Travelport has achieved level 4 NDC certification as an aggregator from IATA. This certification confirms Travelport is able to provide full offer and order management and servicing of an NDC booking, complementing the current capabilities of voiding tickets and cancellations with new capabilities to modify and exchange tickets as well as processing refunds. 

This end-to-end booking management capability is a crucial part of the day to day travel management that Travelport’s customers rely on.

Travelport has been offering NDC content from a small number of partner airlines since October 2018 and has taken a phased approach to its NDC roll out plans in order to build an NDC solution which works for all parts of the interconnected travel industry. 

Commenting on the certification, Jason Clarke, Chief Commercial Officer, Travel Partners said: “Delivering NDC content to our customers is a crucial part of Travelport’s multi-source content strategy and this certification is the next step in recognizing our NDC capability. Managing complex itineraries for their travelers, including changes and disruptions, is a core part of the role of our travel agency customers so this functionality is important in bringing NDC to life for the whole industry.” 

Travelport is working with a number of IATA NDC Leaderboard airlines on their content distribution strategies in a production environment and with a wide range of travel agencies, online travel agencies and travel management companies to ensure its multi-source content strategy, of which NDC distribution is a part, meets the needs of the whole, global travel industry. 

The next meeting of the Travelport NDC Leadership Council will take place in Q2 2020.

Travelport

Alex Lynn

How will travel technology evolve in the coming months? Technology brand Travelport has a few ideas. Travelport conducted research with the help of surveyed travel professionals, travelers and travel brands to offer the following insights.

Travelers continue to want digital self-service options and communication. Travelport found 55 percent of travelers prefer to learn of travel disruptions, for example, via digital communications versus speaking with someone directly. This was particularly true for Generation Z and business travelers.

Travelers will still want to use apps during their travels, but they want those apps to do more for them, versus having to use a range of apps to get through their day. Travelport references the “super apps” becoming more popular in Southeast Asia, such as WeChat, Grab and Go-Jek. These and similar apps provide travelers with one place to book travel, bank, shop, communicate, find a date, order food delivery and pay on the go.

Lastly, Travelport expects the way travel is retailed and purchased online to grow significantly, with more offerings than ever before.

“These insights into the forces which will shape travel experiences as we start a new decade show we’re seeing rapid change in content retailing particularly online and an evolution of mobile travel as we all increasingly depend on our devices to help us navigate the world. It’s clear to see customers are driving change across the travel industry with new topics, such as the environmental impact of travel and when an agency could successfully employ a ‘bot’ show the 2020s will be another era of rapid change for travel,” said Fiona Shanley, chief customer and marketing officer, Travelport.

Our Source: https://www.trazeetravel.com/upcoming-technology-travel-trends/

The government has now extended the deadline for phasing out of the old ordinary passports by one more year until March 1, 2021.

The old passports were originally supposed to be phased out by August 31, 2019, but the deadline was extended to March 1, 2020 before now being pushed to next year.

Interior Cabinet Secretary Fred Matiang’i, in a statement released on Monday, said the new extension is due to the fact that approximately 1.8 million Kenyans, especially those living in the diaspora, are yet to migrate to the new generation e-passports.

“…the government hereby extends the deadline for voiding the current dark blue machine-readable passport by 12 months. As such, its holders may continue using it until March 1, 2021 when it will no longer be valid for travelling,” said the CS.

“Considering this is the second extension, the 1.8 million Kenyans still holding the dark blue passport are urged to take full advantage of this period to acquire the EAC-format electronic passports at the earliest opportunity possible, to avoid last minute rush, unnecessary jam-ups at the centres, and travelling inconveniences.”

According to CS Matiang’i, same-day issuance of passports is also in the pipeline and is expected to be achieved by July 1 this year.

The CS also announced that, to faster facilitate this process of migration, the government has since set up four more new passport control centres in various towns in the country; Nakuru, Kisii, Eldoret and Embu.

Six more centres have been set up in the diaspora; three in Europe (Berlin, Paris and London), one in the U.S. (Washington DC), another in Johannesburg, South Africa, and one more in Dubai.

Our Source: https://citizentv.co.ke/news/govt-extends-deadline-for-migration-to-e-passport-to-2021-323968/

Kenya Airways (KQ) has lost $8 million in revenue in about one month since it suspended flights to China as a precaution against the deadly coronavirus outbreak.

The losses on the Nairobi-Guangzhou route include foregone passenger and cargo revenue.

Acting chief executive Allan Kilavuka told The EastAfrican that China is a key cargo origin as well as a main feeder to the regional freighters, and the suspension of flights since the end of January has dealt a big blow to the airline’s revenues.

“We are looking at lost revenue of about $8 million, both passenger and cargo. However, various initiatives are in place to increase passenger and cargo revenues on other routes to minimise this impact,” said Mr Kilavuka.

The coronavirus has so far infected more than 75,000 people globally and killed over 2,200.

“I am optimistic that the situation in China will be under control soon and we will resume our service that continues to create convenience and a good flying experience for all our guests,” he added.

He said that KQ switched the aircraft that operated the route to China, to Dubai, from February 11, and changed the timing of the Bangkok flight from a midnight departure to early morning as a way of maintaining operational efficiency and minimising disruption to passengers.

“Due to our additional precautionary measures we have faced some delays in operations. We are working closely with the port health teams from the Ministry of Health as guided by the World Health Organisation who continue to monitor and advice on the next steps to take with regards to the coronavirus,” he said.

KQ’s stock on the NSE has fallen by 1.29 per cent over the past month to trade as low as Ksh2.29 ($0.022) per share on Thursday last week.

In the past seven years, the share price has dropped by over 75 per cent from a high of Ksh9.40 ($0.094) in 2013.

KQ, which is set to be delisted from the Nairobi Securities Exchange after parliament approved its takeover by the State, widened its losses for the year 2018 to Ksh7.5 billion ($75 million) from Ksh6.4 billion ($64 million) in 2017.

Its net loss for the six months’ period to June 30, 2019 more than doubled to Ksh8.5 billion ($85 million) from Ksh4 billion ($40 million) in the same period the previous year (2018).

Globally, the International Air Transport Association (IATA) forecast the aviation industry will lose $29 billion worth of passenger revenues this year, of which $40 million will be from African airlines.

According to IATA, carriers outside the Asia-Pacific are forecast to lose $1.5 billion, assuming the loss of demand is limited to markets linked to China.

Global traffic is forecast to drop, causing the first overall decline in demand since the Global Financial crisis of 2008-2009.

“This will be a very tough year for airlines,” said Alexandre de Juniac, IATA’s director general and chief executive.

“It is clear the airlines are struggling. Our initial analysis suggests that we are facing a 4.7 per cent hit on global demand. That could more than eliminate the 4.1 per cent growth we forecast for 2020 in December.”

Kenya Airways flies to Guangzhou, China’s third-largest city, three times a week.

Before the suspension of the flights, a passenger from China was quarantined after being suspected to have contracted the deadly flu-causing virus.

Regional airlines such as RwandAir and Air Tanzania have also suspended flights to China over the viral outbreak.

Globally, Virgin Atlantic, Germany’s Lufthansa, Air France and KLM SA have also stopped flying to China.

Kenya’s lawmakers have approved the nationalisation of KQ to save the airline that has been run down by mismanagement and mounting debts.

The government has adopted a plan to buy out KQ’s minority shareholders and convert shares held by commercial banks into debt.

Under the plan, the government will also create a special purpose vehicle — Aviation Holding Company (AHC) — to manage Kenya’s aviation sector.

The AHC will have four subsidiaries — Kenya Airways, Kenya Airports Authority, Jomo Kenyatta International Airport and a centralised Aviation Services College, which will be run independently.

KQ is 48.9 per cent owned by the government, and a group of 11 local banks which own 38.1 per cent of the shares.

Other shareholders include KLM Royal Dutch Airline (7.8 per cent), employees (2.4 per cent) and other shareholders at 2.8 per cent.

However, the airline is facing difficulties keeping up with its competitors such as Ethiopian Airlines, Rwandair, Emirates, Qatar and Etihad, which are all fully state-owned and subsidised, and have engaged in aggressive growth strategies focused on volume and market share.

KQ’s former chief executive Sebastian Mikosz quit in mid-December after he declined to extend his three-year contract, which expired on December 31, citing personal reasons.

In July last year, chief operating officer Jan De Vegt resigned after serving for three years, and chief financial officer Hellen Mathuka was suspended in September.

KQ was listed on the NSE in 1996 after the government offered a 51 per cent stake to the public at an offer price of Ksh11.25 ($0.11) per share.

Our Source: https://www.theeastafrican.co.ke/business/KQ-counts-lost-revenue-after-flying-out-of-China-route/2560-5465490-1s1k0h/index.html

The dreaded Corona Virus that has so far claimed over two thousand lives could cost the worldwide airline revenue over USD 5 billion dollars, the International Civil Aviation Organisation (ICAO) has said.

As the countries try to prevent the spread of the disease into their cities, airlines world wide have cancelled flights to China while Chinese airlines have been forced to cut down on their services due to poor demand for flights.

Kenya Airways was among the airlines that cancelled flights to China in a bid to protect their passengers and crew. Kenya Airways suspended all flights to and from Guangzhou in China on January 31.

Among other airlines that have suspended flights to China include Qatar Airways, Emirates, KLM, Egypt Air, Turkish Airlines, Lufthansa, RwandAir and British Airways.

ICAO reported that some 70 airlines have cancelled all international flights to/from mainland China, and that a further 50 airlines have curtailed related air operations. This has resulted in an 80% reduction of foreign airline capacity for travellers directly to/from China, and a 40% capacity reduction by Chinese airlines.

ICAO’s preliminary estimates indicate that the first quarter of 2020 has instead seen an overall reduction ranging from 39% to 41% of passenger capacity, or a reduction of 16.4 to 19.6 million passengers compared to what airlines had projected. This equates to a potential reduction of USD 4 to 5 billion in gross operating revenues for airlines worldwide.

The above estimates do not include potential impacts due to reductions in international air freight movements on cargo-only aircraft, airports, air navigation service providers, to Chinese domestic air traffic, or to international traffic with respect to the Hong Kong and Macau Special Administrative Regions of China, or its Taiwan Province.

With respect to major tourism-related impacts in the first quarter of 2020 due to reductions in Chinese air travellers, ICAO estimates that Japan could lose USD 1.29 billion in tourism revenue, followed by Thailand at USD 1.15 billion.

The agency also noted that Corona Virus impacts are expected to be greater than those caused by the 2003 SARS epidemic, in light of the higher volume and greater global extent of the flight cancellations being seen. Seasonal passenger load factors are another extenuating factor, as is the fact that China’s international air traffic has doubled, and its domestic traffic increased five-fold, since the 2003 period.

And as China struggles with the virus, the World Travel and Tourism Council (WTTC) has urged against the stigmatisation of tourists and groups from China over the virus.

The president and CEO of the body that represents the global travel and tourism private sector Ms. Gloria Guevara made the appeal stating that the panic, seen as a way of containing the Corona Virus could run the risk of stigmatising one of the world’s biggest tourist groups and may cause long term harm.

The United Federation of Travel Agents Associations (UFTAA) noted that the virus has caused extreme damage due to the loss of lives and over 70, 000 infections.

The disaster, UFTAA President Mr Sunil Kumar said, has also disrupted tourism.

He urged the member agencies to honour the appeal of the China Association of Travel Services (CATS) for support and assistance as association members, in order to minimize the losses of Chinese Tourists and Chinese Travel Agencies to strengthen the much-affected Chinese Tourism.

Our Source: Kenya Association of Travel Agents (KATA)

Registration of new aircraft owned by wealthy Kenyans and private aviation firms nearly doubled last year in a mark of growing affluence that has been driving up demand for air travel.

The Kenya Civil Aviation Authority (KCAA) registered 87 new aircraft last year, up from 48 fresh listings in 2018, pushing the number of planes in the country to 1,548, excluding those owned by the National Police Service and the Kenya Defence Forces.

The 1,548 aircraft comprise those belonging to operators of scheduled and charter flights and privately-owned planes that operate from small airports and airstrips.

Kenya’s business magnates, politicians and new millionaires are fast taking to the skies as the preferred mode of transport – expanding the market for leasing and private ownership of planes.

Apart from urban-based business leaders, politicians and wealthy deal-makers, Kenyan skies are also dominated by large-scale farmers and ranchers based in Nanyuki, Kitale, Laikipia and Narok.

The farmers mostly use their small aircraft to spray their crops.

“There is a spike which we can only attribute to increased demand for these equipment, which for us is good progress in the aviation sector,” KCAA Director-General Gilbert Kibe told the Business Daily in an interview Wednesday.

“These are mainly helicopters and small aircraft owned by individuals and low-cost local carriers since we do not register military and police airplanes.’’

Aero Club of East Africa – a lobby group of private aircraft owners – attributed the growth in the number of registered planes to Nairobi’s rising status as the region’s business hub and a growing number of wealthy individuals with the means to own and maintain an aircraft.

About 356 billionaires were living in Kenya in 2018, according to the Africa Wealth 2019 report published by Mauritius-based AfrAsia Bank, placing the country at number four in a ranking of top African cities based on super-wealthy persons.

The wealth report ranked South Africa top with 2,169 billionaires, Egypt (932) and Nigeria (531). These individuals have net assets above $10 million (Sh1 billion).

Nairobi accounted for 73 percent of Kenya’s billionaires, reflecting the capital city’s economic dominance over the other 46 devolved units created in 2013 to address the wealth imbalance. The heavy concentration of billionaires in Nairobi indicates inequality in the country’s economic development, which has partly been attributed to the previous centralised system of government that guided sharing of resources since independence.

When the devolved system of government was introduced in 2013, it raised hopes of addressing the economic imbalance, but analysts say there is a need to offer incentives to attract private investors to counties.

Besides convenience, wealthy individuals have also acquired aircraft to satisfy their ambitions for reliable and personalised travel.

Air operators say that the biggest headache in owing an aircraft lies in operational and maintenance costs, including high jet fuel prices, airport landing fees, parking fees, insurance and spare parts.

Wilson Airport in Nairobi handles about 90 percent of domestic flights that mainly comprise chartered and commercial flights to holiday destinations such as Maasai Mara, Game Reserve, Mombasa, Amboseli National Park, Lamu, Kilimanjaro, Diani, Lokichogio and Nanyuki. It is currently ranked among the busiest airports in terms of aircraft movement in East and Central Africa.

Last year, 15 aircraft parked at Wilson Airport were placed on auction after their owners abandoned them at the facility, which had already started experiencing space constraints forcing the Kenya Airports Authority (KAA) to declare them a safety risk.

In a notice to the owners, KAA gave them 30 days to remove the different aircraft models, including those used for commercial passenger services.

The planes comprised smaller models like the HS 748, a medium-sized turboprop airliner and Beechcraft Baron (BE200 and BE90 belonging Canadian Operator Knight Aviation mainly used for chartered flights by the rich going for holidays and short trips within the country.

The cost of running the aircraft are increasing with the regulations requiring that they be parked at gazetted points like Wilson Airport, which adds to the ownership bill.

Growth in the number of registered aircraft has also offered job openings for pilots, cabin crew and engineers. Several companies running charter flight services have recently moved to boost their fleet capacity to match growing demand on both domestic and international routes.

Kenya’s higher share of billionaires as well as the opulence reflected in the purchase of planes is not in tandem with the relatively hard economic times the country has experienced in the past three years and the resulting fall in corporate profits that has seen thousands of people lose their jobs.

Over the three years, Kenya has elevated political uncertainties following a bruising presidential election in 2017 that put on hold many investment decisions. This was compounded by poor weather that has held back farming — which accounts for a third of the country’s gross domestic product (GDP).

The Kenyan economy expanded by 6.3 percent last year compared to 4.9 percent in 2017 but the drought is forecast to cut it to 5.7 percent last year.

AfrAsia Bank reckons the significant share of Kenya’s super-wealthy has attracted dealers in luxury brands including car dealers, hotels and fashion products.

Our Source: https://kenyantribune.com/the-rich-crowd-skies-as-aircraft-numbers-double/

The Kenya Airways’s plans for direct flight to Tel-Aviv have been boosted after Israeli national carrier was given the green light to fly over Sudan airspace on Saturday.

KQ was to start nonstop flights between Kenya and Israel last year but the plans were dealt a blow after Sudan restricted the national carrier from using its airspace to Israel because of diplomatic differences between Tel-Aviv and Khartoum.

KQ chairman Michael Joseph said they are now reviewing the plansto introduce Tel-Aviv route following the latest development.

“We have noted some news about overfly rights and we will review our plans. I don’t know when we can start but we are evaluating the possibility,” said Mr Joseph in an interview with Shipping & Logistics.

The Kenya Airways was scheduled to start weekly flights to Tel Aviv in March this year but the plans appear to have been scuttled by political differences between Khartoum and Tel Aviv that saw Sudan impose blockade on flights going or moving out of Israel.

The airliner has to secure permission from the Sudanese government to allow the airline overfly its airspace.

The new development comes at a time when Uganda and Israel have agreed on direct flights between the two countries, in what is likely to heighten competition in the region once KQ embarks on that route. RwandAir already flies to Tel-Aviv.

Israel Prime Minister Benjamin Netanyahu visited Uganda this month for bilateral talks where he announced that his country was ready to start direct flight between Tel-Aviv and Entebbe.

RwandAir started direct flights to Tel-Aviv last year becoming the first airline from East Africa to make inroads in Israel as the Kenya Airways’ inaugural flight plan remained on ice.

The Rwanda airline commenced its three weekly flights to Israel in June last year operating Boeing 737-800 from its hub in Kigali.

KQ officials were in Israel in June last year where they met with the Israeli transportation minister Yisrael Katz to discuss the plan.

The airline had been given the green light to start direct flights to Israel only for Sudanese government to apply brakes. Mr Netanyahu said Israel airline flew over Sudan airspace on Saturday, terming the move as a milestone for the country. The move implies that the new Sudanese government is warming up to better relationship with Israel, following the ousting of Sudanese strongman Omar al-Bashir last year.

Tel Aviv has long been suspicious of Khartoum, which was traditionally seen as a close ally to Iran. But in 2017, Khartoum joined Sunni Bahrain and Saudi Arabia in severing its ties with the Islamic Republic.

KQ has been restructuring its network, opening new destinations, adding frequencies and shifting gateways as it seeks to offer passengers travelling between continents the best possible connectivity and the shortest routes.

Regional airlines have been pushing for open skies policy to allow national carriers to move without restrictions to other countries, but this is yet to be achieved. African nations have moved to protect their airlines from stiff competition, putting in doubt whether the dream of open sky policy will be achieved.

According to the World Bank, Africa is home to 12 percent of the world’s population, but it accounts for less than one per cent of the global air service market.

Part of the reason for Africa’s under-served status, according the World Bank study, is because many African countries are restricting their air services markets to protect the share held by state-owned air carriers.

Our Source: https://www.businessdailyafrica.com/corporate/shipping/Direct-KQ-flights-to-Tel-Aviv/4003122-5460414-68evepz/index.html

Budget carrier Jambojet has frozen plans to fly to Mogadishu after Somali authorities failed to grant the airline a morning landing slot.

The carrier planned to depart Jomo Kenyatta International Airport at 6am and fly back to Nairobi at 9.25am to allow the aircraft to be deployed on other local routes in Kenya.

The move to start Somali flights follows increased demand on the route as the airline stretches its wings in a move expected to boost trade with the Horn of Africa nation.

“We have put the plans on hold as we review whether the route will fit within our current operations. We will advise once we have a way forward,” said Allan Kilavuka, chief executive Jambojet.

The carrier said it was denied the morning slot as Somali authorities claimed there was a lot of traffic during that period.

Jambojet was to start flights to Mogadishu last year in November but the plans were put on ice with the launch date pushed to March. The budget airline has been on an expansion spree and recently expanded its fleet with two brand new De Havilland Dash 8 – 400. The no-frills carrier, founded by Kenya Airways five years ago, ferries more than 700,000 passengers a year within Kenya and to neighboring Uganda after an aggressive expansion aimed at first time flyers who would normally take a bus.

Like budget carriers in Europe and South Africa, Jambojet passengers only pay for seats.

The airline charges extra for services such as baggage and meals, allowing ticket prices to compete with buses and trains.

It had planned to charge Sh24, 470 for one way route to Mogadishu. It now flies to two international destinations that include Entebbe and Kigali. The carrier also plans to expand to South Sudan, Tanzania, the Democratic Republic of Congo, Comoros and Malawi.

KCAA previously granted the low-cost airline a three-year licence to fly to Addis Ababa, Dar-es-Salaam, Zanzibar, Kilimanjaro, Mwanza, Kigali, Juba, Hargeisa, Mogadishu, Goma, Kisangani (DRC), Moroni (Comoros) and Lilongwe.

https://www.businessdailyafrica.com/corporate/companies/Jambojet-Mogadishu-flights/4003102-5460640-qf9m5k/index.html

Trade between China and Kenya has been dealt a further blow after the suspension of the only remaining direct flights between the Asian country and Nairobi amid fears of the spread of the novel coronavirus, which had by Sunday infected 37,198 people in China alone.

China Southern Airlines has cancelled all its four weekly direct flights only 10 days after Kenya Airways halted direct flights into Guangzhou, China. This came against the backdrop of reports that 2,600 new cases had been reported by Sunday.

China Southern Airlines has also frozen travel reservations on the carrier till end of June. The outbreak of the deadly coronavirus in China has resulted in travel restrictions into and within the Asian giant. By Friday the death toll in mainland China reached 637.

Following the service changes, the Chinese airline will stop the two weekly Nairobi-Changsha service, a route it launched in June last year on the back of increased travel demands from China into Africa. The airline operated the weekly service on Sundays and Wednesdays. The airline is also set to stop the Monday and Friday direct flights on the Nairobi-Guangzhou route.

“The last Changsha flight will be on February 9 (Sunday) and the Guangzhou will be on February 10 (Monday) and this changes will last up to March 28,” said the airlines marketing manager, Belinda Agwena. “The cancellation of the flights has largely been driven by the need to combat coronavirus.”

Passengers will have the option of using airlines with connecting hubs in Africa, the Middle East and Asia to travel to Kenya or China.

The decision by China Southern Airlines and KQ follows the decision by a host of other airlines to suspend or reduce flights frequency into China.

Air Canada, American Airlines, Air Asia, Japan Airlines, British Airways and Qatar Airways are among the more than 20 major airlines that have suspended flights to and from China.

The cancellation of the direct flights is set to further escalate supply chain disruptions from the lockdown of the “world’s factory”. Coronavirus has also seen China order the closure of most of the factories in the affected regions, a move that is also impacting on trade in Kenya.

Last week, vendors reported delays as the Chinese suppliers blamed the lockdown for delayed delivery of the items.

Over the last decade, China has grown to become Kenya’s largest trade partner and biggest bilateral lender with imports value hitting Sh324.9 billion in 2019.

Parcel and logistics firm, China Post’s Express Mail Service (EMS), whose service coverage extends to Kenya and 219 other countries across the globe, warned its customers to expect late deliveries owing to delays in transportation as it strived to meet safety measures.

Chinese e-commerce Kilimall said it would delay orders, although it attributed this to the Lunar New Year festivities, which were extended to contain the spread of the virus.

The World Health Organisation (WHO) has pledged to convene a global research and innovation forum next week to mobilise international efforts to combat the viral disease.

Our Source: https://www.businessdailyafrica.com/economy/Chinese-airline-suspends-direct-Nairobi-flights-/3946234-5450112-format-xhtml-r50txmz/index.html

Digitalization has revolutionized the way airline products and services are merchandised, marketed, and distributed. Today, airlines and travel agencies have improved tools to sell and distribute their products to tech-savvy consumers, delivering on the industry’s promise of a modern and personalized flight shopping experience.

Recent retailing agreements have given a new lease on life to the airfare clearinghouse. “The immediate impact of the deals is that it’s a flashing signal to the industry that airlines have finally reached an inflection point in how they distribute airfares and related products and services,” said Sean O’Neill, travel tech editor for Skift.

These modernization efforts are further supported by IATA’s New Distribution Capability (NDC) program and ATPCO’s Next Generation Storefront (NGS) which play a critical role in ensuring that airlines and agency systems can seamlessly interface, ensuring agencies will soon be able to widely provide differentiated, rich content and competitive offers to their travelers.

But despite all the progress that’s been made to transform the airline digital retailing space on the customer-facing side, a looming problem threatens to limit the potential benefits of this innovation for travel agencies. That’s because the back-office business processes surrounding incentive programs supporting this new digitized airfare retailing and merchandising model remain surprisingly analog. In fact, many travel agencies still rely on spreadsheets and manual entry of transactions, limiting their ability to monitor revenue and impacting profitability.

Why is this analog record-keeping process such a problem in this new era of digital retailing? And what solutions might travel agencies use to address it?

Many travel agencies thrive on a combination of commissions and incentive offerings when selling airfare, and in some cases, this can be up to seven times more than what an agency may make via fees from clients. Airlines’ sales incentives based on sales targets or market share growth are also one of the primary vehicles for travel resellers to obtain this revenue. For travel agencies, these incentives are important and can have a considerable impact on their profit margins on an annual basis.

These programs also often include collateral support in the form of funding for marketing, along with access to special flight amenities like preferred/priority access, upgrades, waivers, and favors. In fact, these programs are a key component in helping most travel agencies keep their fees and charges to clients and companies at reasonable rates.

Here’s an example of how the incentive process between an airline and agency works: A travel agency might have an incentive agreement with the airline that provides a payout of two percent of sales and access to marketing support if their overall revenue target of $5 million in tickets is achieved over the course of a calendar year.

With the right tools to monitor progress toward this $5 million goal, the agency can continuously reassess throughout the year, making small but timely changes to ensure it hits the goal. This might include internally increasing the visibility of products that count toward their revenue target, or running promotional campaigns with current and prospective clients as well as employees.

Unfortunately, the travel agencies’ current process for monitoring their progress relies on spreadsheets and paper forms, a largely manual system that does not update with new information in real-time. This makes it even more challenging for travel agencies to effectively track and monitor their performance toward goals.

The challenge of keeping track intensifies as carrier-agent programs become increasingly complex, with airlines incentivizing different types of products at varying levels, and more so with the rise in ancillary sales. Different push actions related specific RBDs (the reservation booking designators or booking classes), or market share and annual or quarterly targets, are helping to make contracts more dynamic and flexible. But travel agencies continue to work with decentralized and disparate systems and processes with limited capabilities to track target reach or measure performance in a timely and efficient manner.

“Tracking airlines’ sales incentives today is not only hard, it’s virtually impossible – a travel agency typically gets hundreds of varying terms across agreements from tens of airlines, each with a different structure, conditions, dates, numbers and RBDs. This also changes from the different types of agencies between the TMCs and OTAs,” said Mickey Haslavsky, CEO of Avian, a software solution provider.

It is ironic that at the moment when the consumer airline distribution marketplace is undergoing a massive revitalization, the travel agency methods, technology, and systems which drive and support this revitalization feel frozen in time. At best, agencies may receive digital reports from some airlines. Even then, they must visit different portals and attempt to compare conflicting programs. With new standards on how performance is calculated and measured across carriers, this can be very challenging.

Haslavsky said: “Some still adhere to gigantic excel sheets and manage everything themselves without having any proper system or hub to capture accurate data. Technology has been widely accepted in nearly all aspects of the travel industry with regards to client facing interactions. However, it has been very neglected with regards to internal agency usage for managing incentive programs. By the end of the day, no matter how many excel sheets you have, tracking flown and market share incentive plans requires technology.

One firm helping to change this travel agency status quo is Avian, a technology company that provides new incentive contracts analysis technology to allow travel agencies greater insight and control over their incentive contracts with airlines.

The online software platform allows travel agencies to easily scan airline incentive agreements by means of a simple drag-and-drop experience with no manual filing. It also connects agents to the BSP (IATA’s Billing Settlement Plan), ARC (Airlines Reporting Corporation), and the GDSs (Global Distribution System), making it faster and easier to get a real-time overview of their revenue and performance from airfare commission and incentive programs.

This solution also makes it easier for travel agencies to forecast complicated calculations like the company’s flown revenue (a net revenue from consumers who bought their tickets from a travel agency, got on board, and actually flew). Flown revenue is recognized as a key metric to manage performance versus program targets in a timely manner. Yet tracking flown revenue using manual calculation methods is often cumbersome, highly inaccurate, time-intensive and costly.

Haslavsky said: “The flown data is processed via revenue accounting standards, stored in an airline’s database, and filtered per travel agency, so it takes time for the airline (from 15 to 90 days) to update the agency on their true performance. Even when airlines do provide reporting, agencies must process each one individually to get a holistic view of performance across their business.”

In the old analog model, critical performance data never reached the travel agency in time, leaving them unable to make meaningful pricing or marketing decisions based on the insights. This forced many agents to rely on guesswork to determine whether they would hit or miss their sales targets. With incentives being such an integral part of their agency revenue, it’s surprising that this process remained unchanged until now.

But now, new digitized incentive tracking solutions like Avian are helping travel agencies optimize the process they use to track flown revenue in real-time and manage contract variables. Best of all, AI algorithms like those developed by Avian can go one step further, helping recommend strategies agencies can use to further improve revenues from incentives and increase profits.

“The system allows them to pinpoint specific sales targets, track performance, and steer sales into an upward curve by making sales predictions and our API will allow any OTA and TMC to optimize their revenue from incentives and commissions,” Haslavsky said.

“It is often difficult to keep track and organize this vital piece of our business and Avian has been a tremendous help with this. They have made back-end and upfront incentives tracking sync with their unique software. It lets us know exactly when and what we need to know relating to any of our contracts at any time with a few clicks of the mouse,” said Steven Borukhin, chief business development officer of DownTown Travel.

“This technology brings real innovation into the airline-agency relations by applying the idea of a free marketplace to the formerly exclusively bilateral field of commercial agreements,” said Ondrej Cikanek, vice president of content at Kiwi.com.

The software can also help agencies gain new insights into their supplier relationships and ROI/negotiations for airfare sales. Avian does this by presenting all airline incentive plans in one place with a standard format to compile their different terms and conditions. Having a centralized and consistent view of these plans’ terms will help travel agencies better monitor their different revenue streams, reach their sales targets, and increase profit margins.

With digitalization transforming the airline distribution landscape, Haslavsky said Avian aims to bring deep technology into revenue optimization for travel agencies to ensure that agreements are optimized and their business continues to meet the challenges of the ongoing digital transformation.

Our Source: https://skift.com/2020/01/21/how-travel-agencies-can-maximize-commissions-and-boost-profitability-in-a-new-era-of-airfare-retailing/