Investing in Our PeopleImprove customer service through increased engagement
Recognize the strong relationship between employee engagement & customer experience
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Exceptional Customer Experience
• Our greatest asset, an engaged Air Canada Team
• Safety First, Always
• Be a Top 10 Airline in Everything We Do
• Share the Best of Canada Around the World
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Who wins?
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Product differentiation• Marketing the richness and uniqueness of airline products• Marketing personalized offers
Access to full and rich Content• Compare flight products based on schedule, price AND value• Work with real-time product and fare data
Transparent shopping• Deliver the right products at the right prices • Offer each traveler the opportunity to shop based on what they
value – be it anonymous or personalized
Airline
Agent
Customer
