The Coming Era of Modular and Innovative Delivery

Airline delivery systems are the backbone of an airline’s airport management operations, encompassing a range of processes from passenger check-in to aircraft departure. These systems, known as Departure Control Systems (DCS), automate critical tasks such as managing check-in information, printing boarding passes, baggage acceptance, boarding procedures, load control, and aircraft checks. By integrating with an airline’s inventory system, DCSs ensure real-time notifications and seamless coordination of passenger handling and ground operations, ultimately aiming to streamline the customer experience and ensure timely, safe departures.

However, the current landscape of these systems presents significant business challenges. Departure Control Systems are often developed and sold as monolithic blocks of functionality, designed primarily to “get the job done” with a focus on operational efficiency, reliability, and safety. This utilitarian approach, while effective in achieving operational goals, limits the potential for innovation and modularity. Consequently, there is less opportunity for new entrants to introduce innovative solutions that could enhance customer experience and operational flexibility, leaving airlines reliant on traditional, rigid systems.

We think this situation will begin to change for the better as the IATA ONE Order standard takes hold in the industry over the next decade.

IATA’s ONE Order Will Build Upon Modularity Concepts Which Already Exist

It helps that the industry already has precedents to illustrate the difference between how monolithic and modular delivery systems operate.

In a monolithic system, the airline’s internal reservations system and delivery system are tightly integrated and provided by the same vendor. This setup can limit flexibility and innovation because all components must work within the constraints of a single provider’s ecosystem.

In contrast, modular systems separate the airline’s internal reservations system from the delivery system. This is often seen in airport operations where third-party contractors, known as ground handlers, use a different delivery system than the airline’s internal reservations system. This separation allows for more flexibility and innovation, as different components can be sourced from various providers, creating a more competitive and dynamic market.

The IATA ONE Order messaging standard aims to further this modular approach by creating a standardised messaging infrastructure. This will enable airlines to seamlessly integrate various systems from different providers, enhancing flexibility and innovation in airline operations. By adopting the ONE Order standard, airlines can move towards a more modular and innovative system, similar to the ground handler approach, but on a broader scale.

Before & After Modularity: The Example of Upgrade Lists

Airlines face a delicate balancing act between rewarding loyal frequent flyers and maximising revenue. Complimentary upgrades build customer loyalty by making elite members feel appreciated. In contrast, selling upgrades generates additional revenue by monetising premium seats. Airlines must weigh these factors while adhering to published policies and operational efficiency. This delicate balancing act manifests itself in business rules which delineate between which seats will be sold versus offered for free to frequent flyers and, as to latter, which flyers will be given highest priority based upon a variety of factors.

In the world of monolithic delivery systems, these business rules are often implemented in inconsistent ways which cause customer confusion and dissatisfaction. Customers have learned that an airline’s business rules can sometimes differ prior to the check-in window versus at the airport. A customer which may have narrowly missed a complementary upgrade 100 hours from departure may find themselves buried deep on the airport priority list. The reason?  Monolithic airline delivery systems are designed for operational efficiency and thus often consume only the minimum amount of customer information required to verify customer identity, issue boarding passes, and record boarding status. They then apply their separate, self-contained, limited prioritisation logic for standby and upgrade lists based upon the information available.

Though an airline can in theory request that its delivery system be upgraded to consume more customer information and introduce more nuances in its prioritisation logic, a fatal flaw remains. These are systems changes which must be performed twice, often at great expense each time the logic is modified, and sometimes with residual inconsistencies. This type of architecture is out of step with the future of airline systems overall, which we expect will be more customer-centric, streamlined, and optimised for revenue generation in addition to operational efficiency, reliability, and safety.

In a modular world, airlines can implement flexible, customer-centric systems that seamlessly integrate various data sources and business rules. These systems can dynamically adjust prioritisation logic based on real-time customer information, ensuring consistency and transparency across all touchpoints. By leveraging modular architecture, airlines can enhance both operational efficiency and customer satisfaction, ultimately driving higher revenue and loyalty. In the case of upgrade lists, that means each modular component of an airline’s delivery systems could rely upon a centralised, consistent set of customer prioritisation business logic in addition to the order management system as the master record of what is to be delivered.

In conclusion, the transition to modular delivery systems in connection with the implementation of the IATA ONE Order standard is poised to unlock a new era of innovation in the airline industry. By embracing modularity of airline delivery systems, airlines can integrate cutting-edge technology that enhances both operational efficiency and customer experience. This shift will enable more agile and responsive systems to enter the market, allowing airlines to adapt quickly to changing market demands and customer preferences. As a result, airlines will not only improve their service offerings but also drive higher revenue and loyalty through more personalised and efficient operations. The future of airline systems lies in this modular approach, paving the way for a more dynamic and innovative industry landscape.