Traveler-centric Innovation: How the Retailer-Supplier model is transforming airline partnerships
In this article...
IATA estimates that partnerships between airlines are responsible for 10-15% of total industry revenue. Moreover, for carriers operating multiple hubs we know this figure can reach up to 40%. That’s because the air transport network is more useful when it’s connected, allowing passengers to reach more destinations with a single, multi-leg itinerary across multiple carriers. And while partnerships have existed for decades, the experience is far from seamless.
Imagine a trip from Nice to Melbourne via Madrid. You purchase the ticket from the long-haul airline’s website yet when you try to check-in online for the Nice to Madrid flight, you can’t, because that leg of the flight is being operated by a partner airline. When you arrive at Nice airport, you discover your frequent flyer status on the long-haul airline isn’t being reflected by its partner. You’re one of the last passengers to board the plane.
Moreover, when the aircraft is held on the tarmac, and you need disruption support, neither airline is equipped to help you find a solution across your entire journey. Then, when you do finally make it to Melbourne, you find out your bag wasn’t transferred to the long-haul aircraft in Madrid.
While this is an extreme example, many of these issues will be familiar to those of us that travel on itineraries built using traditional interline partnerships.
The industry needs more than interline and codeshare
The airline industry was one of the first to achieve standardized interoperability at scale. Passengers have been able to travel with one ticket for multiple airlines since the introduction of interlining in 1947. Better connecting the world and expanding choice for passengers.
Today airlines partner through interline and codeshare agreements that allow travelers to buy itineraries involving more than one airline in a single booking, with one check-in, one ticket and automatic bag transfer.
While better than the passenger booking multiple separate flights, today’s approach has shortcomings. Reliance on traditional standards like EDIFACT, Teletype messages and fare filing mean alignment of service levels, loyalty status and reaccommodation policies is technically and operationally challenging. It’s now possible to collaborate in a way that makes life far easier for passengers and airlines.
Today’s travelers demand a truly seamless experience. One where the offer they’ve purchased is delivered reliably across their entire journey. One where their original expectations at time-of-booking are met. Where their loyalty status is honored. Not just sometimes, every time.
As airlines transform to become truly traveler-centric retailers, it’s no longer acceptable for those elements that make a great trip, like consistency, personalization and high service levels, to fall through the gaps during a multi-airline itinerary. When expectations aren’t met, the brand promise of the marketing airline isn’t realized, causing reputational damage.
For airlines, today’s model constrains retailing best practice. Without the ability to cross-sell, dynamically price, bundle and upsell through interline, it’s too hard for airlines to maximize revenue from partnerships.
That’s why the introduction of the Retailer-Supplier model, enabled by IATA's Standard Retailer and Supplier Interline Agreement (SRSIA), is so vital for airlines seeking to become more traveler centric and more profitable.
How the Retailer-Supplier model will improve the traveler experience
At its core, the Retailer-Supplier model, enabled by IATA's SRSIA, replaces traditional airline partnerships with a far more dynamic, bilateral model. Airlines connect directly with APIs, allowing information to be exchanged far more easily, using modern messages. This is the key to ensuring each airline has rich and timely data about its partner’s products, passengers, and operational status.
In this scenario, when you shop on the retailing airline’s website for a journey involving multiple carriers, it will dynamically request offers from its partner/s (the supplier airline/s). The supplier returns its priced offer to the retailer, and the retailer incorporates it into its final offer for the passenger.
While this may sound simple, it represents a paradigm shift for passengers.
Choosing the product you really want: In reality, the airlines in our scenario are dynamically sharing their own product catalogues with one another. Applicable to all products, this means passengers can book, for example, the specific seat they want across the full itinerary, safe in the knowledge it will be available on each leg of their journey.
Better service across the journey: A single shared order record lets airlines coordinate with real-time updates throughout the trip. This enables a smoother trip for the traveler.
Improved service recovery: During disruption, airlines can instantly propose and compare recovery options across partners to deliver the best outcome for the traveler.
Delivering dynamic airline partnerships
The Retailer-Supplier model is coming into clearer focus, with IATA working to formalize the Standard Retailer and Supplier Interline Agreement (SRSIA), enabling Retailer-Supplier interactions and reducing reliance on legacy protocols.
This is great news for our industry and will deliver a host of benefits for airlines themselves:
New partnership opportunities: Airlines of all types will partner seamlessly — including LCC‑to‑network and multimodal rail — without legacy constraints or artificial flight‑number workarounds.
Retailing across the entire itinerary: Shared product catalogues let airlines unlock new revenue by retailing dynamic offers and ancillaries across partner-operated flights.
Simplified settlement: Settlement becomes frictionless, with supplier costs defined upfront at offer time instead of relying on post‑flight.
Reduced complexity: Modern standards eliminate tickets, EMDs, and related infrastructure, removing a major layer of operational and interline complexity.
Amadeus is driving incremental Retailer Supplier value for the industry
We’re working closely with multiple airlines to accelerate industry transformation, notably Finnair, British Airways, Saudia, Air France-KLM, all committed to using Amadeus Nevio to modernize, improve retailing and become more traveler-centric
The Retailer Supplier model represents a cornerstone of our work to help airlines transform. We are developing solutions to support new airline relationships as a transversal capability within Amadeus Nevio.
These capabilities are beginning to enable airlines to act as both retailers and suppliers, connecting with partner carriers and third-party content providers to retail and service consolidated Offers and Orders for the traveler.
Yet the wider industry transition to Offers and Orders will take time as airlines adapt business processes, with upgrades in areas like revenue accounting and delivery management needed to fully facilitate Retailer Supplier partnerships. During this period, airlines will need to facilitate both traditional interline and Retailer Supplier relationships concurrently, depending on the IT and business readiness of each airline with which they partner.
We’ve prepared specifically for this scenario, so airlines can deliver the benefits of transformation to us as travelers, while continuing to support important traditional partnerships. We’re already working with several airlines on the following Retailer Supplier use cases:
Better cross selling ancillaries through partners.
Bringing dynamic pricing across the complete itinerary for air and ancillaries.
Settlement with orders.
Improved servicing and delivery with orders.
Integration of multi-modal transport options, like rail.
We are also prioritizing partnership benefits across different types of airlines. For example, as we develop Amadeus Nevio, our Navitaire Stratos solution for low cost and hybrid airlines will also include native Retailer Supplier capabilities, opening the door to simplified partnerships amongst airline groups, and between carriers with differing business models. Linking different airline types in this way is one of the most exciting developments in recent memory.
Retailer Supplier benefits are now within reach
Now is the time for airlines to begin planning how Retailer Supplier might be applicable to their transformation. With IATA’s working groups having made significant progress on SRSIA and related Offer and Order standards, it’s now possible for airlines to begin proof of concepts.
Modernizing how airlines partner is one of the least discussed but most significant aspects of the retailing transformation. By greatly expanding potential route combinations and ensuring travelers receive the product and service they’re expecting, it promises fundamental improvement to the air travel experience.
TO TOP