IATA is forecasting a fundamental overhaul of airline distribution within five years, shifting to what it calls an “active distribution” model.
In a major report for the global aviation industry organisation, written by Henry Harteveldt of Atmosphere Research, airline distribution is cited as the “commercial future of the airline industry itself” as carriers are urged to anticipate significant changes to passenger behaviour and technology.
The report says:
“Airlines want to be dramatically more effective in how they sell, so that travelers find the value they seek and airlines can be more successful businesses.
“We believe that, by 2021, airline distribution will evolve from its current passive, rigid, and technology-centric state to a more flexible, dynamic, and passenger-centric environment which we call active distribution.”
Drilling down into specific elements of this predicted switch from the status quo, the report says the next five years will see a range of long-standing processes taken in entirely new directions but all eventually leading towards a wholly different way for the airline-passenger relationship to work (and, in turn, how intermediaries will fit in).
IATA, of course, has skin in the game when it comes to airline distribution, given how aggressively it is pushing the NDC standard for airlines.
Yet very few in the industry are likely to disagree with many of the findings in the report – perhaps just the degree to which they are forecast to change.
Harteveldt has identified in the study a number of likely areas of significant movement affecting airline distribution over the course of the next five years.
1) Traveller types
An ageing consumer base and geographic spread of travellers into other emerging economies (second tier, beyond the BRICs) will ensure that airline distribution systems and third party channels will need to accommodate and cater for different types of “shopping experiences”.
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