According to a new report from Amadeus, airlines are expecting modern airline retailing to increase profitability by up to 30%.
Amadeus’s Travel Technology Investment Trends report states that aviation is currently undergoing a once-in-a-generation evolution through adaptation to the world of modern retailing and a transition to offers and orders, supported by the implementation of NDC.
On average, full-service carriers expect modern retailing to increase revenue by 18%. 32% of these airlines are optimistic that this will lead to a 20-30% increase in revenue, while nearly half of low-cost carriers foresee revenue growth of 20-30%.
It was also found that offering wider choice, new products, personalisation, and greater pricing flexibility could earn airlines an additional US$45 billion (R851 billion) by 2030 – a significant figure for an industry where profit margins are often slim.
Iata aims to have 100% of airline transactions taking place in an offer-and-order environment by 2030. Airlines surveyed by Amadeus appear to share this goal, with 58% planning a gradual shift to offer-and-order management with current interline partners.
In addition, 46% of airlines are shifting to modern retailing across NDC-enabled indirect channels, and 44% are planning a shift to their own digital channels.
Airlines believe the complete transition to modern retailing will take an average of four years, although this number differs from airline to airline.
“Every airline is unique, and the pace of change will depend on the strategy of each individual carrier,” said Cyril Tetaz, EVP of Airline Solutions for Amadeus.
