Both full-service and low-cost airlines are transforming digitally, with carriers planning to increase investment in technology by an average of 13% in 2024, according to Investment trends in travel technology, a new study commissioned by Amadeus. The data shows that carriers are optimistic about the shift to “modern retail,” where airlines adopt a whole new generation of technology to create personalized offers and administer them using a single order record.
A large number of airlines are already taking action, with a third planning to implement new technology for creating offers and order management in 2024, and another 50% intending to implement such technology in the next five years. About 40% of airlines surveyed have already hired additional IT professionals and implemented both business and business process plans, with almost all remaining airlines currently working on these tasks.
According to the survey, the majority of airlines plan to “gradually transition” to new bid and order management technology in the coming years, with 58% of airlines surveyed intending to implement the new model in existing interline partnerships as a first step. 44% said they would start with a gradual rollout of Offer and Order first on the airline’s own digital channels. However, roughly a third of airlines are planning a “big bang” or “one-off” move to Offer and Order across all sales channels when those channels become ready.
| Status | A strategic business plan is in place | Business process transition plan | Hiring talent to make the transition | Liaison with IT services to perform transition |
| It hasn’t started yet | 4% | 12% | 10% | 16% |
| In progress | 52% | 48% | 48% | 44% |
| It has already been fulfilled | 44% | 40% | 42% | 40% |
State of Airline Preparedness for Transition to Modern Retail
In addition to packaging compelling offers, the move to modern retail is also improving the way they ‘deliver’ for passengers at the airport. According to senior airline executives, “improving the airport experience” tops their list of technology priorities, with 65% of airlines planning to enable this by introducing biometrics at key service points such as check-in, baggage claim and boarding in the next three years.
| What is your airline’s top technology priority? | All airlines | FSC | LCC |
| Improving the passenger experience at the airport (e.g. use of self-service and biometrics) | 41% | 44% | 38% |
| Providing an exceptional passenger experience throughout the journey | 39% | 44% | 34% |
| Modernizing your airline’s approach to network management | 39% | 28% | 50%[VV7] [BC8] [VV9] [BC10] |
| Automating customer service (e.g. allowing passengers to change their tickets themselves) | 36% | 42% | 30% |
| Modernizing your airline’s approach to revenue management | 34% | 34% | 34% |
The top five technology priorities of airlines, determined from a longer list of 13 options
Cyril Tetaz, Executive Vice President, Airline Solutions, Amadeus said: “These findings are consistent with our own experience. Several Amadeus customers have made a firm commitment to digitally transform their entire operations with new retail technology. This helps airlines become customer and data-centric so they can better understand passengers and deliver a truly passenger-centric experience. We are increasing our investments to support these trends. This is an exciting time for airlines and their passengers.”
“Our data shows that two-thirds of LCCs plan to increase investment in technology. Interestingly, the main drivers are “innovation” and “revenue growth” rather than cost reduction. Although many LCCs already operate with Bid and Order style technology, the wider industry shift presents opportunities. For example, more than half of LCCs told us they plan to tie up with traditional airlines when those carriers move to new retail technology,” added Dave Evans, CEO of Navitaire.
For editorial questions Contact:
Editor Matt Driskill at [email protected]
For advertising inquiries Contact:
Sales Manager Kay Rolland at [email protected]
