The distribution of pricing content over the last 10 years has changed dramatically. So has ATPCO, says Beth Taylor.
ATPCO, the airline pricing, content, and data distributor, has come a long way since it was founded 54 years ago as the Airline Tariff Publishing Company. And so has the commercial airline business.
The last two years have brought considerable change for the Dulles, VA.-based company, especially considering its Feb. 2018 acquisition – so far, its only purchase – of Routehappy, which provides interactive, real-time images and data that promote airline merchandising.
The advances that ATPCO has made on its own and with the addition of Routehappy were on full display at last month’s two-day Elevate 2019 conference. The expansion of ATPCO’s Next Generation Storefront and its adoption of dynamic pricing were designed to address commercial aviation’s need for more up-to-date retailing strategies and the adoption of real-time pricing for bookings and passenger amenities.
We caught up with Beth Taylor, ATPCO’s head of marketing, to discuss the evolution of ATPCO and its products, including the NDC Exchange, which was created by ATPCO and SITA that enables API connectivity between airlines and sellers using New Distribution Capability (NDC), an XML-based data transmission standard set by global aviation industry trade group IATA.
Taylor joined ATPCO three years ago. She was previously Global Advisor & Senior Manager for Content Strategy and Cloud Marketing art IBM.
Kambr Media: Traditionally, it seems ATPCO was where airlines would file prices that were static and transparent. In an emerging/future world where airlines set prices dynamically, for both base fares and ancillary products as well, how does that change ATPCO's data exchanges, process for adding value, and ultimately the organization's role in the commercial transactional flow?
Beth Taylor: The core of ATPCO has traditionally been focused on the collection and distribution of pricing data. The business model is one of industry efficiency and value creation – so that any airline in the world can have a one-to-many relationship with any channel that wants to consume their content – mostly to sell tickets on flights, but sometimes to scale their content across academia, governments, technology providers etc.. We have served as a neutral platform where both airlines and channels know that they are going to capitalize on the network economics of our model, while getting unparalleled reliability in data distribution.
I’ve had a lot of conversations with our board members. I’ve asked them off the wall questions like, “Okay. What happens if we cease to exist tomorrow?” They all say things like, “I would retire. Tickets would stop being sold. It would be mass chaos.” We’ve greatly reduced the complexity required for all airlines to get to any channel.
It reminds me of a Swiss watch: we’ve been a tiny but critical cog that no one talks about but makes the system work as it exists today.
Can you explain that critical role that ATPCO plays today for airlines?
The distribution of pricing content over the last 10 years has changed dramatically. To keep pace, we started to expand that capability to include the growth in ancillary content. And now, it’s about the growth and expansion of full retailing content, which brings in much more than price. Simply put, as passenger volumes grow and consumer expectations change, we are changing too – to ensure everyone from revenue management executives to digital to marketing to distribution teams are able to work together to showcase their product effectively and deliver information that lets fliers make informed decisions.
We are evolving based on the neutral leadership that this industry is looking for. As part of the next generation of offers, it's not just about ticket pricing. It's not about the commoditization of the air travel ticket. How do you create and connect experiences, individual preferences, and seat attributes which people have different levels of value for? That's more than a price.
ATPCO still sits at the center of distribution as a critical and reliable infrastructure, but we have expanded our scope to things like retailing, dynamic pricing and offer management, NDC Exchange and retailing data standards like Next Generation Storefront -- as we see that is where the industry needs and wants us to go.
How has your own role evolved?
I joined ATPCO when Rolf [Purzer] was first promoted to CEO in 2017. I was his first hire among the now 50 percent or so of new senior leaders at the company. So, I was at the tip of the spear in terms of ATPCO’s transformational efforts. About a year prior to the acquisition of Routehappy. It’s been awesome to be a driving force behind our current momentum -- to see the speed at which this company's moving, but also the speed at which the entire industry is waking up, it is pretty inspiring.
Prior to being in air travel, I was at IBM, focused on positioning our cloud and infrastructure products across industry verticals – leaning into transformational market topics tied to big data, machine learning, blockchain, etc. Coming into the airline industry, I was looking at it from the technology side of things, vs an industry perspective. I knew IBM had a lot of entrenched relationships with airlines from the mainframe days, so it's just been very interesting to see the differences in how everyone in the industry is looking to apply next-gen tech to advance their positioning. I’ve noticed differences based on how big the airline is, how complex some of the relationships are, etc.
How has the acquisition of Routehappy 18 months ago factored into new or improved ways for travelers to shop?
ATPCO and Routehappy may have looked different from the outside but we had more in common than you might expect. We were both driven by an industry-serving and an industry-leading mission. We were both experts in the flight shopping content that makes fliers understand elements of value they get from the product – pricing and retailing data that makes them informed and happier shoppers.
In a way, Routehappy approached it from the other end of retail from pricing. For Routehappy, the premise is “How do we help you communicate the full product experience in an authentic and richer way so the end consumer knows what their buying, tied to the actual product?”
So, it's not crowdsourced. It goes back to reliability, depth and breadth. You know what you're getting – we have the primary data that represents the actual product.
This matters; for example, on the pricing side, there's no shortage of screen scrapers and companies that collect second-hand pricing data from multiple sources and then reposition it. I give a lot of credit to our board and to airlines in general for recognizing that we needed an industry source for rich content so that it didn't become owned by third parties, those who don’t fully know or aren’t invested in what the complete products are.
So the message is: “You will know that what you’re buying is true to form because we’re airline-owned, which means we're getting the primary data straight from the source.”
And if you’re going to innovate, wouldn’t you rather build your idea using primary data?
I'll never forget when went I first went up to New York to talk to [Routehappy CEO Robert Albert] and I said to him - I get it: “It's price meets picture, right?” We made sense together.
Like any good CEO, Robert responded, “It is way more intricate than that. We're not just pictures.” But from a layman's perspective, images are such a valued thing. There's a metaphor that he's used: “You can go on homedepot.com and see more about a 10 cent nail than you can a $10,000 business class seat.”
You can rotate that nail on Home Depot’s website. You can see exactly what the specs are. You just don't have that visibility when it comes to an airline product, but we're getting there.
That’s the basis of bringing these two companies together. The mission is not about filing fares. The mission is about being a neutral platform for airlines and channels to connect through, to be the foundation of flight shopping.
I think Bob’s Home Depot’s online product display is notable. In what specific ways does Routehappy provide that level of detail to airline products?
There are three core features to our rich content portfolio: Universal Product Attributes (UPAs), Universal Ticket Attribute (UTAs), and Amenities.
These features address the main components to any fare that is sold. UPAs bring unique airline products and services to life through photos, graphics, videos, captions and descriptions. UTAs clearly show the fare’s restrictions and benefits, such as boarding priority, how many bags can you check, what's the cancellation policy, seat selection and more. We can showcase this with a quick icon and a few words that describe what you're looking at. It’s an easy glance instead of having to look at 11 pages that you used to get when it came to knowing your key benefits and restrictions to the fare that you're buying. Lastly, Amenities highlight key features of your flight from aircraft type, layout, seat type, entertainment, Wi-Fi, power, fresh food, beverages, so shoppers can see what Amenities will be on the actual flight they are purchasing.
What’s ATPCO’s view of the emergence of dynamic pricing for airlines?
Two years ago, ATPCO did some pretty deep research discovery with the PODS Consortium run out of MIT. As mentioned, I used to lead marketing in the cloud computing space. This moment for dynamic pricing and dynamic offer creation reminds me of the very early days when people were asking, “What is the public cloud, what is the private cloud? What is a hybrid cloud?” Cloud was still forming as a set of definitions, which eventually required interoperable solutions, similar to what the flavors of dynamic pricing look like.
It’s everything from that first initial step out of static fare filing, all the way to fully personalized, continuous bundling. It's not a one or the other. It's not black or white, there are different stage gates that any airline can choose, based on what their unique strategy is.
Since publishing the PODS paper, we've been doing a lot of work to educate and to identify what the industry needs from us as pricing, ancillaries, and bundled offers become dynamic – what industry standards, expertise, or infrastructure is needed to support it?
The same way that we have built much of the underpinning to today's pricing logic, we’ve asked what needs to exist to allow dynamic offers to get to market in a way that ensures offer integrity. How can we support the collection, distribution, and settlement of offers in a neutral way that provides industry value? That might cover offer-to-order, so that you have transparency into what sells and what's booked. Those concepts are being worked on in our R&D team today. How do you back in from what would be the filing of 10,000 fares into a single offer?
It’s an exciting place to be at right now. At our Elevate conference earlier this month we unveiled a simplified model for dynamic pricing that reduces the barrier to entry for airlines, the model is made up of three different approaches beyond static fares. We will be moving fast on helping our customers get up and running with the approach that works for them.
How has ATPCO continued to develop its Next-Generation Storefront standards?
It’s been quite the sprint for us over the last 12 months, we only unveiled the intent to develop the standard at our Elevate 2018 conference and now in less than 12 months, we have a finalized U.S. Domestic Standard ready. I’ve never seen a standards initiative move at this pace in our industry. We’ve done so through a test and learn approach to industry collaboration. Some of it speaks to the appetite at which the industry is willing to move to advance flight shopping.
We are not creating this standard in a vacuum – many airlines, channels, and partners are deeply involved in developing it – so it can benefit all. We hosted numerous working groups with the industry this year as part of NGS development. We have input from over 62 organizations to date. And, we just announced NGS is expanding globally, forming new advisory boards for four international markets – Asia Pacific, Transatlantic, Transpacific, and Canada Domestic, with members of the new advisory boards including Ctrip.com, Air China, British Airways, Virgin Atlantic, Skyscanner, and CWT along with American Airlines and Delta Air Lines.
How does ATPCO work with IATA’S New Distribution Capability? Does it have a formal part in shaping ATPCO’s NDC Exchange?
Very early on, about 8 years ago, we donated the Open Axis schema to IATA. That’s what led to the creation of the standard model. We've been extremely supportive of IATA’s development of the NDC standard and have continued to look at ways to help airlines adopt it more quickly.
Our leading product in the space, NDC Exchange, was actually a product that we built as a result of an RFP from IATA. That's an example where we work very closely to support one another. We're on each other's standards boards, we both look to create industry value for the entire ecosystem, and we've got close relationships there that help benefit our industry stakeholders.
What is NDC Exchange and how does it work?
As far as NDC Exchange goes, it's really about helping airlines get up and running quickly and get connected to their preferred channel partners with less investment in development.
Instead of having airlines to attempt to establish their NDC connections with each partner individually and maintain different schemas and versions, the Exchange does it for you. You don't have to upgrade your technology to keep up with every new NDC schema – we do that for you.
We've actually seen quite a big uptake. We launched it a couple years ago. We now have 85 airlines and channels that are in various stages of onboarding, with 25 of those who are major airlines and channels now connected and or live and nearly production-ready. I don't think IATA expected NDC to take as long as it has. But, I use my experience in tech when AWS was disrupting cloud to say, it takes many partners and advocates to help people move forward in totality – to support interoperability along the curve - from early to late adopters. Airlines and channels have to be convinced that if there's an investment needed to modernize to NDC, that there will be a material, long-term benefit that offsets the initial investment.
Working closely with the industry on adopting NDC, we identified fundamental technology gaps that prevent many airlines and channels from implementing NDC at their desired speed and cost. We are now working on developing NDC services that will help the industry to implement NDC faster. As part of this NDC Exchange is transforming from a product that offers connectivity and translations to a full platform that adds layers of additional capabilities that can be easily bundled with other offerings.
The word interoperability cannot be stressed enough. We are able to keep existing systems running while they dip their foot into new NDC technology. We support all airlines, whether they’re going to go full in, or even if they're just going to test it.
What’s the process like for airlines joining the NDC Exchange?
It’s really being a marketplace that connects airlines to their channel partners together, that takes the legwork out of these companies having to connect to multiple different versions, schemas that otherwise could take close to a year. As an example, AmTrav was able to connect to Southwest through NDC Exchange in under a month, which is extremely quick. It’s nearly unheard of and that speed to market is an important part of our value here.
As airlines get more and more revenue from ancillary customer services aside from fares, how does ATPCO factor those dollars into its system? If not, does ATPCO plan to incorporate more of the fees airlines charge fliers into its systems?
We've been involved in the merchandising of ancillaries both as revenue drivers, and also to meet consumer's evolving expectations for flight shopping. Most recently with the acquisition of Routehappy, we’ve been focused in how we bring the pricing and the visualization of products together.
The interesting thing is as you go into the mode of thinking about the total offer and total product, ancillaries simply become part of the experience. They are not seen as a separate thing. I think consumers are tired of that separation.
One of the hypotheses I have is that the attributes that are typically designated as an ancillary cost, like a bag check in or seat selection, will seamlessly be integrated into the total product. With programs like NGS that help with comparison shopping in the display, we are ultimately empowering the consumer the option to select what attributes they care about the most and then quickly visualize it. It allows them to learn a lot more about what ancillaries are as part of their total experience. In the end, by packaging ancillaries as integrated in the total product, we could motivate a consumer to book based on emotion vs rationalized add-ons.
People book a flight for different reasons. One of the things we have been learning very quickly through NGS is that it's not all about the seat. Yes, the seat is one of the more important attributes for many fliers. But there are a lot of emotional attributes like the type of a wine or food selection or there's craft beer on a particular flight. Having transparency into the cost of a flight can bring those ancillary products to life, even the ticket attributes themselves, knowing you can sit with your family on a flight and can choose your seats together, are important purchasing decisions we are empowering consumers to make.
That's evolved with Routehappy under our amenities data, which focuses on eight key features that consumers care about the most and our UTA product.
In addition to caring about the food being serviced, wi-fi is one of the most important amenities people want on a flight. Five years ago, consumers wanted to know if a flight has wi-fi or not. Now they want to know what kind of wi-fi is available. Is it streaming capable or is it 2G? Is it ground to air? All of that makes that wi-fi experience very different.
That is one thing that our position benefits us -- we're in a position to say, “How can we empower meaningful comparable experiences? How do we enable channels and ultimately the end consumer to be able to compare like for like,? And what are the actual product definitions – what does the full product experience look like.”
What’s your sense of the travel agency business and how ATPCO serves that segment of the industry’s needs at a time when booking tools like Expedia and Hopper are fairly well established for travelers?
Online travel agencies are one of the fastest growing areas of our major data subscriptions.
We have a number of very large brands that buy or engage with us for full data. Most of those brands are OTAs, like Expedia, which is one of our most valued customers.
We've talked to Hopper extensively as well, and they're doing experiments with NGS. They have a big seat at the table. We're not in it for one system tor one channel to be more successful than the other, like meta versus a travel agency versus system, etc. We are neutral by design and in it for all to benefit in the way that works best for their business.
One of the nice things that's been a really big differentiator for us now that ATPCO and Routehappy are fully integrated has been, there was this perception that ATPCO existed just for airlines. And that's not entirely true. I understand the perception, because ATPCO is an airline-owned company, and airlines make up our board. But ATPCO does a phenomenal amount of work with channels as well.
Routehappy, alternatively, served both airlines and channels, too – but maybe had more early demand from the channels than from airlines. And, we both know, it is sometimes difficult to connect airlines and channels together.
As ATPCO and Routehappy have become one, our entrenched relationships on both sides have become a multiplier for us. I've talked with board members and senior executives that are in travel agencies, they've said to us, “You guys are in a very unique position to help airlines and channels get connected.”
With the Routehappy value prop and its relationships with sales channels, we can actually bring all sides together more quickly, using ATPCO as a neutral platform for those conversations. Ultimately channels need this content in order to improve their flight shopping experience, and airlines want to make sure their tickets are available to be sold wherever their buyers shop.