This is the first blog article in our series about the airline offer and order life cycle. Modern airline retailing requires transforming to a world of offers and orders to deliver the right offer to the right customer at the right time.
Modern airline retailing is a customer-first approach to selling airline offers and products. It encompasses the entire offer life cycle—from pre-sale to settlement—through technology, dynamic pricing, and personalized services, and is full of newfangled acronyms to describe all the different components that go into an offer. Different organizations in the industry have introduced their own terms as they’ve added new standards, processes, data, and technology to the mix. OOSD, OOMS, ONE Order, and NDC are just a few of many examples.
These technical terms often emerge from a design mindset. They have an important place but can be confusing and end up hindering our industry from working harmoniously together to deliver the best possible offer to the customer. While many of us in the industry feel confident about how things work at our own organization, bridging the divide with others can feel like you need to learn a new language just to understand what their terms mean, which slows down progress and hurts our ability to collaborate and grow.
ATPCO introduced our offer/order life cycle years ago, using words that are as descriptive as possible, and these terms are still very relevant. We encourage everyone in the industry to come together on a common set of terms and a common set of definitions to help us all work better together, with hardly any acronyms!
ATPCO has defined four stages in the offer/order life cycle:
- Creating an offer for the consumer
- Distributing the offer to the point of shop and/or sale
- Presenting the product offering to the consumer
- Servicing consumer needs in the event of change and Settling financial accounts between all partners
Pre-sale and post-sale: A universal process
These different offer and order life cycle stages fit into two phases, pre-sale (create, distribute, and present the offer) and post-sale (service and settle the order). Essentially, we consider it as what needs to happen for a flight shopper to get the right offer, and we consider what happens after they have made a purchase. When presented in this way, it’s simplified and not so different from a purchase in any other industry.
Let’s look at what goes into each stage of the offer and order life cycle.
Create the offer
Definition: Airlines construct their prices, products, and pictures into fully formed offers that can be put in front of the consumer.
Whether it’s fares, rules, fees, and extras, or whether it’s prices, products, and pictures, the large majority of airline offers today are based on predetermined data; offers that are competitive, personalized for the consumer, and can be further controlled by each airline based on availability of product (in this case, seats). These offers are created by a mix of third-party systems, assembling products from their component parts, and airlines.
Airline offer creation is evolving to a world where airlines assemble more of their own offers, based on increased available information to feed their calculations to bundle products and prices dynamically, which can contextualize those offers to be the best for the consumer. The range of options, as products are bundled and priced based on science, become exponentially more personalized, and more appropriate to the individual flight shopper.
ATPCO’s role in offer creation
Helping airlines create and maintain their offers is what we do. We enable airlines to automate, simplify, and streamline the workflows required to get offers to market. Over 450 airlines store their prices, products, and pictures (visuals which include 360 degree tours)—the raw data parts—with ATPCO, so systems that create offers can send them as-is, or adjust based on context to make up nearly 90% of worldwide offers that are powered by the data.
Distribute the offer
Definition: The flow of information about an offer from an airline to a buyer.
Offers are created today by airlines and their systems—“direct”— and by third party systems that power non-airline channels— “indirect.” Each individual airline’s distribution strategy includes the mix of channels through which they will present their offers to customers. To enable this, massive amounts of data flow back and forth from airlines to sellers to buyers and back again. This data movement is airline distribution. This activity is powered by a mix of third-party systems like global distribution systems and by airlines, which are increasingly using their websites and APIs. More and more, airline interfaces are operating directly with the travel agency to better control their product distribution mix, and many are using multiple distribution methods, including EDIFACT and IATA’s New Distribution Capability (NDC).
Distribution is evolving to a world where airlines create more of their own offers and disseminate more fully formed product offerings for distribution to the consumer and to third parties to sell to the consumer. NDC is one such methodology, supported by a standard, that defines how this distribution flow works. Airlines’ control of their own offer is a crucial prerequisite for a better understanding of their consumer to be able to contextualize and distribute the best offers to the market.
ATPCO’s role in offer distribution
Airlines entrust ATPCO to distribute their data to all parties that use it. We make sure it is distributed to pricing and shopping engines, airline internal systems, travel retailers, advertisers, financial systems, and more so it’s reliable, consistent, and supported by processing standards. Above all, ATPCO ensures this critical infrastructure—the “pipes” the data flows through—works regardless of distribution method. Whether an airline wants to distribute data parts, or fully assembled products, ATPCO supports either and works equally hard to ensure that any other governing standards (like IATA’s NDC schema) will carry that data through all aspects of the product life cycle.
Present the offer
Definition: Using best-in-class merchandising techniques and content with visuals and attributes to create modern shopping displays.
Offers are presented to the consumer through a variety of channels, whether it’s the airline’s own store, an aggregator of content, or OTAs like Expedia. It’s a sophisticated process, traditionally based on the lowest price and most convenient time (what we would call “low fare and schedule”) but is increasingly including merchandising content about the flight experience. The flight shopping experience now includes videos, interactive airline maps, 3D cabin views, and more. Our research shows the way an offer is presented matters, because after all, flight shoppers are people, and people want to fully understand their choices before committing to a purchase.
Offer presentation is evolving to enable storefronts to be more attribute centric as airlines get more sophisticated in their retailing by bundling products, prices, and the pictures that support them. Attribute shopping by the consumer to allow filtering on the products they want to see is just the start. Fully contextualized offers based on who’s asking means the airline deeply understands their customers’ wishes and needs and prioritizes what they offer based on those characteristics.
ATPCO’s role in offer presentation
Just as ATPCO helps airlines create offers, our standardized instructions for putting the attributes together, combined with our Routehappy content including Visuals that can be targeted to flight, route, cabin, and brand and Attributes that enable clear comparisons of onboard and fare features, benefits, and restrictions, allow for the base content to go to third-party store fronts in the way each individual airline intends. It allows those storefronts to innovate the way they use that information to present offers to the consumer.
Service the order
Definition: The support of the order created once a passenger purchases an offer, for example in the event of a change of plans.
Servicing occurs whenever there is a change of plans, either from the consumer (like an unexpected family event) or from the airline (like a flight cancellation). In either case, it’s an uncertain time for the consumer, and the airline strives to treat them quickly and kindly to get them on their way to deliver a good experience from beginning to end. Many of these interactions are manually handled today.
Order servicing is evolving so it will be fully automated through better technology, better data, and the concept of order management. This means servicing is fast, accurate, low cost, and highly satisfying for the consumer. Contextual data, and access to the order at all potential points of servicing, is becoming more and more critical.
ATPCO’s role in order servicing
ATPCO allows airlines to capture the policies, both for legal disclosure prior to purchase, and to drive what should happen in the event of servicing. We’ve enacted improvements to this process with the stated goal of allowing seamless servicing so it’s fully automated and data driven, and we continue to drive that regardless of how a ticket is sold or an order is made to make sure the data supports the whole process.
Settle the order
Definition: Settlement is the process by which an airline needs to determine how much of the order revenue needs to be paid to other suppliers on the order.
Settlement generally occurs in a process called Revenue Accounting, which is how an airline accounts for its product sales, and what we call “usage.” Just because a product is sold, it might not be flown as planned—it could have been changed, refunded, or disrupted by operational issues like weather. Settlement means accounting for these changes, paying the bills, and billing what is owed to any other airlines and other partners involved in the fare product. In simple terms— whether that’s incentives to third party channels and systems, credit card fees, taxes to governments, or “interline”— the other airlines that go into the bundle to make up a full product. Settlement has traditionally involved a lot of recalculations of values and highly regulated processes between financial partners.
Settlement is evolving to become seamless, data driven, and “right the first time” in a world of offers and orders, which is better for everyone. High costs for manual recalculation simply don’t make sense in today’s world of data availability, high automation, and the transition to order management.
ATPCO’s role in order settlement
ATPCO provides critical services and tools for airline accounting and settlement, including order information (sales data), clearance, and settlement services between airlines, and is the single source of tax information for taxes paid to governments on sold products, including ancillaries. As we move to a world of offers and orders, the goal is data that’s right the first time rather than being re-calculated and audited after the event. After all, that’s what we provide—saving industry cost by providing the efficiency of doing things once, centrally.
The offer and order life cycle
As you can see, these universal life cycle stages of the offer and order can be more easily understood when we have a common language and set of definitions to describe them. While none of the definitions are complicated, there are, of course, many components that go into each stage, and this is where our industry should be focused.
Let’s work toward this next phase of people and processes, modern airline retailing through offers and orders, and become better together with a common understanding.
Want to learn more about offers and orders?
Throughout 2025, we will be publishing more in-depth blog articles about each stage in the offer and order life cycle. Alongside the articles will be webinars that you can attend to learn even more about how ATPCO can help you take your modern airline retailing strategies to the next level in each stage.
