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.

 

 

 

 

Matthias Viehmann, Professor of Aviation Management and Quantitative Methods at University of Applied Sciences Worms, supports Travel in Motion (TiM) in revenue management and dynamic pricing. With airlines transitioning to Modern Airline Retailing (MAR), the offer process is becoming key to enhancing the customer experience and increasing airline revenue.
Matthias, who holds a PhD in economics from the Karlsruhe Institute of Technology (KIT), combines airline experience gained during his career at Lufthansa and consulting various airlines with the latest academic research in this highly complex and scientific field. Hochschule Worms is one of the leading European research and educational institutions for aviation management.
Jointly with TiM’s Senior Advisor, Peter Schöber, and other leading TiM experts, Matthias will strengthen TiM’s capabilities in revenue management and dynamic offer consulting. Matthias’s academic foundation elevates the partnership with TiM beyond joint projects to also include practice-driven research.
Do you want to get to know Matthias? He will host one of our next TiMcast, focusing on the latest trends in revenue management – stay tuned!

 

 

 

 

Wow – what a journey it has been. Time flies when you are having fun, and fun it has been. On 6 October 2015, Nick Stott and Daniel Friedli officially incorporated Travel in Motion GmbH – at that time as a limited liability company (LLC) with very limited future growth plans or vision, simply aiming to provide their knowledge and experience to the industry without the influence of an employer acting in its own interest rather than that of the customer. Since then, we have grown into a team of 17 highly motivated and experienced aviation experts with a strong focus on the digital transformation of airlines’ commercial processes and systems.

From a two-man show with the occasional freelancer to support us when workloads increased, we gradually expanded. We had a decision to make, and we made it. We decided to grow and add value to our industry not only by helping airlines and vendors tackle their commercial strategic growth but also by being a bridge between the numerous players in the ecosystem. The evolution of our industry is only possible if all market participants aim for the same target and overcome incumbent conflicting interests – and we want to play a fundamental role in enabling this.

We hired our first employees and expanded our ownership structure to include Boris Padovan and Andrea Riesen, both of whom helped set the foundation for our growth plan. With them, we began executing our expansion. Our first few employees were instrumental in convincing us that growth is the right trajectory. However, this was just the beginning. Soon we realised that our small team was no longer able to manage the demand and that we’d need additional people. However, hiring is not easy and finding the right match in terms of knowledge and skill as well as the ability to engage with customers in a constructive and empathetic manner proved more challenging than expected. We started to look beyond the borders of Switzerland and decided that a multinational team spread throughout Europe would work as well. It was more important to grow sustainably than quickly.

Prior to the organic growth, we used 2022 to enter into a very fruitful strategic partnership with Oystin Advisory, a German consulting firm focused on the distribution aspect of airlines. Our partnership with Oystin has also been pivotal to our expansion, as together we serve our airline customers in all areas of distribution – from commercial strategies to transformation strategies, and from distribution contracting to technology procurement and contracting. With this additional momentum from that collaboration, we were headed for additional growth. To cater for that growth, we transition from a limited liability company (LLC) to a true shareholding in July 2024.

Soon, we had team members in the UK, Finland, Croatia, France, Germany, Estonia and Portugal – a new challenge in terms of communication and coordination but one we gladly take upon us. We not only had various nationalities represented, but also varying degrees of experience and different fields. We also had a number of specialists as freelancers – people who excel in a specific area and can support TiM with long-term industry experience and key pockets of knowledge which will help us cover an even wider scope in the airline commercial scope.

A big step for Travel in Motion in 2025 was incorporating Joachim Zintl’s Tailwind Consulting into TiM. That allowed our group of partners to grow from three to four, with Joachim Zintl  joining us to further expand Travel in Motion in the area of payment, settlement and airline finance.

At the same time, TiM had to become more professional while maintaining its spirit and start-up-like enthusiasm. We had to build an internal organisation with defined responsibilities and processes – not always easy, as we wanted to maintain the momentum that comes from a motivated team. We didn’t want to build hierarchies but needed to implement more structure. With that, in April 2025 we transition to a structure with better defined leadership roles, clear responsibilities over company strategy, marketing, business development, human resources and finance. Optimising business operations had become much more important.

Looking back, we are proud to have overcome the biggest hurdles including COVID, early teething challenges and establishing an internal structure, without compromising our spirit, openness and love for the work we do. We have been able to maintain a culture of professionalism while being fair and doing all we can first and foremost in our customer’s interest, not in ours or not in the interest of an external entity. At the same time, we have been able to build a team of like-minded and motivated people to carry our message and methodology into the world. And, we have built a team with many younger people with new ideas, new ways of working and an excitement for this industry, which is unparalleled,

Looking forward, we are confident that we can maintain this momentum, and we will continue to work every day in every engagement to remain your partner of choice and trust. Thank you for carrying us to where we are today! We are incredibly proud of our team, we have kept its spirit, and we continue to thrive in serving our industry: airlines, vendors and industry bodies.

Daniel Friedli, Travel in Motion AG

P.S. Interested in more official and less official background on ten years of TiM? Listen to our October TiMcast, where Daniel Friedli, Nick Stott, Boris Padovan and Joachim Zintl share one story or another, moderated by Susan Carter.

 

 

 

 

Are you attending IATA’s World Passenger Symposium or World Financial Symposium in Istanbul on 5 and 6 November? If you are, we would like to draw your attention to our second Airline IT Vendor Distribution and Retailing Masterclass, as several airline IT vendor partners have approached us asking for a dedicated masterclass for the vendor community.

We are therefore pleased to announce that we will hold our next

Airline IT Vendor Distribution and Retailing Masterclass – exclusively for the vendor community – in

Istanbul on 4 November 2025

(the day before IATA’s World Passenger and World Financial Symposiums)
from 12:00 to 18:00. It will be followed by a joint drinks reception with finger food.

Our agenda includes sharing insights from our airline engagements, providing thought leadership and offering a forum for the vendor community to exchange ideas and discuss without airline participation:

12:00 Kick-off with a joint lunch
13:00 Status of the industry
13:45 Perceived challenges of the transition to modern airline retailing
    Views from an industry and airline perspective
14:45 What airlines are considering in their procurement processes
15:45 Break
16:15 Learnings from TiM engagements
17:00 TiM’s recommendations to the vendor community
17:30 Discussion and wrap-up
18:00 Drinks reception with finger food
20:00 Finish

The fee is CHF 1,750 per person, with a reduction of 15% for the second ticket and 25% for the third and any further tickets purchased by employees of the same company.

You may register here for this event.

We look forward to discussing and seeing you in Istanbul.

 

 

 

 

 

Rethinking Airline Loyalty Part II: Making Traveller Status Real

In my previous blog Rethinking Airline Loyalty: Why Traveller Status Could Be a Strategic Game-Changer, I posed a provocation: what if airlines could reward travellers before they ever flew with them, simply based on travel behaviour elsewhere? A “Traveller Status”. Since publishing that post, I have received strong feedback and comments. The enthusiasm for the idea was matched only by the question that inevitably followed: “How would we actually do this?”

Let us move from concept to action. Turning this idea into reality is more than perks and marketing. It touches data access, IT infrastructure, partnerships and even the politics of loyalty programmes. Here is how airlines can make Traveller Status real and the roadblocks they will need to navigate.

How to collect travel behaviour outside your ecosystem

The Traveller Status model rests on one foundational capability: access to travellers’ flight behaviour before they ever book with your airline. That requires both data sources and traveller incentives:

• Traveller-provisioned data: encourage travellers to share their past travel activity through opt-in mechanisms such as
  • Email parsing: tools that extract flight details from confirmation emails (e.g., how TripIt and Google Trips work)
  • Loyalty wallet apps: leverage platforms that aggregate loyalty accounts (e.g., AwardWallet, Point.me or Cardlytics)
  • Receipt syncing apps: allow users to upload travel receipts or sync with apps such as Expensify
• Corporate and TMC feeds: partner with TMCs and corporate travel platforms to analyse aggregated, anonymised behaviour of frequent business travellers
• Travel affinity signals: explore partnerships with data marketplaces or customer data platforms (CDPs) that use web cookies, bookings and cross-site behaviour to identify travel-intent users across brands
• Incentivising travellers to share data: travellers will provide their data if the value is clear. Practical motivators include
  • Status jumpstart: “Get Traveller Status by syncing your travel activity, no miles needed”
  • Gamification: “Unlock vouchers or perks based on verified travel behaviour”; “Gain wallet cash for each trip”; “Collect stamps in your digital travel book for discounts”
  • Loyalty match and upgrade: match their status elsewhere and instantly upgrade if they share proof of travel volume.

This turns data collection into a transparent, high-value exchange.

Who gets Traveller Status?

Once data is collected, airlines can define the segmentation logic for Traveller Status (e.g. 10 or more flights in the past six months, overlap with strategic routes, premium cabin or ancillary spend), using behaviour indicators that show acquisition potential.

How to reward the traveller

Most loyalty programmes today reward how much someone flies. But in the retail era of airline commerce, how they book and interact can be just as valuable, especially for Traveller Status. This opens the door to a more modern framework, where profitable, direct or high-engagement behaviours are rewarded.

Channel-based incentives: prioritise and reward behaviours that drive better margin or data ownership for your airline:

• Booking directly on airline.com or the mobile app: cash wallet credit, fee waivers, discounts or early access to sales or dynamic offers
• Engagement with owned channels: rewards for using the app (push notifications, wallet cards, in-app upgrades); perks for opting in to personalisation, alerts and fare tracking
• NDC-based purchases: incentivise bookings through partners connected via NDC, similar to booking directly

Profile enrichment: offer perks or Traveller Status credits for completing profile information, preferences or payment details. This strategy turns Traveller Status into a retail onboarding engine.

What are the IT and commercial implications?

This shift from reactive loyalty to proactive engagement will require investment, but it positions airlines for long-term commercial agility.

Deploying Traveller Status touches multiple systems, for which airlines must consider:

• CRM readiness to ingest and segment prospects based on external travel data
• Offer engine flexibility to personalise offers based on inferred value, not just loyalty tiers
• API infrastructure to allow integration with third-party data sources
• Consent management to comply with privacy regulations
• Customer identity resolution to link fragmented digital profiles, especially if a traveller has not previously interacted with the airline (e.g. LiveRamp, Acxiom)

It also touches the broader loyalty and commercial ecosystem, for which airlines must prepare:

• Alliance recognition: begin with benefits limited to your airline only, and extend as partners are ready
• Credit card partner reaction:
  • Use Traveller Status to highlight credit card offers tied to travel behaviour
  • Involve banks in status qualification
  • Enable credit card spending or travel-related purchases to contribute towards status
• Retail and travel partner participation:
  • Enable status based on partners’ tiers (e.g. hotel platinum or car rental gold)
  • Enable third-party partners to issue benefits for Traveller Status holders
  • Enable a shared “travel behaviour score” across your partner ecosystem
• Track performance and measure ROI:
  • Tie Traveller Status offers to unique promo codes or booking paths
  • Track redemption, upsell behaviour and lifetime value
  • Compare travellers who received offers against those who did not, but matched on behaviour

Can airlines start Traveller Status today?

The short answer: yes, but not at full scale. Current ecosystems are not built to support a fully open Traveller Status model. But airlines do not need to wait until 2030 for new architectures.

Low-risk, high-signal examples that could be deployed now include:

• Building a Traveller Status onboarding widget inside the airline app where customers can sync email receipts, add trip data manually or connect to a wallet aggregator
• Identifying fragmented travellers on high-yield routes and extending Traveller Status invitations
• Partnering with TMCs or SME travel platforms to spot multi-carrier frequent travellers, then offering Traveller Status as a conversion lever

Traveller Status reflects a fundamental shift in thinking, but it is also a test of commercial courage. For those who take the lead, the reward is significant: a smarter, faster and more direct path to building meaningful traveller relationships in a fragmented world.

Catarina Silva, Travel in Motion AG

This post has been published in collaboration with Terrapinn.

 

 

 

 

 

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

• Lenny Rachitsky, 2025. The hierarchy of engagement | Sarah Tavel (Benchmark, Greylock, Pinterest). Lenny’s Newsletter. Available at: https://www.lennysnewsletter.com/p/the-hierarchy-of-engagement-sarah (Accessed 8 August 2025).
• Tavel, S. (2017) ‘Five lessons from scaling Pinterest’, Medium, 27 March. Available at: https://sarahtavel.medium.com/five-lessons-from-scaling-pinterest-6a699a889b08 (Accessed: 8 August 2025).
• Tavel, S. (2023) ‘Don’t Fall Into the Trap of Taking the Wrong Lessons from Others’ Success’, Sarah Tavel’s Newsletter, 14 July. Available at: https://www.sarahtavel.com/p/dont-fall-into-the-trap-of-taking (Accessed: 8 August 2025).

Monzo

• Monzo (2023) What we learned from 43 experiments in 12 months. Available at: https://monzo.com/blog/2023/03/28/what-we-learned-from-43-experiments-in-12-months (Accessed: 12 August 2025).
• Monzo (2023) How we launch new products at Monzo. Available at: https://monzo.com/blog/2023/
• Monzo (2023) Today we’re launching Monzo Investments. Available at: https://community.monzo.com/t/today-we-re-launching-monzo-investments/153181 (Accessed: 12 August 2025).
• Monzo (2025) Invest in what matters to you. Available at: https://monzo.com/investments (Accessed: 12 August 2025).

Orange (Europe)

• TM Forum. 2021. IG1133C Federated Catalogs for (Automated) Procurement — Orange Case Study. Available at: https://www.tmforum.org/resources/exploratory-report/ig1133c-federated-catalogs-for-automated-procurement-orange-case-study-r15-0-1/ (Accessed: 14 August 2025).
• Orange Business. 2025. Orange Business accelerates its digital transformation with leading technology partners to deliver simplified digital experiences for customers. Available at: https://www.orange-business.com/en/press/orange-business-accelerates-its-digital-transformation-leading-technology-partners-deliver (Accessed: 14 August 2025).
• Oracle and TM Forum. n.d. TM Forum: Attaining Agility. Available at: https://www.oracle.com/a/ocom/docs/industries/communications/tm-forum-attaining-agility.pdf (Accessed: 14 August 2025).

 

 

 

 

 

 

 

Airlines are risk averse. Everybody knows that, right? And rightly so – safety and risk management in the aviation industry is something that must be taken seriously. Ensuring safe operations is the single most important topic for any airline, and we as an industry collaborate to ensure that thousands of flights take off and land every day without incident – that is risk management (rather than aversion) at its finest. Part of ensuring safety in the air is having rock-solid IT systems on the ground that enable this – flight planning, flight operations management, weight and balance and so on. Indeed, airlines have historically been pioneers in running large-scale IT operations that could support a global business operating non-stop around the clock. But now, when we are talking about modernising airline IT, some of these airline applications look a bit, well… clunky. As with many that are pioneers, you often get overtaken by others that learn from your early mistakes. Or you reach a level of maturity that becomes costly and difficult to disentangle. As an industry, we have known this for years, probably decades – while we still have our monolithic reservation systems, the world of IT has moved on dramatically. Pretty much everything has “gone digital” – how we listen to music, watch TV, how we bank, how we shop, how we dress ourselves and even how we meet the love of our life.

How has this been made possible? Well, the advent of the internet helped of course, but more critically the way we build and run software applications has fundamentally changed. Cloud computing has enabled a degree of agility in building software that was not present ten, or even five years ago. Nowadays, a new digital services company can bring its product to market in a matter of months, sometimes even quicker. In the airline industry, sometimes implementing a new SSR can take longer. A new codeshare partnership? Let’s not go there. New cabin products? Ok, let’s stop with the scary examples J

While airlines have managed to “go digital” to a certain degree, the core is still old and clunky (some older and clunkier than others, but still in relative terms “old”). So, when we talk about changing these core systems, we realise that we maybe do not have the agility that other, younger industries may have. The monolithic nature of the airline IT landscape certainly does not make transforming easier, although here we come back to the topic of airlines and “risk aversion”. We spend a lot of time talking with airlines and vendors about transformation – where to start, what is the value, where is there least risk? How do we break down this “legacy” technology stack into manageable chunks? There is a perception that the airline retailing transformation journey is a path frought with danger, that it is something akin to the “knife-edge” PSS migrations that we all love to reminisce about (but wouldn’t want to repeat). Indeed, given that one possible (and, for some at least, desirable) outcome of the transformation is a more modular IT landscape, it is a clever tactic of some incumbents to paint this picture (“better the devil you know”). But is this really the case? Is the airline retailing transformation such a mammoth undertaking that it could threaten the commercial existence of an airline? (We used to say that if an airline was unable to operate for more than a handful of days, they would be out of business). While some may see it this way, I don’t think so – I think this is rather a case of us (as an industry) falling back to our “risk averse” way of thinking. Yes, there will be risks along the way, but the key to making the journey as risk-free as possible is having the right mindset. Risks should not stop us taking bold moves – we just have to play the game with careful consideration. Disentangling the legacy wiring of our industry will take years – we all understand this. But if we break this down into manageable, bite-sized chunks, we not only make progress more quickly but also reduce the risks as much as possible. We make small steps that have a low impact, manage this carefully, learn from the approach and repeat the exercise. Indeed, some airlines we work with are already on this journey – taking the first steps to bypass some legacy processes and tech to prove out the feasibility of their Offer and Order transition approaches.

So yes – airlines may be risk averse, however that’s not the same as being change averse. The airline retailing transformation will involve risk, but that does not mean the journey is something to fear — it’s something to manage, deliberately and thoughtfully. Just as we already manage risk every day in operations, compliance and safety, we can apply that same discipline to our commercial technology. The journey toward modern retailing is not a single leap, but a series of deliberate steps — tested, learned from and repeated. And many airlines are already on this path, bypassing legacy constraints to explore what’s possible in Offer and Order transformation.

If you’d like to explore how to take the first steps (or the next ones), we’d be happy to talk.

Nick Stott, Travel in Motion AG

This post has been published in collaboration with Terrapinn.