Month: August 2025

Modern Airline Retailing: Lessons from Branded Fares, and How Other Industries Help Envision What’s Next

Modern Airline Retailing: Lessons from Branded Fares, and How Other Industries Help Envision What’s Next

One of the key benefits of Modern Airline Retailing (MAR) is the ability to sell any product, in any place, at any time—from eSIMs and in-flight digital products to luggage pickup, insurance, hotels and attractions. It sets the path toward extending retail opportunities well beyond the flight itself and invites airlines to change their perspective.

Offer and Order Management Systems are the underlying technology that enable this change. While the technology may be new, the strategic principles driving this transformation are not.

This article looks at MAR through two lenses.

First, by drawing parallels between the branded fares era and today’s developments, we can see that similar strategic shifts are at play, only this time on a far greater scale.

Second, by examining how other industries faced similar transformation pressures, we can anticipate the operational and cultural changes airlines will need to succeed.

Across both lenses, three common shifts emerge:

  1. From product unbundling to customer unbundling – moving from selling more discrete items to segmenting more precise customer cohorts
  2. From branded fare options to new fare offers – evolving how new products are introduced, tested and scaled with customers
  3. From fare structures to an Order-based architecture – redesigning the internal systems and workflows that support a modern commercial strategy

Branded fares were the first hints of what was to come. They showed airlines could reframe their offer structure, experiment with fare benefits and re-engineer front-end selling. But successful MAR will demand even finer customer insight, a deeper commitment to iterative product introduction and a complete rework of the system of record, taking lessons from industries like banking, telecom and ecommerce.

In the sections that follow, we explore each shift in turn: comparing MAR’s challenges to its branded fares predecessors, then looking outward to other sectors to envision what modern airline retailing could truly look like.

From product unbundling to customer unbundling

Branded fares brought unbundling, or product atomisation, as a response to changing customer demands. It enabled airlines to further differentiate their flight offers from competitors by treating tangible and intangible properties as price-driving components.

Modern Airline Retailing can be considered an extension of the same principle — enabling more price points to meet customer demand. The key difference is scale. MAR introduces an overwhelming number of possible combinations, far beyond what branded fares ever faced. It is this complexity that turns segmentation from a nice-to-have into a commercial necessity. To capture the additional value, airlines must break down customer segments even more precisely and tailor their offers accordingly.

To draw an example from another industry Sarah Tavel, Pinterest’s first Product Manager, refers to these fine-tuned customer segments as “cohorts”.

She argues that building a high retention product in a global marketplace requires focusing on specific geographies, user types and behaviours. In Pinterest’s case, a cohort might be users who signed up in a given week, or weekly returners who are active but not making pins, or customers who create multiple boards each month. While users may belong to more than one cohort, each group is slightly unique. Analysing these cohorts’ impact on commercial goals, along with the behaviours that set them apart, provides the insights that ultimately drive retention.

In the airline’s case, finer segments could look like customers who always select insurance when there’s more than one person in their booking, or customers who have changed their booking multiple times, or even something as specific as solo customers on three-day short-haul trips to destinations where a different language is spoken. By investing in technology that allows for further segmentation (i.e. based on behaviours), airlines can create as many cohorts as there are product combinations in Modern Airline Retailing. This is why segmentation must be an integral part to an airline’s journey to MAR.

From branded fare options to new fare offers

With a revamped branded fares product, naturally, airlines had to update the way they sold products on their customer-facing channels. Introducing these new products meant more price points, more information to display and more decisions for the customer to make.

Some airlines split branded fare introduction into domestic and international, while others went further by region. However, all went through a learning phase, using feedback to refine commercial strategies and respond to shifting customer behaviours. Customers also had to adjust. Suddenly, they had to start paying more attention to fare conditions, scrutinise fare benefits and decide if a seat, bag, cabin or flexibility mattered enough for them to pay extra for. This was by no means an instant change; it took time for them (us, as travellers) to adapt.

Modern Airline Retailing brings this to a new level. Neither airlines nor customers have ever had this amount of products available during the travel experience. Introducing new product lines will be a test-and-learn phase for both. Customers don’t yet know what they want, and no clear best practices exist. This is a golden window for airlines to capitalise on learnings from broadening their product portfolio.

Monzo, a popular UK online bank, is a good example of a company that has built and kept a large audience through excellent customer experience. It uses this scale to test new products within a solid experimentation framework, much like airlines can with Modern Airline Retailing. In the last two years Monzo has launched three new and complex product lines with a test-and-learn approach: investments, pensions and mortgages.

In 2023, Monzo introduced its Investments product, offering a limited set of funds to an early access cohort. In their first experiment they learned that users wanted plain-English explanations, transparent fees and a frictionless first investment. Instead of rushing to expand their fund catalogue, they honed copy, onboarding and education to ensure users could find and complete the investment journey without confusion. Monzo prioritised customer understanding before making costly platform upgrades, and by mid-2025 they had 300,000 investment accounts, with one third from first-time investors.

For airlines embarking on Modern Airline Retailing, not every product initiative will suit every customer. Many will address the needs of smaller, specific cohorts, such as tickets to special events, a selection of inflight Wi-Fi speeds or ground transport connections including shuttles, buses or trains. The revenue impact will not be immediate, and customers will need time to get used to the option of buying these products within their airline travel experience.

Each product launch should be seen as a series of purposeful steps rather than an one-off event. Step by step, these products will build familiarity, deepen customer understanding, reduce friction and create new sources of value for the customer. In this model, revenue follows learning, and success comes from tracking adoption as closely as revenue to unlock long-term growth.

From fare structures to an Order-based architecture

Branded fares brought a significant front-end overhaul, but not equitably in the back-end. Airlines continue to rely on the price-setting constraints of RBDs and the servicing limitations of the PNR, eTKT and EMD structure.

To unlock the potential of Modern Airline Retailing, it is essential for airlines to change the way they internally configure, record and account their products. The centre of this next stage of transformation is the Order object. An Order-based architecture has the flexibility, bundling potential and customer-centric structure that a MAR commercial strategy requires.

Telecom is an industry that faced a similar digital transformation challenge. One specific case is that of Orange in Europe whose enterprise customer needs started to required more complex products (e.g., security policies, cloud ramp-up, access points). Although it had a very long time to market, Orange could create and sell these products, but the downstream systems couldn’t keep up. Every product change produced a multiplicative effect on fulfilment, operations, servicing and many others.

To solve this, Orange set out to change their system of record to have a single Order object with multiple Offer items within (service offers, work offers, logistics offers, etc.). With this new structure, each department could process, change and fulfil offer items independently but still have everything tied to a single source of truth. Contracting, operations, billing, servicing, accounting — the whole ecosystem – could now rely on the same information, standardised states and error codes for their operations.

Orange achieved this by setting up a new and parallel technology stack to prove the end-to-end execution of new Order object and the governance across the platform. They configured and fulfilled a narrow number of use cases in the new system, while having the legacy system handled the rest. However, in the background they ran synchronisation processes between both tech stacks to maintain data parity during the transition period.

Like telecom, airlines face the need to change their system of record to enable their commercial strategies. The PNR object touches nearly every aspect of airline operations, making any change high-stakes. Lessons from telecom show that airlines could strive to achieve two objectives early on: prove end-to-end execution of the new systems and validate that its governance framework can scale. This governance sets the standards for data objects, integration patterns and operational principles that all future connections will follow. Internal systems will rely on it, and so will a wide range of external providers such as retailing partners and service providers. Achieving this milestone shortens the transition and reduces the risk and cost of running two platforms in parallel.

Jorge Velasco Azoños, Travel in Motion AG

References

Pinterest

Monzo

Orange (Europe)

 

 

 

 

 

 

 

August 19, 2025 Boris PadovanAggregation, Airline Retailing, Airlines, Homepage, NDC, NDC Aggregation, ONE Order, OOMS, Uncategorized