Connecting with the customer: How airlines must adapt their distribution business model

Global trends are reshaping travel distribution industry: consumers are increasingly using online channels and multiple devices for search and booking, and social media to seek and provide travel recommendations. Mobile is increasingly important, especially in emerging markets. Changing dynamics within direct and indirect sales channels (online travel agents, traditional travel agents and travel management companies) offer opportunities and pitfalls for airlines.

Airlines should undertake three major initiatives within a holistic distribution strategy enabled by technology. They must:

1. Transform their travel distribution model in direct and indirect channels;
2. Pursue closer partnerships with channel, content and technology players; and
3. Enhance internal capabilities (operating model, processes, skills and technology) to capture the opportunities of the new trends and be centered on customers in their organiztional setup.

In particular, airlines must adeptly manage digital innovation and use these technologies to improve areas of the business such as direct channel sales, marketing, cross-selling, dynamic pricing and inventory management.

To learn more, download the latest Strategy& paper titled "Connecting with the customer: How airlines must adapt their distribution business model".