Author: Boris Padovan

Modern Airline Retailing (MAR) is most often discussed from a commercial perspective: dynamic offers, orders, segmentation, personalisation and improved servicing experiences. These capabilities bring a host of challenges for airlines seeking solutions to meet these demands. What capabilities do I need, and when? How much flexibility do I need to choose modular solutions? How do I manage the coexistence of legacy and modern technology? How do I collect and monetise data? These are some of the questions we help airlines address as part of their transition to MAR. However, behind these capabilities sits a significant set of infrastructure requirements that airlines must address if they are to scale modern retailing successfully and sustainably.

While industry discussions frequently focus on modularity, application programming interfaces (APIs) and customer-facing retailing experiences, the reality is that MAR introduces major changes to transaction flows and integration complexity, potentially creating operational dependencies across the airline technology landscape. In many ways, this infrastructure challenge is just as significant as the retailing transformation itself.

Traditional airline systems were largely designed around relatively predictable transaction flows and clearly separated functional domains. Modern retailing changes this significantly. Retailing ecosystems increasingly require real-time contextual pricing, dynamic offer construction, continuous re-shopping, orchestration across multiple fulfilment and servicing systems and integration with external retailing and AI-driven channels. All of this must be achieved while continuing to manage the remaining legacy technology stack that has not yet transitioned. This creates a far more event-driven and interconnected operational environment than many airlines have historically operated.

Infrastructure therefore needs to support not only higher transaction throughput, but also greater flexibility, resilience and operational visibility due to the increased interdependence of systems.

API infrastructure becomes particularly critical in this environment. Modern retailing architectures rely heavily on APIs across Offer Management, Order Management, inventory, loyalty, payment orchestration, customer relationship management (CRM), fulfilment systems and third-party retailing and delivery partners. However, exposing APIs alone is not sufficient. Airlines require mature API infrastructure capable of handling authentication, traffic management, throttling, observability, resilience and lifecycle governance.

This becomes even more important as the industry moves towards increasingly autonomous or AI-assisted shopping and servicing models, where API traffic may increase dramatically compared with traditional human-driven shopping behaviour. Continuous shopping, automated re-shopping and machine-driven servicing interactions all create infrastructure demands that many legacy airline environments were never originally designed to handle.

At the same time, a core principle of MAR is modularity. Airlines increasingly aim to move away from large monolithic platforms towards more flexible ecosystems composed of specialised components from different vendors. This creates significant opportunities for phased transformation, reduced vendor lock-in and faster innovation cycles. However, modularity also introduces substantial operational and infrastructure complexity.

In practice, airlines are no longer managing a single tightly integrated system landscape, but rather a distributed ecosystem of modules, each with its own APIs, release cycles, scaling behaviour, operational dependencies and monitoring capabilities. The challenge is therefore not simply whether systems can technically connect through APIs, but rather ensuring that the overall retailing ecosystem behaves reliably and coherently under real-world operational conditions.

In discussions around modularity, questions quickly emerge regarding operational ownership and resilience. How are failures isolated? How are retries managed? How is transaction consistency maintained? How are changes coordinated across vendors? Who owns end-to-end operational accountability across a distributed retailing flow?

As modular retailing architectures mature, infrastructure capabilities such as distributed tracing, centralised observability, API traffic analytics, resilience orchestration and automated integration testing become increasingly important. Without these capabilities, modularity can quickly introduce operational fragility rather than flexibility.

Scalability is another major consideration. Modern retailing introduces far more variable workload patterns than many airline systems were originally designed to support. Micro-segmentation, dynamic pricing, shopping spikes during disruptions, continuous repricing and AI-driven search behaviour can all create highly elastic demand profiles. Infrastructure therefore needs to scale gracefully and respond predictably under load.

At the same time, retailing increasingly depends on contextual and behavioural data, including customer preferences, shopping interactions, loyalty information, ancillary purchase history and operational state. This creates additional demands around real-time data availability, synchronisation, governance, privacy and identity management.

One of the most underestimated challenges, however, is coexistence. Very few airlines will be able to replace their commercial and operational environments overnight. In practice, modern retailing capabilities must coexist with Passenger Servicing Systems (PSS), departure control system (DCS) environments, legacy accounting processes, operational messaging systems and existing fulfilment logic for many years. This is a simple fact that cannot be changed and most often results in hybrid environments where Orders, passenger name records (PNRs) and legacy operational records need to remain synchronised during extended transition periods. Infrastructure therefore needs to support reliable event propagation, synchronisation and operational consistency across both modern and legacy domains simultaneously.

Ultimately, MAR is not simply a transformation of how customers shop for and consume travel products. It is a significant evolution of the operational and integration infrastructure that supports airline commerce and delivery. The most successful MAR programmes are likely to be those that treat infrastructure as a strategic enabler of their retailing strategy rather than an afterthought.

Modern retailing is not only about creating better Offers and Orders. It is about building a technology foundation capable of supporting a far more dynamic, interconnected and continuously evolving airline ecosystem. We would be happy to talk to you about how we can help you on this journey.

Nick Stott, Travel in Motion AG

 

 

 

 

 

 

 

 

 

For much of the past decade, airline retailing has been framed as a technology transition. Industry attention has been dominated by standards, platforms, architecture, and the gradual reduction of legacy PSS dependence. These developments have been necessary and valuable but are solely foundations and alone do not create competitive advantage.

As more airlines gain the ability to distribute richer and more flexible propositions, a strategic question emerges: once an airline can generate a modern offer, can it generate the right one? Can it determine, in real time, what proposition should be shown to a specific customer, through a specific channel, under specific market conditions, with a clear commercial purpose?

This is where the next phase of airline retailing begins. Long-term leaders are unlikely to be defined by who modernised distribution first. They are more likely to be defined by who develops superior decisioning capability: combining data, commercial logic, customer understanding and operational feasibility into consistently stronger propositions.

Within the Digital Retail Environment from Travel in Motion, this is the role of Offer Management.

From distribution modernisation to commercial intelligence

At first, retail transformation focused on control: greater ownership of customer proposition, richer product display, faster time to market, stronger ownership of the customer proposition and reduced dependence on intermediated models. These remain valid objectives. Yet a stronger pipe does not automatically create a stronger proposition.

A new API can distribute an uncompetitive offer more efficiently. It can deliver inconsistent pricing, an optimised weak product set or present the wrong proposition beautifully.

Retail value is not created by connectivity alone. It is created when an airline can decide intelligently what should be sold, to whom, at what value, in what form and with what intended outcome.

Other sectors have already travelled this path. Retailers, hospitality groups and subscription businesses increasingly compete through how intelligently they design, test and refine propositions in response to customer behaviour and market conditions. Airlines are now entering that same commercial era.

Offer Management is not a tool

A common misconception is to view Offer Management as a single engine or software module. In reality, it is a coordinated capability system at the centre of modern retailing.

It performs two distinct functions. Offer Creation, the industrial process of constructing a valid proposition in real time. It depends on products, availability, rules, fulfilment feasibility, itinerary construction and initial pricing. And Offer Optimisation, the commercial process of deciding which proposition is best. Should the priority be conversion, yield, ancillary attachment, premium upsell, loyalty recognition or customer lifetime value? Should a customer see a low-entry proposition, a convenience bundle or a premium alternative?

Many organisations invest in creation while underinvesting in optimisation. Yet both are essential. Creation without insight becomes a technical response. Optimisation without strong foundations becomes guesswork.

The strategic promise and risk of real-time offer computation

Real-time offer computation is one of the most significant shifts in airline commerce for decades. Historically, retailing relied on filed fares, booking classes and static bundles. The modern model allows propositions to be assembled and refined at the moment of request.

This creates meaningful opportunity. Airlines can respond more precisely to demand signals, customer context, market conditions and network priorities. They can move from broad segmentation to more granular relevance.

But it also introduces risk. Poor data creates poor offers faster. Weak algorithms can dilute yield. Slow performance can impair conversion. Fragmented governance can create conflict between pricing, digital, product and revenue management teams.

The lesson from other sectors is clear: automation without control rarely creates durable advantage. The strongest Offer Management environments combine innovation with discipline. Decisioning is treated as a managed commercial capability, not an uncontrolled technology experiment.

Data, AI and experimentation matter

Offer optimisation is fundamentally a learning system. Its quality depends on how effectively the organisation can sense demand, test propositions, interpret outcomes and improve future decisions.

Many airlines rely mainly on booking records, transactions and historical demand curves. Important, but they are no longer sufficient. Modern decisioning benefits from broader signals: search behaviour, abandoned sessions, ancillary conversion, channel patterns, competitor positioning and indicators of long-term customer value.

This is where AI’s role becomes relevant. Not a substitute for commercial strategy, but as an accelerator of pattern recognition and decision support. It can estimate willingness to pay, identify micro-segments, predict ancillary propensity and recommend next-best propositions, detect anomalies and improve response speed.

The best retailers outside aviation rely on experimentation to learn and improve. They continuously test bundles, price ladders, messaging and recommendation logic. For airlines, this mindset shift is as important as software deployment.

Why pricing is the natural starting point

The answer is practical. Pricing is one of the few domains where airlines have relatively mature structures, dedicated teams, deep historical data and clearer governance.

Just as importantly, airline ecosystems are not yet ready to capture full value from end-to-end order-native retailing. Servicing, airports, partners, financial process remains dependent on legacy artefacts. Product catalogues are fragmented. Customer data is dispersed. And organisational accountability for total proposition ownership is still emerging.

In that context, pricing becomes the logical first battlefield. Dynamic pricing and AI-supported pricing can often be introduced with fewer dependencies, offering clearer accountability, faster measurable returns and a practical way for organisations to build confidence in real-time decisioning, while strengthening the business case for broader transformation.

Current market attention on pricing should therefore not be seen as narrow. It is a rational first move in a wider maturity journey.

Closing thought 

The longer-term prize lies in optimising the full proposition: which product set to offer, how to package it, how to value it, how to present it and which customer objective to prioritise. It requires commercial redesign, stronger cross-functional governance, cleaner data foundations, faster experimentation cycles and leadership willingness to move from silo optimisation to proposition optimisation.

The industry often speaks about delivering the right offer, at the right time, through the right channel. The stronger ambition is to deliver the right offer, at the right value, for the right customer, with the right commercial intent repeatedly, intelligently and at scale.

That is the emerging discipline of Offer Management, and it is becoming the next decisive battleground in airline retailing.

Catarina Silva, Travel in Motion AG

This blog has been published in collaboration with The World Aviation Festival.

 

 

 

 

 

 

 

 

 

 

 

Airline customer segmentation has traditionally answered a narrow question: who is this customer? Loyalty tier, corporate affiliation, business versus leisure?

Those labels are useful, but they rarely explain why two customers looking at the same flight behave very differently. One books in seconds. The other hesitates, abandons, or calls the contact centre. The difference is rarely price alone. It is confidence, intent, emotion, and context.

Segmentation only starts delivering real value when it drives retail decisions: what to offer, how to present it, when to explain, and when to create desire.

Why airlines segment in the first place

The commercial objectives are well understood:

• higher conversion
• higher basket value
• lower servicing cost
• better customer experience and retention

What is often missing is a clear line between segmentation and these outcomes. Too many segmentation models end up as analytical artefacts rather than influencing offer construction, presentation logic, engagement strategy, and servicing flows.

Effective segmentation exists to optimise the customer’s overall experience while optimising sales and operations for the airline. When done well, it aligns commercial performance and customer satisfaction instead of forcing a trade-off between the two.

From static labels to actionable segments

Segmentation that supports retailing typically combines three dimensions.

1. Context
   Trip type, party size, lead time, destination familiarity, channel, and device. Context often shapes intent more powerfully than demographics ever could.
2. Behaviour and confidence
   Past booking patterns, tolerance for complexity, responsiveness to change, willingness to self-serve, and propensity to add services.
3. Constraints and perceived risk
   Time pressure, budget sensitivity, documentation requirements, baggage complexity (often unknown to the customer), and payment preferences.

Together, these dimensions usually result in a manageable set of 8–12 actionable segments, each with a dominant objective: convert quickly, reassure, upsell, or protect.

Selling, explaining, and managing the emotional load of travel

This is where segmentation becomes a retail capability rather than a classification exercise.

Many infrequent travellers do not “care” about baggage rules, seat selection, or flexibility because they do not yet realise these are decisions they need to make. Others underestimate the emotional stress of connections, tight schedules, or unfamiliar airports until they experience them.

Segmentation allows airlines to surface relevant information at the right moment, reducing uncertainty rather than adding noise. These moments are also where the most effective upsell opportunities emerge.

A well-timed intervention can:

• turn anxiety into reassurance (“most customers on this trip add…”)
• convert stress into control (seat selection, priority services)
• transform anticipation into indulgence (the upgrade the day before a long-awaited holiday)

Selling works best when it reduces emotional stress or enhances the travel moment, not when it forces the customer to defend their choices.

Engagement is an execution choice, not the objective

Communication is one of the execution levers of segmentation, not its purpose.

Segmentation should inform:

• how much to communicate
• through which channel
• with what level of detail

Confident, frequent travellers benefit from brevity, sensible defaults, and control. Infrequent or high-stakes travellers benefit from reassurance, sequencing, and proactive guidance. Too much engagement for one segment becomes friction; too little for another increases abandonment and service calls.

The goal is not more communication, but purposeful engagement.

Where Modern Airline Retailing amplifies impact

Modern Airline Retailing does not create segmentation, but it makes it operational.

Offer and Order-based architectures allow airlines to:

• assemble offers dynamically based on context and intent
• maintain continuity across channels and journey stages
• avoid re-explaining or re-selling the same information

Segmentation only scales when selling, communication, and servicing are all working from the same understanding of the customer and their order. This is the difference between segmentation that works in isolated channels and segmentation that functions as a reusable retail capability.

Making it real without boiling the ocean

This does not require perfect data or a multi-year transformation programme, but it does require a few foundations.

At a minimum:

• access to reliable, timely customer and journey data
• a technology stack or partners that can act on segmentation decisions
• the ability to test, measure, and adapt

A pragmatic starting point:

• identify 3–4 segments with clear commercial or experience pain points
• define one selling objective and one engagement principle per segment
• apply them to a single channel or journey stage
• run A/B tests across both sales and communication

Segmentation is never “done”. Continuous testing is the only way to validate assumptions, demonstrate impact, and improve over time.

What good looks like in practice

1. The confident, frequent traveller
   They book late, travel alone, and know exactly what they want.
   Good segmentation defaults them into a fast, uncluttered path, suppresses unnecessary explanation, and highlights only genuinely relevant options.
2. The infrequent leisure traveller
   They book early, travel with others, and are emotionally invested in the trip.
   Good segmentation surfaces “unknown unknowns” early, explains trade-offs calmly, and positions ancillaries as reassurance rather than penalties.

In both cases, the flight may be identical. The retail and engagement strategy should not be.

The value over time

The power of segmentation is not a one-off uplift, but accumulation.

Across industries, effective segmentation and personalisation consistently deliver higher conversion, increased basket size, and improved retention. For airlines, even small gains in search-to-book conversion, ancillary attachment, or post-booking efficiency compound quickly across millions of passengers and multiple years.

Segmentation done well is not a campaign. It is a capability.

Closing thought and CTA

Customer segmentation is not about collecting more data for its own sake.
It is about using insight to design better offers, clearer journeys, and more confident decisions for both the customer and the airline.

Many airlines already have more segmentation data than they use. The opportunity now lies in turning segments into decisions, and decisions into measurable value.

If that translation is not happening yet, that’s where the real upside still sits.

Daniel Friedli, Travel in Motion AG

 

 

 

 

 

 

 

 

 

 

What it is, why it matters, and why everyone keeps meaning something slightly different

As airlines move deeper into Offers and Orders, one concept keeps resurfacing: the product catalogue.

Depending on who you ask, it is described as the cornerstone of modern airline retailing, a critical dependency, or a technical detail that can be addressed later. In practice, all three interpretations often appear in the same meeting. This post does not try to declare a single “correct” view. Instead, it aims to cut through some of the fog around what a product catalogue actually is, why it matters now, and where the industry broadly aligns and still diverges on how it should evolve. If nothing else, it should help ensure that when three people say “product catalogue”, they are at least discussing the same thing.

What we actually mean by “product catalogue”

In simple terms, a product catalogue is the single source of truth for what an airline sells.

It defines products and services in a structured way, including their attributes and relationships, independent of price, inventory availability, or channel. A quick clarification helps here because the word rules often causes confusion. In this context, product rules describe product eligibility, relationships, and consumption conditions, not pricing logic, revenue optimisation, or offer construction decisions. Put simply, the catalogue describes what a product is, what it includes, what it can be combined with, and what conditions apply once it is sold. It does not determine price or decide which products are offered to a specific customer. A modern airline product catalogue typically includes:

• Core air products and fare families
• Ancillaries such as baggage, seats, meals, lounge access, and flexibility
• Bundles and branded offers
• Non-air and partner products
• Product attributes, relationships, and consumption conditions

Just as importantly, it defines what it does not do. A product catalogue should not handle:

• Pricing or revenue optimisation
• Offer construction logic
• Inventory or stock management
• Order lifecycle management such as servicing or accounting

Those capabilities sit alongside the catalogue, not inside it.

A simple way to separate responsibilities

One way to keep responsibilities clear is to separate them explicitly:

• The catalogue defines the what (products, attributes, relationships, conditions)
• Pricing engines define the how much
• Offer engines define the when, to whom, and in what combination
• Order systems manage the after-sale reality

When these roles blur, teams often spend surprising amounts of time explaining why something “technically works” but “commercially cannot be sold”.

The problem the product catalogue is really trying to solve

The renewed focus on product catalogues comes directly from the limitations airlines encounter when trying to move beyond fare-centric retailing. In many airlines today:

• Product definition is embedded inside fare structures and distribution logic
• Flexibility, bundles, and conditions remain tightly coupled to price
• Launching new products requires coordination across multiple systems
• The same product appears differently across dotcom, NDC, GDS, and other channels
• Scaling dynamic offers becomes fragile, slow, or both

None of this is accidental. These systems were designed to optimise distribution, not retailing. A product catalogue addresses this by decoupling product definition from legacy constructs, allowing airlines to:

• Define products once and reuse them everywhere
• Unbundle and recombine products more flexibly
• Reduce channel inconsistencies
• Shorten time to market
• Support richer retail propositions

Seen this way, the product catalogue is not a shiny innovation layer. It is plumbing. Important plumbing, the kind you only notice when it is missing.

Where the industry mostly agrees

Despite the noise, there is more alignment than disagreement across the industry.

First, product must be separated from price. Without that separation, dynamic pricing and contextual bundling remain constrained by legacy logic. Second, richer product definition is essential. Codes and text strings are not enough if systems and channels are expected to understand what is being sold. Third, the product catalogue is foundational, underpinning offers, orders, servicing, and cross-channel consistency. Finally, transition will be hybrid for a long time. No airline is switching off fare filing, PSS, or legacy distribution overnight. Any realistic catalogue must coexist with today’s systems while enabling tomorrow’s.

These points are increasingly accepted, which is encouraging. It also means the harder discussions tend to begin once consensus is reached.

Where views still diverge

The real divergence is not about whether a product catalogue is needed, but about what role it should play in the wider ecosystem. From an airline perspective, control over product definition is closely tied to differentiation, speed, and long-term commercial flexibility. For larger airline groups in particular, the catalogue increasingly represents core retail intellectual property. From an industry utility perspective, the challenge looks different. Utilities focus on scale, interoperability, and transition safety, providing common structures that allow participants at different levels of retail maturity to operate together. These perspectives are not contradictory, but they lead to different design instincts. This raises practical questions:

• Should product catalogues be airline controlled, vendor provided, or industry hosted?
• How much product definition should be standardised versus airline specific?
• Does shared infrastructure enable retailing, or quietly shape it?
• How do interline and partner scenarios work without limiting innovation?

A useful nuance is that “airline controlled” does not necessarily mean “built in-house.”

Many airlines will rely on vendor platforms to implement their catalogue. The key issue is not who runs the software, but who owns the product model and controls how differentiation is expressed. Most credible paths forward point toward hybrid approaches, combining airline control with shared languages and taxonomies where they genuinely add value. Hybrid is rarely exciting. It is often correct.

What a product catalogue should be, and what it should avoid becoming

Based on current industry experience, some boundaries are becoming clearer.

A product catalogue should be:

• Airline controlled, with clear governance
• Flexible across air and non-air products
• Explicitly separated from pricing and offer optimisation
• Consistent across channels

A product catalogue should not become:

• Fare filing with better marketing
• A hidden pricing engine
• A hidden offer engine
• A constraint on product innovation

When those lines blur, airlines risk recreating the rigidity they are trying to escape.

Why this matters now

The product catalogue sits at the intersection of technology, commercial strategy, and organisation. Getting it right is not just a systems exercise. It shapes how airlines design products, move at speed, and collaborate across an increasingly complex ecosystem.

As the industry moves from experimentation toward scale, these choices become harder to postpone. They will influence whether Offers and Orders become a genuine retailing shift or simply another layer added on top of existing constraints. That is why the conversation is moving from “Do we need a product catalogue?” to “What role should it play, what should it strictly not do, and who should it ultimately serve?” This is exactly the discussion we explore in an upcoming TiMcast episode, bringing together an airline group perspective and an industry utility perspective. Different viewpoints, same problem, and inevitably different instincts on how to solve it.

Which, in this space, is probably a healthy sign.

Roman van Alten, Travel in Motion AG

This post had been published in cooperation with Terrapinn and the World Aviation Festival.

 

 

 

 

 

 

 

With the move to Order the industry realises that financial management needs to change, as well. Traditional revenue accounting is based on legacy standards and technologies, such as tickets and EMDs. In an Order based environment, accounting needs to fundamentally change to Order based settlement, which is much, much more then replacing the words “Revenue Accounting” by “Order Settlement”. Our partner Joachim Zintl covers this transition in our latest white paper “Financial Management – Transitioning to Offer & Order Airline Retailing” which we just released – feel free to download it. We also want to thank Accelya for sponsoring this paper, which allows us to share it in our industry for free.

 

 

 

 

 

For years, airline commercial strategies have treated customer management as a supporting act. Loyalty programmes have focused on driving repeat purchase, surveys have captured post-flight sentiment, and dashboards have summarised historical performance. All of this is useful. All of it is necessary. And yet, most of it operates in isolation.

In a modern airline retailing environment, this fragmentation is no longer sustainable. As airlines move towards offer- and order-based models, differentiation is no longer defined solely by what is sold, but by how well the airline understands, anticipates, and responds to each customer over time. Customer management, long considered an adjunct, is rapidly becoming a core retail capability.

Within Travel in Motion’s Digital Retailing Environment (DRE), customer management sits at the intersection of three forces: Loyalty, Experience, and Insights. When treated together rather than as separate initiatives, they form a single commercial engine capable of shifting airlines from transactional interactions to true lifetime value management.

Loyalty programmes: from profit centres to customer value engines

Over the past decade, frequent flyer programmes have evolved into highly sophisticated and often highly profitable businesses. Their financial success, however, has masked a deeper limitation. Loyalty is still largely managed as a balance-sheet construct rather than as a dynamic system for managing customer value.

In retail-mature industries, loyalty is not primarily about rewards; it is about understanding who the customer is becoming. Airlines, by contrast, often remain optimised around tier mechanics, accrual economics, and redemption liability, while under-utilising the behavioural and contextual signals generated by every interaction.

Within the DRE, loyalty data is not an endpoint. It becomes a foundational identity layer connecting past behaviour, current context, and future intent. When loyalty is integrated with real-time experience signals and continuous insight generation, airlines can move beyond managing customers by segment or status and instead manage them by predicted lifetime value and propensity. This enables far more precise decisions on pricing, benefits, servicing, and where to invest commercial effort.

Experience, the missing revenue signal: connecting emotion, behaviour, and commerce

Airlines collect vast volumes of customer feedback, yet much of it remains retrospective and operationally siloed. In digital retail, customer sentiment is treated very differently. It is a leading indicator of commercial outcomes, continuously monitored and directly influencing engagement, offers, and recovery strategies.

The real power emerges when emotional data is combined with behavioural and commercial signals. Airlines are uniquely positioned here. Few industries have such rich, longitudinal visibility into customer journeys, spending patterns, and life events. Yet this potential is rarely realised because data remains fragmented across loyalty platforms, CRM tools, operational systems, and analytics environments.

By unifying profiles, preferences, sentiment, and transaction history, airlines gain a living view of the customer, one that evolves continuously rather than being refreshed quarterly. This integrated view enables a more disciplined form of personalisation. Not more messages, but better decisions. When an airline understands not only what a customer bought, but how they felt, how they behave digitally, and what they are likely to do next, engagement becomes both more effective and more restrained.

Learning from retailers: why governance matters more than reach

It is tempting to look at digital leaders such as Amazon, Netflix, Starbucks, or Sephora and conclude that airlines simply cannot replicate their models. Scale, frequency, and product simplicity are undeniably different. But the transferable lesson is not scale, it is insight-driven orchestration and governance.

These companies excel at turning insight into action in near real time. Recommendations are contextual, communication is governed by relevance, and loyalty is embedded into everyday engagement rather than isolated in a programme.

A common misconception in airlines, particularly around loyalty and engagement, is that the challenge lies in over-communication. In reality, the issue is outdated control models. Insight-driven recommendations should be used not only to target, but to restrain. They inform when to engage, through which channel, with which message or offer, and just as importantly, when not to engage. This discipline is what enables scale without eroding trust.

Why does this matter now?

Modern airline retailing is pushing commercial leaders into new territory. Pricing is becoming more dynamic, offers more personalised, and distribution more fragmented. In this environment, customer management is no longer a “supporting system”, it is the control layer that ensures commercial ambition translates into sustainable value.

Without integrated loyalty, experience, and insight capabilities, airlines risk optimising offers without understanding customers, pushing personalisation without trust, and managing disruption without commercial context. With them, CCOs gain the ability to align revenue growth, customer satisfaction, and cost discipline around a single organising principle: lifetime value.

The airlines that succeed will be those that stop treating loyalty, experience, and insights as parallel initiatives and start operating them as a unified retail engine. Not beyond points and surveys as an aspiration, but as a necessity for competing in a truly modern airline retailing environment.

Catarina Silva, Travel in Motion AG

 

 

 

 

 

 

 

 

When the Modern Airline Retailing (MAR) programme kicked off in earnest around 2022, it did so with a mix of scepticism, excitement and ambition. Airlines had spent a decade talking about transformation while wrestling with legacy plumbing that persists. The buzz and hype have turned into activity, and progress since then has been unmistakable. Volumes of NDC transactions grew, more carriers began experimenting with Orders and vendors retooled roadmaps. With the creation of the Airline Retailing Consortium and the countless hours airlines, vendors, the International Air Transport Association (IATA) and consultancies put into it, the foundations were laid.

As 2026 comes into view, one should not expect a revolution but rather an evolution of deliberate, confident steps. The industry is moving from “proving the concept” to “making it normal”. Below are the areas where that should be most visible.

Airlines: Pragmatism with Visible Results

Airlines in 2026 are not chasing transformation for the sake of transformation. They are chasing bottom-line improvements, operational predictability and competitive differentiation.

Expect more airlines to announce concrete MAR milestones: full Order pilots in selected channels, retirement of niche legacy flows or live continuous pricing in indirect markets through NDC. Carriers with strong digital DNA and a clear executive-set focus will move faster, but even traditionally conservative players will take meaningful steps driven partly by vendor capability finally catching up, fear of missing out and seeing their partners and competitors making the move. Other factors which will drive decision timelines are expiring passenger service system (PSS) contracts, opportunities to break free from vendor lock-ins and new commercial opportunities.

We will also see airlines get bolder with product differentiation. Rich media, personalised bundles, post-purchase upsell flows and dynamically-created ancillaries will expand as the offer and order management and related systems increase in maturity and reliability. What was previously “demo-ware” will turn into everyday retailing.

Finally, airlines are realising they must treat MAR as an enterprise project with corporate-driven roadmaps, not merely a distribution or technology initiative. We can expect organisational rewiring: commercial, digital, operations and finance working against a coordinated roadmap.

Industry: From Advocacy to Alignment

The broader ecosystem enters 2026 with more clarity on its role.

TiM believes that IATA’s job should increasingly shift from evangelising to enabling. Standards stabilisation (and please, acceleration), governance frameworks, removing regulatory hurdles and settlement evolution should be core focus areas. We expect progress on interline Order capabilities and clarity on product definition and data alignment.

We expect the Airlines Reporting Corporation (ARC) and the Airline Tariff Publishing Company (ATPCO) to keep nudging the industry towards practical adoption. ARC will optimally expand Order-based settlement pilots, while ATPCO refines the bridge between fare filing and dynamic offer construction, providing structure without stifling innovation.

Meanwhile, airports, travel management companies (TMCs) and global distribution systems (GDSs) must be involved more by the airlines, IATA and the consortium to deepen their integration efforts. Without the buy-in of these key ecosystem players, even the best intended transformation plans will not be executed. Airports must focus on making Order data usable for operational planning with the support of the airport software vendors which usually provide a legacy departure control system (DCS). Furthermore, together with airlines, regulators and tech companies, the use of data and biometrics should be expanded to move towards streamlined airport operations which allow customers to have more dwell time for shopping, dining, working or socialising. The innovative TMCs we should see building richer servicing and duty-of-care flows on top of Orders rather than fighting them. GDSs, already repositioning as multi-source aggregators, will continue modernising back-office processes to handle Orders natively.

Technology: The Quiet Enabler

Technology’s role in MAR in 2026 will not invent new buzzwords but rather focus on three practical themes: simplification, decoupling and automation.

The decoupling of Offers and Orders will continue to mature. In 2026, expect more airlines and vendors to treat the order management system (OMS) as the new “gravitational centre” of retailing. While not fully independent from the PSS, we should see capability of orchestrating fulfilment, servicing and settlement events across partners. The shift will not be large-scale globally just yet, but pilots will start turning into production-grade rollouts.

Even more exciting is when application programming interface (API) performance and reliability finally become boring. This is good. Airlines that struggled to stabilise NDC APIs in earlier years are now working with vendors to mature and further standardise additional APIs. Vendors are starting to expose more granular services and deploying event-driven architectures which enable better accessibility as well as more automation built by airlines.

We can already see that artificial intelligence (AI) will stop being a sideshow. TiM expects genuine use cases to help airlines tackle tedious daily tasks, helpers to drive additional revenue or intelligence to orchestrate smart customer experience flows. Other examples we may see, aside from flashy prototypes, are automated quality checks on offer construction, anomaly detection in servicing flows or proactive failure alerts for interline Orders. AI will become a mainstay and serve as a tool in the toolbox of offer creation, order management and customer experience.

We believe technology in 2026 is not about breakthroughs; it is about making the plumbing trustworthy enough that commercial teams can implement new features and capabilities with confidence.

Vendors: Convergence and Clarity

The vendor landscape has spent the last few years in a curious state of both innovation and identity crisis. In 2026, this stabilises and vendors will have defined more clearly in which space they play across the digital retailing ecosystem.

We expect clearer segmentation. The large PSS providers will double down on refining their hybrid models, supporting legacy EDIFACT and legacy system compatibility while offering progressively stronger and, we hope, modular solutions. Mid-tier tech firms that have been in the airline space for a while, and those that more recently entered with enthusiasm will either consolidate or specialise: offer optimisation, segmentation, merchandising via product catalogue and stock keeper, order orchestration microservices, integrations for interline and codeshare and so on. From TiM’s perspective, we hope to see a few examples of true modularity, and one or two bold purchasing decisions where some of the underdogs get a true chance to shine.

Crucially, vendors will be far more transparent about timelines and capabilities, and they will have to be – now it is about commitment and not selling a dream. After years of marketing roadmaps that overshot reality, 2026 brings a more grounded tone. Airlines will push for and get firmer delivery commitments, better transition planning and more standardised interfaces that reduce custom build cycles.

Another shift, and perhaps an overshoot of optimism on our part: integration costs go down, not because the work is easier, but because more vendors align on IATA schemas, adopt shared tooling, utilise AI helpers and participate in joint reference implementations. Interoperability becomes less aspirational and more contractual.

In 2026, Modern Airline Retailing will not “arrive”, but it will become more of a reality for many airlines. Incremental value will be generated by early adopters of initial modules; the legacy systems will have to loosen their grip. The ecosystem, while still in a hybrid mode this year and for several years to come, starts benefiting from the removal of legacy concepts and the use of modern architecture and technology. Progress will be uneven but unmistakably forward.

If the past four years were about proving the value of MAR, 2026 is the year the industry starts extracting that value. Perhaps not yet at scale, but steady drops also fill a bucket.

Daniel Friedli, Travel in Motion AG

This post had been published in cooperation with Terrapinn and the World Aviation Festival.

 

 

 

 

 

The airline industry is undergoing one of its most significant transformations in decades: the shift from legacy, ticket/EMD-based processes to Offer and Order–based retailing. This evolution does not only redefine how airlines sell and service products, but also how they account for, settle, and recognise revenue. Financial settlement which has for a long time being anchored in structured, sometimes even paper-ticket-driven workflows must now adapt to a world where products are very dynamically created, aggregated, and fulfilled and some standard processes shall vanish. Order Accounting emerges as the essential backbone enabling this transition, promising more flexible, accurate, and real-time financial visibility. Yet the journey will differ considerably across full-service carriers (FSC), airlines in a hybrid operational model, and low-cost carriers (LCC). In this blog I will explore where the industry currently stands, how solution providers are preparing, and what the shift means for each airline type.

Where Is the Industry? Where Are the Providers?

Order Accounting has moved from conceptual discussions to early-stage implementation. Several pioneering airlines, mostly major network carriers have begun foundational work to align their financial systems with the transition to Offers and Orders. However, the industry as a whole is still very much in a hybrid world: tickets and orders (when applicable) coexist, legacy settlement rules and cycles remain deeply embedded, and standards for Order Accounting are still evolving.

Industry status today:

• Standards bodies like IATA have advanced definitions for Orders but are still maturing the accompanying financial processes.
• Airlines are experimenting through pilots, proofs of concept, and phased transformations, primarily focusing on front-end retailing capabilities.
• Technology readiness is uneven—Order Management Systems (OMS) are progressing rapidly, but Order Accounting systems lag behind, often still tied to ticket-based data architecture they are somehow obliged to cope with.
• Interline, IROPs and alliance complexities remain largely unsolved in the context of orders, requiring major rethinking of settlement and clearing processes.

Where providers stand:
The provider landscape is fragmented and still emerging.

• Large PSS and revenue accounting vendors are planning or extending existing systems with “Order Accounting modules,” though the depth of true order-centric design varies significantly.
• New-generation OMS providers are beginning to integrate financial capabilities, but often lack the maturity of established accounting engines.
• Specialised startups are entering the space with cloud-native, modular accounting solutions—innovative, but not yet proven at scale.
• Industry intermediaries (e.g., ATPCO, ARC, clearing houses) are exploring how they might support financial processes in an order-driven world from different anckles.

In short, while the retailing landscape accelerates, the accounting and settlement layer is still forming. This lag poses risks but also creates a unique opportunity for carriers and providers to influence how Order Accounting will work.

Impact of Order Accounting Across Different Airline Types

Full-Service Carriers

Network carriers stand to gain the most from Order Accounting but also face the highest complexity. Their operations rely heavily on interline partnerships, codeshares, prorates, and intricate revenue streams. Under today’s ticket-based system, financial reporting is often delayed, fragmented, and filled with exceptions.

Impact on FSCs:

• Significant back-office simplification as ticket/EMD-based events, coupons, and documents are replaced with a single Order as the source of truth.
• Greater real-time revenue visibility, enabling more accurate profitability analysis across itineraries and channels.
• Improved servicing capabilities, especially for complex journeys involving multiple partners.
• Challenges around interoperability, particularly ensuring cross-industry settlement can function without tickets.
• Major transformation effort, requiring coordination between revenue accounting, finance, distribution, and IT.

For FSCs, Order Accounting is not optional, it is foundational to achieving the full benefits of modern retailing and operational efficiency. But they must plan for a multi-year journey.

Hybrid Airlines

Hybrid carriers operate with a mix of simplicity and complexity, offering ancillary-rich products but occasionally implementing partnerships or network-like structures. They are often more agile and less constrained by decades-old accounting infrastructure.

Impact on hybrid airlines:

• Meaningful efficiency gains from consolidating accounting events into a unified order structure.
• Greater flexibility in pricing and bundling strategies as accounting becomes less tied to rigid ticketing data.
• Reduced settlement overhead, especially for carriers with limited interline exposure.
• Moderate transformation cost, usually lower than for FSCs but higher than for pure LCCs.
• Opportunities for competitive differentiation, as real-time financial data can support more dynamic commercial decision-making.

For hybrids, Order Accounting is both achievable and strategically beneficial. They can move faster and gain advantage by adopting modern retailing earlier than competitors.

Low-Cost Carriers

LCCs often operate with simple, direct-sales-driven models and minimal interline activity. Many already use accounting systems that are relatively modern compared with legacy FSC systems, and they benefit from strong alignment between inventory, sales, and settlement.

Impact on LCCs:

• Lower urgency for immediate transformation existing LCC processes already resemble simplified order structures.
• Simplification benefits still exist, especially around ancillaries, servicing, and financial reconciliation.
• Incremental gains in financial transparency and automation.
• Potential future requirement, as industry ecosystems (including partners, payment providers, and regulators) move toward orders.
• Opportunity for low-friction adoption, thanks to simpler operational and business models.

LCCs will feel the pressure later than FSCs or hybrids, but early awareness and gradual preparation will avoid future disruption.

Wrap-Up

Order Accounting represents the financial foundation of the future retailing landscape. The transformation will be significant but also uneven.

• FSCs must begin laying the groundwork now, as their complexity and interline reliance demand early investment.
• Hybrid carriers have an opportunity to move boldly and gain competitive advantage through modernised accounting capabilities.
• LCCs face less pressure in the short term but should recognise that Order Accounting will become industry-standard and start preparing accordingly.

The provider ecosystem is evolving, but not yet mature. This gives airlines a rare chance to help shape the solutions that will serve them in the coming decade. Ultimately, Order Accounting is not merely a technical upgrade, it is the key to unlocking true airline retailing, efficient settlement, and real-time financial clarity. Those who prepare early will be best positioned to succeed in the new landscape.

Joachim Zintl, Travel in Motion AG

 

 

 

 

 

The airline industry is undergoing one of its most significant transformations in decades. The shift toward Modern Airline Retailing (MAR) is no longer a distant vision—it’s happening now. For years, the transition to Offers and Orders has been discussed, but the pace has accelerated. Airlines have started the transition from legacy Passenger Service Systems (PSS) to modern Offer-Order Management Systems (OOMS) to enable dynamic, personalized retailing.

The transition has profound implications for Revenue Management (RM). Retailing enables dynamic, context-specific offers and a more granular trip-specific customer segmentation. To support this, RM must evolve from managing static fare classes to dynamic offer optimisation, including real-time offer curation and contextualised pricing.

Traditional RM: from enabler to obstacle

For decades, Revenue Management (RM) has been the backbone of airline profitability— managing inventories to balance supply and demand while leveraging customers’ willingness-to-pay. This was achieved through forecasting class-based demand and optimising booking class availability. Historically, these mechanisms worked well to segment demand and differentiate products and prices, but today they limit airlines from creating customer-centric, journey-specific offers. Other industries have long surpassed airlines in modern e-commerce capabilities.

Retailing-friendly RM – what will it take?

1. Separate Product from Price

As booking classes and filed fares will become obsolete, airlines gain the freedom to dynamically bundle flights and ancillary services in context-specific offers, and to price them without being constrained to specific price points. Modern product management must evolve to manage components and bundling logic, rather than relying on pre-defined static bundles.
Without classes and filed fares, prices must be optimized for dynamic bundles and a-la-carte ancillaries. Forecasting and optimization models need to handle contextualization and dynamic bundle construction. Real-time pricing modules are essential—offline pre-calculation will no longer suffice in such a dynamic world.

2. Balance “the new” supply and demand for price optimisation 

Despite changes to product and price, RM still needs to balance supply and demand and optimize the passenger mix. The optimised price must reflect capacity constraints, whether for seats or limited supplies of certain ancillary services.

Solutions will still need to determine the opportunity cost of the next unit, or, as revenue managers call it, the bid price. The logic extends from seats to capacity-constrained ancillaries. In the future, opportunity cost needs to additionally reflect post-booking ancillary sales of potential future customers and marginal cost of items offered.

Price optimisation will split into two components:

• a capacity-centric view to determine opportunity cost for seats and capacity-constrained ancillary services, and
• a customer-centric view to build and price contextualized dynamic offers.

While the former averages across all demand segments for a resource and can run offline, the latter requires evaluating customer, request, and market context in real-time. As offer creation moves from distribution partners to the airlines, processing requests in real time with high shopping volumes, e.g., from meta-searchers, becomes a challenge that must be addressed for any new-generation price optimization to scale.

3. Up-level demand forecasting models 

Forecasting demand at increasingly granular levels has always been challenging, also for analysts to comprehending, validating, and influencing system forecasts. As demand segmentation becomes more detailed and context-driven in the new world, this will become even more pronounced. Splitting price optimization into a capacity and customer perspective might allow forecasters and analysts to work on natural aggregates, i.e., leg-level and market-level demand.

Estimating market demand needs to evolve from discrete demand across classes to segment-specific class-less willingness-to-pay (WTP) distributions. This eliminates the restriction of 26 letters of the alphabet and allows unlimited price points.

4. Adopt a new view of willingness-to-pay and elasticity

While airlines have extensive experience in pricing airfare bundles, dynamic pricing for ancillaries is particularly challenging due to limited historical variability. Techniques such as reinforcement learning can help generate the necessary data while simultaneously exploiting customers’ willingness-to-pay. The potential revenue and profit uplifts justify the effort. Several airlines have reported double-digit uplifts when dynamically pricing ancillaries.

Pricing dynamic bundles is still being researched in the scientific and industry communities. Historically, estimating cross-price elasticities from booking data was virtually unfeasible. Dynamically adding components to bundles and optimising contextualised prices requires addressing cross-elasticities. Additionally, bundle and ancillary prices need to be consistent to avoid confusing customers. For example, a superior bundle including an additional ancillary must not be more expensive than an inferior bundle with the ancillary offered a-la-carte. Improved solutions will capitalize on advances in machine learning, combined with a stronger data foundation moving from traditional bookings to Orders consolidating all purchase information.

Additional data streams, such as competitive insights or shopping sessions, can now be integrated to optimise offers. New data sources will emerge in the future, and solutions must be flexible to incorporate them with limited effort. For example, ski resorts in Switzerland and Austria already today factor in weather forecasts to dynamically price ski passes.

5. Prepare for organisational changes

The change beyond technology is not to be underestimated. Revenue managers have long thought in terms of controlling the availability of static fares supplied by pricing managers. Pricing has been structured around fares and fare ladders for decades. Ancillary services are usually handled separately from flights. Moving to Modern Airline Retailing will require rethinking organizations and redesigning established processes to break down siloed decision-making into a holistic market/customer perspective and a capacity/flight perspective. This split also helps re-define clear-cut responsibilities in the organisation.

The way forward

While the potential is enormous—with the promise to drive profits and customer loyalty—the transformation process is, without a doubt, complex and challenging. Luckily, vendors and front-running airlines have already developed promising solutions. Airline leaders must start the transition and follow a stepwise approach as systems become available and more sophisticated.

Progress is already happening, at an accelerated pace year over year. For example, continuous pricing is already practiced by many airlines; solutions are available from various vendors. Even with legacy PSS and RM systems, simple interpolation between filed fares is a starting point. Once solutions are capable of determining an optimal price point, discounting filed fares based on context is the next step.

Sequentially, class-less forecasting and optimisation models will replace legacy RM and pave the road to offers in the absence of filed fares. In parallel, modules for ancillary services can be deployed to gain experience and benefit from uplift potential.

Airlines starting the transition on the IT side need to address organizational changes in parallel and can gain valuable experience with newly designed processes.

During the transition, one more challenge will persist for quite some time: airline and distribution partners might not move as fast and still require legacy processes requiring translation layers connecting the old and new world.

In summary, the future of Revenue Management will be a fascinating, complex, and (sometimes) messy process as our industry continues its journey toward MAR.

Matthias Viehmann, Travel in Motion AG

This post had been published in cooperation with Terrapinn and the World Aviation Festival.

 

 

 

 

 

The transition to Modern Airline Retailing (MAR) has taken off. Numerous airlines are engaged in or considering procurement projects, and a few have already made their first vendor selections.

MAR is also a key subject of the International Air Transport Association’s (IATA) currently ongoing World Passenger and World Finance Symposium in Istanbul, with many vendors and airlines announcing progress in their transition. This is a good moment not only to reflect on the current status of the MAR transition but also to look ahead to what can be expected in the future.

We have summarised our thoughts in our latest white paper:

“Modern Airline Retailing 2025: Realities, Lessons and the Next Horizon”

which we are publishing today. We invite you to download and read it.

We would like to thank Flyr for sponsoring this white paper. This sponsorship enables us to make it available to the whole industry.