“All players are continually looking for ways to attract and retain loyal customers. In the end, it will be a question who owns the consumer and I think that verdict is still out,” says Infare’s Harald Eisenaecher. “Airlines sometimes claim that the GDS model has not made it easy for them to own the consumer. In my opinion, there is some truth to it, but it is not a holistic picture.”
Turning “Big Data” into actionable, “smart data” and using dynamic pricing to target personalized product messages to consumers has been the province of e-commerce players like Amazon for over a decade. It’s been widely acknowledged that the airline industry has had mixed success in attempting to catch up.
Denmark-based Infare, a company that analyzes pricing data for airlines, airports, and online travel agencies, is working to close the gap between e-commerce pioneers and carriers.
In a career that has covered the rise of e-commerce along with the evolution of airline retailing strategies, Harald Eisenaecher, Infare’s chief commercial officer, has been looking closely at the ways airlines have been making their adjustments. We caught up with Eisenaecher earlier this fall to get a sense of what the challenges and opportunities are for airlines in 2020 amid the wider adoption of IATA’s New Distribution Capability, the growth of ancillaries, the expansion of low-cost carriers, and the demand from all quarters for true digital transformation in the travel space.
Kambr Media: What is Infare, and what makes the company’s services unique?
Harald Eisenaecher: Infare is a leading data and technology company, providing global airlines and other travel industry players with meaningful competitive information converted into real-time pricing intelligence.
Aside from the day-to-day logistical and operational challenges, airlines must ensure that they maintain and improve yields to achieve profitability and long-term financial sustainability. Airlines have to sell their seats and all other ancillary services at the best price possible for every customer. To be successful, it’s crucial they think and act like best-of-class e-retailers, offering more choice, increased personalization and price points that respond dynamically to customer demand.
At Infare, we have one simple core belief: airfare benchmarking data empowers pricing intelligence.
Today, our data delivers total market and customer insight with the most comprehensive dataset of current and past airfares, empowering airlines to make smarter pricing decisions and create tailor-made offers for every customer. Every day we collect more than 2 billion unique airfares and distribute 3.5 billion observations, allowing our customers worldwide to drive decision making on pricing. On top of that, we have the largest historical airfare database in the world.
The company is constantly innovating, and our vision is to provide complete insight on all pricing components, to any channel, in a cost-effective way. This will give executives a much deeper understanding when it comes to price and ensure airlines can truly make data-driven decisions which maximize revenue per seat and secure higher margins.
Infare’s knowledge and experience are unmatched in the industry and what we do is more important than it’s ever been.
What was your background? How did you come to join Infare?
I joined Infare in February 2018, as Chief Commercial Officer, to lead the commercial organization globally. I am also a Member of the Advisory Board at Setoo, as well as a Board Member at Ifolor Group and Groz-Beckert.
Prior to joining Infare, I held senior executive positions with travel, technology and data businesses. On the Sales and Marketing leadership side of the business, I was most recently the Senior Vice President for EMEA at Sabre, a leading technology provider for the travel industry, and previously held roles at Lufthansa Group, eBay and Deutsche Telekom.
I have a real passion for innovation and customer-centricity and strive in hyper-growth driven organizations. Joining Infare felt a natural move to me.
How has Infare evolved since its founding in 2000?
Infare was founded in 2000 in Copenhagen, Denmark, by three entrepreneurial leaders, which includes our current CEO, Nils Gelbjerg-Hansen. At the time, the focus of the company was on competitive monitoring for airlines. This was initially from a B2C standpoint, but it transitioned quickly into a B2B model.
Since then, the company has grown substantially, and the volume of competitive airfare data our clients ask for continues to increase year after year, which is testament to the success of our business model.
I’m proud to say we are trusted by over 300 airlines, airports and agencies across the globe.
How would you describe Infare’s offerings?
At Infare, we understand the demands airlines are facing in today’s competitive marketplace. Using our range of airfare intelligence solutions, airlines have full access to superior airfare data and in-depth analysis. We assist them in monitoring their competitors’ steering and pricing, managing flight-level profitability reviews and identifying untapped revenue opportunities at both the route and overall market level.
With our historical and forward-looking data, airports can easily determine how carriers are performing in a given network, understand the overall network value, and the most profitable network opportunities for an airport.
Our offering also includes solutions for online travel agencies, travel management companies and tour operators who want to understand the cost breakdown of each component of vacation packages to negotiate the best price for their customer, as well as stay competitive within the market. We provide them with full pricing transparency of various packages’ components and the ability to benchmark retail airfares in relation to competitors.
How is the industry changing as dynamic pricing becomes a bigger factor in airline retailing?
When we first think of dynamic pricing, most people’s thoughts turn to the e-commerce world, and in particular, Amazon.
Amazon has blazed the trail, with algorithms that reportedly change prices millions of times per day depending on demand. According to their website, prices for items can change — even after the customer has clicked “add to cart”— and Amazon can lower prices as part of promotions. What’s also impressive is that they can reduce these prices even further to match any price another retailer is offering to undercut them on the same product.
The travel industry is a little late to the party if you compare airlines to the e-commerce players who have been leading the pack for what is probably two decades now.
Low fare airlines have, however, long understood how to behave like an e-commerce player with pricing intelligence. They embraced the model fairly early, with their unique distribution model and pricing strategies and have disrupted traditional carriers over time. One of the reasons why low fare carriers have been more successful is that they look at pricing intelligence in a very different way. They are using new approaches when it comes to processing big data and use these insights as a competitive advantage against other carriers in the marketplace.
You mentioned that the e-commerce platforms have had a huge head start compared to airlines. What impact do you think OTAs and metasearch sites have had on airlines and their ability to strengthen their pricing strategies?
Today’s hyper-connected and savvy travelers are more informed and expect the right price to be delivered at the right time and in the right channel. They are shopping around, looking hard for the best-priced airfare when planning a trip. And they have lots of choices; online travel agencies, airline direct websites and metasearch engines, to name a few. They are all competing for a share of the traveler’s spend.
For airlines, the challenge is to ensure that prices are consistent across all channels. If a carrier’s airfares are not uniform across all channels, there can be both immediate and long-term repercussions, including brand damage, potential revenue loss from missed up-sell or cross-selling opportunities and increased distribution costs. With the number of indirect channels continuing to expand, it is more important than ever to keep an eye on possible disparity.
All players are continually looking for ways to attract and retain loyal customers. In the end, it will be a question who owns the consumer and I think that verdict is still out. Airlines sometimes claim that the GDS model has not made it easy for them to own the consumer. In my opinion, there is some truth to it, but it is not a holistic picture.
Let’s look at how the landscape of distribution has changed in recent years. What are your thoughts on NDC, and how is Infare preparing for it?
As a data transmission standard, NDC aims to improve the capability of communications between airlines and travel agents. Airlines understandably want to sell their differentiated products as effectively through B2B channels as they do through B2C channels. IATA proposes an alternative to the current distribution model, taking into account the complex distribution channels now available.
For me, NDC is about moving the airline industry from a standardized environment to an individualized, personalized environment. It's interpreted differently by every airline. You don't have “one NDC.” For example, it means that one airline may deliver seat pitch details, and another carrier may not. As a result, consumers can make no comparison.
Speed and simplicity are highly desirable in retail and e-commerce. Most consumers nowadays like making purchases with one ‘click’ and therefore find seemingly endless and unimportant choices time-consuming and frustrating. We have all experienced the annoyance of being asked multiple questions about milk when we just want to buy a coffee in a hurry. Content differentiation is undoubtedly valuable, but when does more choice than before become too much choice? NDC must find the right balance for long-term success.
Infare is ready for the increased need for pricing intelligence solutions and competitive airfare data.