March 4, 2024
The Rise of Multisource: Struggles and Opportunities of a New Reality
The Rise of Multisource Chapter 1

Mystifly Founder and CEO Rajeev Kumar recently wrote a landmark article that highlighted the challenges faced by the airline industry as it transitions towards modernized retailing through New Distribution Capability (NDC) and Offer-Order-Settle-Deliver (OOSD). As a seasoned veteran, Rajeev reflected on the evolution over the past 15 years, emphasizing the shift from traditional air selling to a more customer-centric approach that includes ancillaries, bundles, and dynamic pricing. However, he also acknowledged the hurdles, particularly in servicing and managing diverse air content. While the journey towards modernized and seamless air retailing is complex, Rajeev assures it is manageable – with the right technology in place.

In this series, The Rise of Multisource, we pick up Rajeev’s story and explore the new landscape, why it is here to stay, and why it is important – for travel sellers , airlines, and the larger travel ecosystem. We look at the key players and lift the lid on the trends and forces at play.

By 2027, T2RL predicts that the aggregator market will sell a significantly larger number of passengers than it did in 2022, in the region of a 17-fold increase. And the reason? Aggregators make it easier and more profitable for travel sellers to retail flights and extras in today’s landscape.

Travel sellers including brick ‘n’ mortar agents, online travel agencies (OTAs), tour operators, and travel management companies (TMCs) – and more – account for 40%-50% of air ticket sales. But how do these important players get this air content? The answer to this question is intriguing – air content is multisource.


The Origin Story

Most flights are sold via the Global Distribution System (GDS) – a supergiant that for four decades, has successfully helped airlines get products to travel sellers in a one-size-fits-all approach. Respected for its reach, the GDS has an extensive technology footprint across travel seller organizations. Think green screens on agent desktops!

Distributing through the GDS – in the traditional (EDIFACT) way – can consume a large chunk of an airline’s budget. Plus, it is not very flexible. For example, it is difficult for traditional EDIFACT to support non-core products and services such as premium seat selection and in-flight meals. As a result, this star of airline distribution is not as super as it once was.

Airline websites/mobile apps, Low-Cost Carriers (LCC), and NDC have given airlines more options and challenged the one-stop-shop role the GDS once held.

The agile LCCs account for 31% of flights worldwide . As their raison d’être is to keep costs down and run on razor-thin margins, these comets initially skipped the GDS channel in favor of direct sales, such as websites and mobile apps. However, over time, some savvy LCCs have started to use the GDS platforms to tap into new customer segments.

In his article, Rajeev also calls out the transformation movement that began with IATA New Distribution Capability (NDC). Inspired by the success of LCC direct distribution, NDC gave airlines more freedom in terms of how they define and distribute their product offerings. In this nebula of innovation, airlines could now connect directly with travel sellers and use data to create rich, personalized offers dynamically, in real-time — benefitting both travelers and the airline bottom line.

It’s useful to note that although airline retailing was stimulated by NDC, the industry transformation now extends end-to-end across the Offer-Order-Settle-Deliver (OOSD) lifecycle. OOSD is an important trend for travel sellers and we will explore its significance in subsequent articles.

NDC is based on industry standards but in reality, NDC air content is far from standardized. Many versions, inconsistent implementation, and airline-specific workflows have created a diverse and complex domain. It is, however, widely accepted the NDC distribution is here to stay. We will take a look at the why later in this series.


The Sellerverse

Navigating the fragmentation of this new terrain can be tough for travel sellers at the frontiers of retailing. Much of the industry commentary orbits around the perspectives of the airline or a select group of retailing stakeholders, often retail agents, online travel agents (OTAs), and travel management companies (TMCs) – all of which are incredibly important to airlines and end customers. However, the size and scale of the travel seller ecosystem – or sellerverse – is surprising, under-explored and under-represented.

This series will delve into the challenges and solutions relevant to this diverse group that embraces not only ‘Mom and Pop’ shops, online stores, and corporate travel platforms but extends to loyalty programs, eCommerce businesses, banks – and more – who are adding air sales to their product portfolios.


The new aggregators

New frontiers open a wealth of possibilities for those who embrace change. The Rise of Multisource will probe into the size of the opportunity on the table and the solutions available to those who dare to do things differently.

To stay tuned, register for updates here or follow us on LinkedIn.


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