During this Covid19 crisis, the recovery of the Travel & Tourism industry is being closely scrutinized. There is a huge amount of money at stake, it is not only about airlines, hotels and car rental companies, it is also about general business ranging from shopping tourism to financial services. Overall tourism drives 10+% of world GDP. All major consulting firms are leveraging the situation for marketing purposes: McKinsey / IATA (Travel Pulse); Oliver Wyman / IATA (Demand Forecasting); BCG / ARC (Travel Recovery Insights Portal). However, the fact that no airline is involved at all into these analytical exercises, raise the question: Do airlines still control their data? At almost every step of the airline sales process, a player providing a billed service to the airline, uses the situation to grab airline data and monetize it:
- Schedules: OAG / Innovata - Fares: ATPCO / Infare - Plane location: FlightRadar24 / Aireon - Bookings: MIDT (all GDS) / IATA DDS
Almost all airline data is available on the market from a third-party provider, without the airline having any control nor benefit out of the sale. And to make things worse, airlines are the main purchasers of the data!
Let's take a major European airline group as an example, their allocated share MIDT & DDS revenue is in excess of $10M... but then they are customer of MIDT and DDS, and that costs them in excess of $5M. So, between the savings and the gain, Lufthansa group could potentially add $15M to its bottom line!
Given that revenue will be scarce in the coming years, it is time for airline to regain control of their data and benefit from it! It however won’t come without challenges:
- Airlines have GDS and BSP contracts in place where they relinquish their rights to their data, and those contracts have in some cases lengthy commitments. - Airlines should syndicate themselves in order to offer to data consumers a one-stop shop where the data consumer can purchase the datasets that fit their need (e.g. a given route, a given O&D, etc.) and not just airline by airline. - Airlines must start establishing data exchange agreement among themselves, at joint venture or alliance level, and stop the madness of being at the same time customer of a data solution and the goods being sold...
It is only by being the sole provider/marketer of their own data that the airlines will extract the entire value they deserve! They are after all the first step in the Travel & Tourism industry, and more than often the one acquiring the customer for the rest of the industry.
Comments