The airline content and data provider is combining seamless retailing with the benefits of dynamic pricing with the interoperability of traditionally filed fares.
ATPCO, the airline pricing, content, and data distributor, kicked off day one of its Elevate 2019 conference with a pair of announcements designed to address commercial aviation’s need for more up-to-date retailing strategies and the adoption of real-time pricing for bookings and passenger amenities.
The global expansion of ATPCO’s Next Generation Storefront (NGS) standard includes the development of new advisory boards in four international markets. The expansion comes one year after ATPCO first unveiled its intent to develop the NGS standard.
“It’s astonishing to think it’s been only a year since, together with ATPCO, American Airlines, United Airlines, and Delta Air Lines introduced NGS as a concept at Elevate 2018. The incredible traction and momentum that has built over the past year, from agencies and customers of all shapes and sizes, speaks to the growing need for retail transformation across all channels,” said Jeff Lobl, managing director of Global Distribution Strategy at Delta Air Lines, in a statement. “Thanks to NGS, the age of single-product shopping is finally coming to an end.”
As for the changes to ATPCO’s model for dynamic pricing, the company will now enable airlines to complement their standard pricing (i.e., pre-filed fares) with new dynamic pricing models that will significantly increase the speed at which airlines can get more price points out to the market – including personalized pricing to consumers. This new model will enable an airline to implement one or more different dynamic pricing approaches based its individual infrastructure and strategy.
The launch of NGS at last year’s Elevate reflected the need for its airline owners to ensure that the bookings they offer on Global Distribution Systems like Sabre, Travelport, and others will be presented the same way on carriers’ branded websites. In essence, it’s akin to offering a seamless digital storefront in much the same way franchise locations of brick-and-mortar chains make sure that the offerings of a Starbucks in one city doesn’t appear dissimilar to one in a different place.
The new advisory boards will consist of airline and distribution leaders who represent over 50 percent of flying capacity in each region where the standard will be applied. Each group will have oversight in creating and ratifying the definition of the NGS standard for its respective region.
Members of the new advisory boards include Ctrip.com, Air China, British Airways, Virgin Atlantic, Skyscanner, and CWT, along with American Airlines and Delta Air Lines. ATPCO expects more members to be announced in the coming weeks.
“The U.S. domestic evolution of NGS went at such an incredible pace and achieved success earlier than we were expecting,” said Gianni Cataldo, Head of R&D at ATPCO. “Our plan was to create the first standard here in the U.S. and then expand into international markets. The fact we are doing this one year after initially unveiling the standard, is something to be proud of. The positive industry reaction to, and participation in, what we are building has been incredible. We are really motivated to now branch into new markets based on the impressive interest shown by our partners globally.”
The expansion of the NGS standard follows last month’s ATPCO update that eliminated the “star-rating system” that defined each virtual store shelf for the airlines.
That change kept the NGS shelf system, which uses ATPCO Routehappy Rich Content data to group like-type products together on six shelves that are displayed in value order from left to right. But GDS sales channels now have more freedom to design visual identifiers and customize the label for each shelf’s common data elements. Instead of a star rating system, that identifier can now be a custom combination of text, icons, or graphics, as long as it clearly indicates the commonality and progression of the six shelves.
“We have been watching closely, the trial implementations of the U.S. domestic standard as it evolved. Now that version one of the U.S. domestic standard is complete, we jumped at the chance to be involved with shaping the APAC and Transpacific standards. It’s important to ensure all voices are heard in an equitable way, both channels and airlines,” Lyrics Zhao, director of Product and Business Development on Air Ticketing at Ctrip, said in a statement. “This standard can greatly help OTAs differentiate offerings that airlines are investing in, to indicate different service levels customers have access to, in an obvious and unified way. We are excited to be included in the conversation and planning.”
Fei Jia, manager of Product and Services, Product Design, Sales at Air China, echoed Zhao's comments.
“Comparison shopping on third party channels has generally not shown all the investments in our products and fares," Jia said. "NGS is solving this problem and we are pleased to have a seat at the table in determining how the standard should be presented in the Asian market. Given the market differences between APAC, EMEA, and the U.S., we are encouraged to see ATPCO isn’t implementing a one-size-fits-all approach to the standard. We look forward to bringing our perspective to the advisory board.”
ATPCO is promising an “enhanced model” for its dynamic pricing capabilities. Now airlines using ATPCO’s pricing tools will be able to complement their pre-filed fares with offers that can be personalized and targeted in real-time.
The new approaches will significantly increase the speed at which airlines can get more price points out to the market, including personalized pricing to consumers, an ATPCO rep said.
Under this new ATPCO initiative, an airline can run a variety of dynamic pricing strategies based on each airline’s individual programs.
“With these enhancements, ATPCO is able to provide the benefits of dynamic pricing with the interoperability of traditionally filed fares,” said ATPCO CEO Rolf Purzer.
The model is made up of three different approaches.
- The first approach expands ATPCO’s standard pricing with pre-determined offers. It is now known as Optimized Pricing, which enables an airline to increase the number of price points with Dual RBDs or more frequent updates using machine learning and upload APIs. The second approach is Adjusted Pricing, which uses an airline’s
- Dynamic Pricing Engine (DPE) to choose pre-filed fares (DPE Predefined Price) or adjust a filed product (DPE Generated Price).
- Continuous Pricing, which is the third approach, enables fully personalized offers with minimum/maximum pricing or bid pricing.
“The promise of dynamic pricing is to increase yield for airlines through targeted offers that meet consumer expectations,” Purzer added. “As an industry resource, we’ve had the privilege of working with academia at MIT, industry bodies, pricing experts, and others to develop an approach that combines the best of this future vision with the interoperability of today’s systems. Our goal is to provide more value to airlines and systems by enabling more choice to consumer. We are now making this vision a reality.”
While dynamic pricing and other forms of automated, artificial intelligence programs have been the foundation for online advertising for over a decade, the aviation sector has been rapidly attempting to catch up.
“The journey to personalization in the airline industry has begun, but this is a marathon, not a sprint, and we are just at the starting line,” said Aldo Ponticelli, Head of Distribution Strategy & Systems Support at Alitalia, in a statement. “Airlines want more flexibility, but we are somewhat constrained with current systems. To see ATPCO leverage its resources to create a model and framework that gives airlines more choice means each airline can move at the pace it needs. With the help of ATPCO, the next 12 months in pricing should be an exciting one to watch and but be a part of.”
ATPCO initially began initial dive into dynamic pricing with a white paper in 2015. It then set up the Dynamic Pricing Working Group, which includes more than 300 participants from 90 organizations.
The group has defined and delivered into production over 30 implementations of dynamic pricing, with the stated goal of demystifying dynamic pricing through experimentation and trials that lead to implementation patterns that work across all channels, and are fully compatible with traditional pricing to ensure servicing, settlement, and support are not disrupted, ATPCO’s rep said.
“Over the last two years we have supported airlines in their need to become more agile in their pricing and provide more structural support for their products. We have already seen over 30 airlines implement Optimized Pricing via the ATPCO infrastructure,” said Thomas Gregorson, ATPCO’s chief strategy officer. “This number will only increase with the new simplified model, giving airlines more flexibility and choice of what and how to price across a spectrum, instead of pigeon-holing them in only one system, by providing tested frameworks for each airline to innovate and change their individual pricing approaches.”
ATPCO has also launched its Adjusted Pricing Implementation Guide, with the full package of standards being defined hand-in-hand with the industry.