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Competing with low cost carriers using legacy distribution

As a part of Technology and Innovation in Airline Distribution and Merchandising 2015 conference I presented this sucess case of integration of low cost strategies using legacy distribution systems.
As key factors of sucessful implementation agile methodologies, cloud computing and business process simplification

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Competing with low cost carriers using legacy distribution

  1. 1. TECHNOLOGY AND INNOVATION IN AIRLINE DISTRIBUTION AND MERCHANDISING 2015 Best of both worlds: Competing with low cost carriers using legacy distribution
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  3. 3. 3| • Madrid-based airline operating short and medium-haul flights • Commenced operations in March 2012 with over 6 million passengers and 50,000 flights in its first two years • Most punctual European airline and recognized as one of the best in the world • Wholly-owned subsidiary of Iberia • Operates 31 routes in Spain and Europe, flying 17 Airbus A320 aircraft • Indra is one of the leading IT companies in the world both in consulting and technology. • 43.000 employees and projects in 138 countries. • First-class customers worldwide from all sectors • Solutions and services for Transport and Traffic, Energy and Industry, Public Administration and Healthcare, Financial Services, Security and Defense and Telecom and Media sectors 01 ROADMAP TO DIGITAL EVOLUTION BEST OF BOTH WORLDS: COMPETING WITH LOW COST CARRIERS USING LEGACY DISTRIBUTION
  4. 4. 4| 01 ROADMAP TO DIGITAL EVOLUTION STARTING POINT First Iberia Express website is set out as a spin off of Iberia’s. For it’s go live day the portal is just a clone. MAJOR INCONVENIENCES: - Not oriented to its own customer - Heavy content website - Offer based on legacy carrier - Architecture based on central systems. GOAL: Create a website focused on the customer and ready to compete with other LCC and legacy carriers. 2012
  5. 5. 5| WEB STRATEGY CLOUD COMPUTING ENHANCING DISTRIBUTION SYSTEM FAST TIME TO MARKET CUSTOMER ORIENTED INTERFACE QUICK ADOPTION AFFILIATION PROGRAM 02 ROADMAP TO DIGITAL EVOLUTION DEFINING STRATEGY
  6. 6. 6| 03 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: CLOUD COMPUTING WEB STRATEGY PNRs generated in a week  TRAFFIC PATTERNS ARE UNPREDICTABLE: Marketing campaigns, special sales, daily behavior impact on infrastructure sizing. Unfeasible dimension infrastructure attending only to traffic peaks
  7. 7. 7| 03 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: CLOUD COMPUTING WEB STRATEGY = OPTIMIZED BUSINESS=AGILITY + BUSINESS & IT ALIGNMENT +SERVICE FLEXIBILITY INDUSTRY STANDARDS + CLOUD COMPUTING = Reduced Cost ….leverages virtualization, standardization and automation to free up operational budget for new investment =VIRTUALIZATION + ELASTICITY +STANDARDIZATION AUTOMATION +
  8. 8. 8|  INCREASE OPERATIONAL EFICIENCY: Dynamic scaling improves efficiency offering a solution to main two problems for infrastructure:  traffic pattern is unpredictable: there are peaks of request in holidays, due to special offers…  users demand for faster responses.  REDUCE INITIAL COST: Move from application/tenant to user/transaction/volume pricing in a opex model.  BUSINESS OUTCOME: To handle budget constraints  Paying only for the infrastructure you a really using  Reducing IT operations and maintenance staff  TIME TO MARKET: Reducing effort, time, staff to provision new infrastructure and services CLOUD COMPUTING: gives a technical solution to business problems on direct channel distribution 03 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: CLOUD COMPUTING WEB STRATEGY
  9. 9. 9| WEB STRATEGY 04 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: ENHANCED DISTRIBUTION SYSTEM ENHANCED BOOKING EXPERIENCE BOOKING FLOW MANAGER (BFM) ENHANCED SHOPPING NEW REVENUE & CUSTOMER ATTRACTION PAYMENT ALTERNATIVES ONLINE CHANNELS CONVERGENCE Indra’s BFM is an Integration Platform that allows integration with external providers allowing: • Centralize and simplify configuration setting from PSS & GDS, Ancillaries providers and payment gateways. • Easy and quick offer definition from marketing and commercial staff. • Allows personalize product and price definition.
  10. 10. 10| WEB STRATEGY 04 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: ENPOWER DISTRIBUTION SYSTEM Amadeus SITA Sabre Radixx Navitaire Travelport Psp INDRA BOOKING FLOW MANAGER CACHE FEEDER XML SOAP, EDI, CRYPTIC CUSTOMER KNOWLEDGE SOA, XML, REST & HTTP SOA, XML & DB ACCESS FILES ANCILLIARES HUB CUSTOMER & COMPANY PROFILE BUSINESSSERVICES (REST,SOA,XML) CALENDAR WS METASEARCH DB LOG FILE WS RESERVATION SOA, XML, REST & HTTP PAYMENT GATEWAY PSS & GDS INV: Inventory RES :Reservation TKT: Ticketing DCS: Departure Control PSP, MCO, EMD VOUCHER, COST CENTER Air Ancilliares Airline services External KPI & REPORTING Internet Local Loyalty Air Services Hotel Car Insurance CRM Loyalty Corporate External 1to1productandpricecatalog NDC PNR EMD EXTERNAL ORDER ID
  11. 11. 11| DISTRIBUTION & FARING WEB STRATEGY 04 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: EMPOWER DISTRIBUTION SYSTEM PASSENGERCMS CHANNELS EASY AND QUICK OFFER DEFINITION MARKETING  SIMPLIFY DISTRIBUTION COMPLEXITY: Providing business services to marketing, commercial and user interface designer  POWERFUL INTERFACE: Allowing access in multiple protocols from direct access (cryptic) to new standard (NDC, OTA, E-retail)
  12. 12. 12| 04 ROADMAP TO DIGITAL EVOLUTION IBERIA EXPRESS: SUCCESS HISTORY THE HANDICAPS THE GOAL THE RESULT - Heterogeneous reservation and distribution system (legacy)  USAS (Resiber): INV, DCS, TKT  Amadeus: Reservation - Fare settlement dependency with IAG members - No EMD support (dependencies with Amadeus implementation slots)  New generation business services handling all direct channel.  Fast implementation roadmap (4 moths)  New end-user functionalities not found on legacy distribution New booking experience:  Availability&price: Low price & upsell  Ancillaries shopping basket  New payment and promotion tools New affiliation program Responsive design (mobile, tablet, desktop) WEB STRATEGY
  13. 13. 13| WEB STRATEGY 05 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: FAST TIME TO MARKET  MANAGE CHANGES, CONTROLLING COSTS. change is risk and it is expensive because it implies rework. Using Scrum (an Agile methodology) allows us to:  SMALL DELIVERIES: this not only makes things simple, we have feedback of these deliveries and the project very often and early, so if adjustments have to be made they are done in «real- time».  PAY ATTENTION ON QUALITY: since early steps quality control is established in the deliver process, including automated tests, users validation, good design…  ENHANCE TEAM MOTIVATION: Scrum is focused on collaboration, implying continuous customer involvement, every member of the team is aligned with the project goals.
  14. 14. 14| WEB STRATEGY 05 ROADMAP TO DIGITAL EVOLUTION IBERIA EXPRESS: SUCCESS HISTORY Graphical design Front office Programming Indra BFM Product & Price Catalog THE GOAL THE ACTION THE RESULT Create a new website.  Implementation 4 month  New business model  New affiliation program  No impact on fare and IAG agreements  From design to implementation in 4 months  Full cloud implementation minimum IT operations.  Full affiliation program.  Full KPI support to monitor activity. From business to implementation using agile methodology.  Full Business process redesign attending customer needs.  Airline complexity solved using Indra BFM product  Strong collaboration with Design and Front office programming  Focus on delivery
  15. 15. 15| 06 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: CUSTOMER ORIENTED INTERFACE WEB STRATEGY “Reviews and design are very important at the moment to buy on the internet” Felipe 29, Spain “One of the most boring things when looking for tickets is having to add data all over again” Ramiro 24, Brazil “What is more annoying is the lack of transparency, the extra charges. It has to be clearer, show me the final price” Francine 29, USA “With age comfort inside the plane is more and more important” Lidia 48, Chile “Airline website should be easier to figure out” Ruth 52, Portugal “I lost a reservation because I couldn’t find the moment to go and pay” Carlos 42, Mexico PROFILE CONSIDERATIONS INDRA AIRLINE E-COMMERCE SURVEY 2013
  16. 16. 16| 06 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: CUSTOMER ORIENTED INTERFACE WEB STRATEGY NON-NATIVE DIGITAL MOBILE PROFESSIONAL YOUNG EXPLORER MATURE HEDONIST  Consumers are living multiple personalities and thus demonstrating diverse needs  There exists a greater lack of consistency in their work, home and play ‘profiles’  Consumer profiling has become an uphill task  Businesses find it more difficult to understand the varied needs and thus create a greater gap between themselves and their consumer INDRA AIRLINE E-COMMERCE SURVEY 2013
  17. 17. 17| • DEVELOP FEATURE. • TEST YOUR HYPOTESYS • INCLUDE BEST PRACTICES 06 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: CUSTOMER ORIENTED INTERFACE WEB STRATEGY BUILD LEARN MEASURE • HOW USERS REACT? • GET FEEDBACK • IS A PIVOT NEEDED, SHOULD I PRESERVE? • DID I OBTAINED THE EXPECTED RESULTS? LEAN + UX: Learn Fast Learn Cheap Indra BFM KPIs
  18. 18. 18| 07 ROADMAP TO DIGITAL EVOLUTION WEB STRATEGY: QUICK ADOPTION AFFILIATION PROGRAM WEB STRATEGY AIRLINES LOYALTY PROGRAM STRATEGIES HAVE EVOLVED OVER THE YEARS, FROM DISCOUNT COUPONS IN PRESS TO ADVANCED LOYALTY SCHEMAS Discount coupons in newspapers and magazines Loyalty card by points •Exchange points for flights with other carriers •Diversification and synergies with hotels, car rental ... Loyalty model by Apps Personal Loyalty Model Customer Identification Card Attract and retain customer base with a quick adoption product with minimum complexity Affiliation program: Quick access to discount with only email required. - No EMD - No Special Fares - Quick promotion definition
  19. 19. 19| 07 ROADMAP TO DIGITAL EVOLUTION IBERIA EXPRESS: SUCCESS HISTORY WEB STRATEGY THE GOAL THE ACTION THE RESULT Create Iberia Express own client base: attract and create a brand impact to retain them. Affiliation program to access discounts: both guest and registered users can book a flight, but registered (“Club Express” members) get an extra discount. 100.000 club members in the first four months.
  20. 20. 20| 4 Months Project duration 08 ROADMAP TO DIGITAL EVOLUTION IBERIA EXPRESS: SUCCESS HISTORY Availability on cloud premises x4 Bookings through Iberiaexpress.com +100k Club Express users on first 4 months 99,99% Functionalities focused on customer needsNEW
  21. 21. SPAIN Avda. de Bruselas 35 28108 Alcobendas, Madrid Spain T +34 91 480 50 00 F +34 91 480 50 80 www.indracompany.com Indra, We Speak Airlines!

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