Unlocking $130 billion in revenues for airlines by 2020

Ben Hunt

Group Communications Director, Amadeus IT Group

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The merchandising of content could be worth an additional $130bn in revenues for airlines by 2020, Amadeus forecasts today, as it unveiled its vision for a global travel ecosystem, ahead of the opening of IATA’s World Passenger Symposium in California on Wednesday.

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Amadeus believes that by focusing retailing and merchandising squarely on the traveler, and by delivering a rich and personalized experience, the industry is capable of fulfilling its ambition of claiming greater value for the products and services it offers.

Today airlines already derive about $50bn annually through the sale of ancillary servicessuch as on-board Wifi or entertainment packages, largely through airlines’ own direct channels such as their websites. By extending existing merchandising and ancillary sales through the indirect channel also, Amadeus estimates that another $53bn could be generated annually.

Unlocking an additional $77bn will be achieved by innovations in merchandising technology across all channels with the application of advanced personalization techniques aligned with a new customer-centric approach to business. This will deliver personalization of the customer offer throughout via systems that are open, dynamic and intelligent.  Amadeus’ merchandising vision is underpinned by three key elements:  The development and roll out of a new Global Merchandising System that will enable airlines to create their offering dynamically; the evolution of our retailing and distribution systems to enable the efficient and effective delivery of enhanced airline content at the point of sale; and full integration of both the new Global Merchandising System and our retailing and distribution systems with the Amadeus Altéa PSS Suite.

Achieving these levels of revenues is not simply about technology innovation, however, but also deep collaboration across the travel industry, creating new business opportunities for all.

“The introduction of dynamic and flexible merchandising tools for airlines will give them the opportunity to deliver a unique and personalized customer experience for each traveler and in doing so could unlock significant revenues,” said Julia Sattel, Senior Vice President of Airline IT at Amadeus. “Each customer values something different in their travel experience and Amadeus can help airlines to become intimate with their customers’ needs and deliver them the experience that they want, increasing both their loyalty and value.”

Amadeus anticipates working with its airline customers to discover the right way forward for them in partnership, by bringing both the company’s technological expertise but also its business experience to bear. At the same time a critical part of the focus will be on driving travel agency adoption. For travel agencies, search companies, TMCs and Corporations we aim to enable transparent choice over the best and broadest range of content and superior efficiency, while opening more opportunities to differentiate with value-added services and create new business opportunities.

Amadeus executives will be outlining more of the company’s vision over the coming days at the World Passenger Symposium, and further insights will be offered here on the blog. In the meantime you can read more on our website amadeus.com/130by2020.


Traveler Experience, Merchandising, Altea, Events