6 Airline IT Amadeus Global Report 2017 A business, financial and sustainability overview 42 / 6. Airline IT Amadeus Global Report 2017 A journey of innovation Julia Sattel Senior Vice President, Airlines, Amadeus The airline industry builds economies, broadens cultures and creates connections between societies. It helps global and local businesses boom and expand. It connects people, drawing them closer together than ever before. Our vocation is to make that connection even stronger and simpler. Technology has always been critical to developing global travel. We have developed ours in partnership with airlines and are committed to supporting them in doing what they do best: fly and serve travelers around the world. 6 Every year we help close to 200 airlines fly more than 1.6 billion passengers around the globe. Before they even get to the airport, our Airline IT people and our technology play a part – behind the scenes – in getting them there. Airlines aim to provide the traveler with an experience they Amadeus Global Report 2017 6. Airline IT / 43 By simplifying processes and managing the complexity of working with third parties across the travel industry and beyond, Amadeus supports airlines as they drive transformation and innovation throughout their businesses to shape the future of travel. We are together in this journey. Our solutions and services enable airlines to provide the passenger with a consistent, personalized experience throughout their journey. From inspiration, search and booking to ticketing, check-in and boarding. We help airlines of all types – whether full-service carriers, so-called hybrid or low-cost airlines to grow sales, optimize costs and efficiency, deliver great service and build brand and customer loyalty whatever their business model. We also offer airlines unique possibilities to collaborate with their alliance and codeshare with strategic partners to maximize sales through all channels. will remember throughout every stage of the journey, from inspiration, search and booking to pricing, ticketing, check-in and boarding. The challenge airlines face today G4-2 is how to evolve to fully embrace digital transformation, open technology, the cloud Passengers boarded* (figures in millions) and application programming interfaces, among others, to support their vision of the future … and we are excited to partner with them on this journey. We are always looking for ways to keep airlines at the forefront of the latest trends. We empower full-service, hybrid and low-cost airlines to deliver on their objectives (to grow revenue, optimize costs and efficiency, and build brand and customer loyalty) according to whatever strategy they choose to follow. Airlines have unique opportunities to collaborate with their airline alliance codeshare or other strategic partners to maximize all sales channels, directly and through our networks. In fact, we serve the largest portfolio of the world’s top airline alliances: Amadeus airline 1,657 solutions are used by 69% of Star Alliance members, 71% of Oneworld carriers and over half of the members of SkyTeam. 1,383 Together with the industry we have enjoyed 30 years of innovation, collaboration and better journeys. We continue to invest heavily in our people at regional centers 695 747 of excellence across the globe. Innovation is in our DNA; we are one of the biggest 616 investors in R&D in the travel and tourism sector. We are a company of firsts. The first searches to combine price and flight availability. The first departure control system based on open technology. The first to come up with a Passenger Name Record. 2013 2014 2015 2016 2017 And we will keep on speaking to experts in our industry, partnering and developing technology so we are the first to do something else for our customers next month or next year. * Passengers boarded, i.e. actual passengers boarded onto flights operated by airlines using at least the Amadeus Altéa Reservation and Inventory modules or Navitaire New Skies. 44 / 6. Airline IT Amadeus Global Report 2017 The core Amadeus Airline IT offering is based on two Targeting our customers' needs e-Retail complementary Passenger Service Systems (PSS).1 Web Services and APIs The PSS Amadeus Altéa Suite consists of three modules: Sales Channel Optimization Shopping & Direct Connect 1_ Reservation: enables our airline customers to manage retailing bookings, fares and ticketing through a single Passenger Service Systems interface and is compatible with distribution via direct Anytime and indirect channels, both online and offline. and disruption Merchandizing management 2_ Inventory: its functionality helps to create and Merchandizing & Ancillary Services manage schedules, seat capacity and associated personalization Fare Families fares on a flight-by-flight basis. This allows the Altéa Airline IT Customer Experience Management airline to monitor and control availability and New Skies reassign passengers in real time. Altéa Inventory Schedule Recovery portfolio also incorporates a seat-mapping functionality. Passenger Recovery 3_ Departure Control: covers many aspects of flight Revenue Management departure, including check-in, issuance of boarding Revenue Dynamic Pricing G4-4 passes, gate control, disruption management and optimization Cloud Availability other functions related to passenger flight boarding. Services Financial Suite In addition, Altéa Departure Control offers aircraft load control functionality, which enables airlines to evaluate and optimize fuel utilization. On the other hand, Our New Skies PSS offers solutions tailored to the needs of low-cost carriers, covering reservations, distribution, travel commerce, loyalty We work closely with our customers to understand key In addition, we regularly commission specific research revenue management, revenue accounting and industry trends and traveler demands and to get deep on important industry topics. The white paper data storage. insights into airline needs. For example, over the years Embracing Airline Digital Transformation: A Spotlight on Our pricing model for Airline IT solutions is primarily Amadeus has actively contributed to evolving IATA NDC. what Travellers Value, focused on how airlines need to based on a fee per each transaction processed, for better understand passenger needs and how to service We believe IATA NDC has now reached a level of maturity example per passenger boarded. By operating a them more appropriately. These combined insights that allows for its industrialization. Amadeus has the transaction-based model, our returns are linked to the are incorporated to our investment strategy and expertise and capabilities to do this, and it is our aim to operational volumes of airlines. portfolio, which are designed to address the following deploy NDC at industrial scale assuming the industry opportunities in the airline industry: follows the IATA NDC and its standard implementation to ensure efficiencies for all parties. In the short term, Amadeus will become Level 3 certified as aggregator in 1 Passenger Service System (PSS) is a series of mission-critical 2018. However, Amadeus’ ambition is to continue beyond solutions used by airlines. The PSS usually comprises a Reservation System, an Inventory System and a Departure Control System (DCS). NDC to deliver unique and advanced capabilities that will See “Environmental sustainability,” p. 98. benefit travel providers and sellers alike. See “Amadeus research and thought leadership papers,” p. 69. Amadeus Global Report 2017 6. Airline IT / 45 1. Articulating the right offer to the traveler Garuda According to our research, only 14% of travelers find it easy to compare airline offers based on attributes other than price, while 37% of travelers say that Garuda Indonesia proves that ancillary services and has one of the highest ancillary adoption rates in competitive price is the most important factor when customer satisfaction go hand in hand. Asia-Pacific. It has seen an increase in ancillary choosing an airline. Closely behind comes convenience revenue of +34% in four years. At the same time, Challenge of flight time and departure airport, which 31% say is its customer satisfaction rating is also on a steady the most important. In recent years, steep competition has led to rise at +0.8 points year-over-year in 2016. And the Our whitepaper A spotlight on Total Offer Optimization: a declining average ticket price. In Asia-Pacific proof is in the pudding: in 2017 Garuda Indonesia Fast-Forward to Customer-Centric Revenue Management the challenge lies in both the domestic and was named “The World’s Best Cabin Crew” for the highlights the evolution of revenue management in the international markets, and in full-service and third consecutive year, as well as “The World’s Most age of personalization, where the right price is offered to low-cost carrier segments. Ancillaries presented Loved Airline.” the right customer at the right time. an opportunity to grow the airline’s revenue, in line with its brand image. Sales of airline ancillary Ultimately, what travelers value will change depending services globally have skyrocketed over the past on the context of their trip. This provides an opportunity few years. As Indonesia’s flag carrier, Garuda is for airlines to present their offers seamlessly across all committed to putting passengers first, which is its channels, all touchpoints and all devices so that other core value and competitive differentiation. Garuda aspects of the product, apart from price, can help drive asked Amadeus