As the airline industry narrows its focus on improving and modernizing retailing, providing optimized offers (aka getting the right offer to the right customer at the right time) is one of the most important priorities. Unlocking true airline retailing starts with creating the offer for a flight shopper.
What does it mean to “create the offer”?
An offer is more than a ticket. An airline offer has five components: flight schedule, seat availability, product, price, and a merchandising element such as a product bundle, an à la carte item like lounge access, or an ancillary service like checked bags. ATPCO’s role in the airline industry is to automate the product, price, and merchandising elements of offer creation so that airlines can better serve the billions of passengers each year.
How those elements come together is evolving. Airlines are modernizing how they create offers, but the transformation required to enable 80% of dynamically created offers by 2026 will require some hefty technological changes. More on that to come!
How is an airline offer created?
In the industry’s current state, most offers are “fixed,” meaning airlines file fares and rules that are constructed by pricing systems and sold in various channels such as travel agencies. The “product” element we mentioned above includes the fares, or the cost for a passenger to fly from origin to destination, and the rules, which are the conditions a passenger must meet to be eligible to purchase that fare.
New data, real-time information, and scientific models mean that offer creation is evolving to increasingly dynamic and customized methods that are constructed by airlines. This is a win-win for travelers and airlines because it means that airlines can construct more targeted offers based on a passenger’s needs, and passengers can get more of what they want for a potentially better valued price because of the bundling options.
In this win-win scenario, airlines can create offers dynamically for a consumer at the moment they make a shopping request rather than having to file fares and rules ahead of time, which currently leaves airlines stuck with less efficient products. All in all, dynamic offers are a combination of dynamic pricing and dynamic bundling.
While this sounds incredible, it’s important to note that this evolution will form a spectrum. As the industry evolves, there will be a mix of both types of offer creation because each suits different purposes. As time passes, however, more offers will be dynamically created. We’d be remiss not to mention that this is precisely ATPCO’s value to the industry: bridging the current with the future capabilities of dynamic offer creation.
Why the shift to a world of dynamic offer creation?
We’re living in a world where the “average” experience is not satisfactory and the traditional approach to selling flights is not the way of the future, as indicated by industry research:
- Datalex’s research report, The Digital Airline 2023, shows that airline merchandising is lagging behind traveler expectations
- IATA’s 2022 Board of Governors Report showed that travelers are able to see the value of what’s being offered by airlines beyond the base fare
- McKinsey’s 2022 article, Six secrets of profitable airlines, reinforced that flight shoppers no longer shop for flights solely based on price and schedule
- ATPCO’s 2022 annual flight shopping survey showed that 80% of shoppers are more likely to book a flight if they see targeted visuals
Today’s travelers expect more than just price and schedule when they are shopping for flights. They demand personalized, rich content that provides transparent information about what they can expect on a particular flight and that allows them to execute their entire flight shopping journey flawlessly. Dynamic offer creation allows airlines to provide more targeted options, which means they can optimize their offers while creating the flight shopping experience their customers are craving.
How does ATPCO help create the offer?
ATPCO is the starting point for offer creation because of our accurate, single-source airline fare data. In fact, 87% of worldwide offers are powered by our data. Positioned at the center of airline offer distribution, we have the broadest and deepest set of pricing and merchandising data on the planet, including more than 300 million fares in our growing database.
Helping airlines create and maintain their offers is what we do. Our solutions enable airlines to fully automate, simplify, and streamline the workflows required to get offers to market:
- Architect is our premier pricing management solution that allows you to spend more time optimizing your pricing strategy and less time manipulating data.
- Express Contracts automates negotiated fares, letting airlines turn signed contracts into bookable fares in just a few hours.
ATPCO has been the trusted foundation for traditional offers, and we’re committed to establishing the standards and defining the data to effectively drive dynamic offer creation. No matter how an offer was created, it still needs to move through all the other processes so the passenger can fly and the airline can settle its finances. That's why we're also working on revolutionary solutions that will truly transform the industry’s ability to create an offer from thousands of available attributes, as well as to process dynamic offers in existing systems and settle all offers efficiently.
Building modern airline retailing means ATPCO supports both traditional and cutting-edge methods. We’re committed to enabling dynamic offer creation at scale because it will change the flight shopping experience for the better. Providing the seller and travelers with more value than ever before, the industry outcome for 2026 will unlock true airline retailing and transform the industry. Forever.
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