[Music]
i'm shannon gibson and i'm the dean of
the david b o'malley college of business
and welcome to this afternoon's webinar
where i am pleased to welcome a host of
executives from across the aviation
industry
if you're joining us i know that you're
excited to learn more about the process
of ticketing from these individuals and
i know they've got a lot to teach us
please feel free to put questions in the
q a box that you see at the bottom of
your screen
and our guest will answer questions as
they go
without further ado i'd like to turn
over the panel to mr glenn barcesky an
alumnus of embry riddle to conduct the
panel thank you everyone welcome guest
we're glad to have you here
thank you gibson um it's a pleasure to
be here and i get to talk about a topic
that's very near and dear to me and
that's airline distribution so just real
quickly about me i i'm an embry-riddle
grad twice i did my bachelor's in in
daytona beach and my mba here in miami
i've spent most of my professional
career at amadeus and in the last 10
years specifically in airline
distribution sales
so if you're not familiar with amadeus
we operate a gds a global distribution
system and what that is is we aggregate
content from air car hotel
rail insurance companies and we make
that all available to travel agents all
around the world to make a booking
obviously i'm focused on the air aspect
i use the term travel agent a little
generically because travel agents do
come in a lot of different flavors but
they're the ones typically that are
making bookings and uh we'll talk about
that a little bit more
the other part of amadeus is
we host the airlines reservation systems
we have two platforms one is altea
and that is typically for a more of a
full service carrier and there's about
150 airlines using altea like southwest
here in the us air france klm liberia
british airways qantas etc we also
operate the navitare platform which is
really geared for the low-cost carrier
and we have such carriers as spirit
frontier
um
sun country here in the us and swoop in
canada
so today we'd like to talk about airline
distribution and what is that
so
it's a broad topic and we only have an
hour so to keep it very high level and
to give you a sense of what it is it's
really reaching the right customer at
the right place at the right price
and so
for that we want to talk a little bit
about what distribution is and how
different airlines approach
the distribution process and so some
people may say well that's how do you
sell an airline ticket but it's really
getting the product out to the consumer
so in distribution we tend to think of
it as either being direct or indirect so
as the name implies direct an airline
has their website that's their
opportunity to sell their products
and services directly to the consumer so
we have two airlines with us today
spirit airlines and westjet both of them
have a website as you can imagine and
that's their opportunity to sell
but a direct channel could also be an
ato or a cto an airline ticket office or
a city ticket office city tickets
offices are not that common today but
they still do exist and some airlines do
have them in some key cities and that's
another direct channel
and and finally there's a call center
yes you can still call an airline and
you can make a booking and they still
exist so those are the direct channels
when we talk about indirect that's
typically done through a travel agent
and as i said that that's a generic term
travel agents come in lots of different
flavors they can be online or offline
and today we have
one of the largest if not the largest
online travel agent expedia with us and
we'll talk about
we'll hear how they factor into the
airline distribution ecosystem
so travel agents can also be a tour
operator they can be a wholesaler they
can be a tmc a travel management company
where they're focused on booking
corporate travel which is a very
important sector for a lot of airlines
so
travel has changed a lot the technology
has changed a lot
and certainly when it comes to
distribution there's a lot more
technology involved in selling an
airline ticket and one of the players
that has changed the way airlines were
helping airlines to change the way they
market and
merchandise their products is cecelia
and we'll hear from them as well and to
see what they're doing in this
distribution space
i'm sure that a lot of you students out
there if you're at amber riddle you've
probably taken your marketing course
and you've probably heard about the five
ps of marketing product price place
promotion and people
and so a lot of that really applies in
distribution as well
there are different
distribution strategies for different
airline products some airlines have one
cabin they're all economy and there's a
certain strategy on how you distribute
those products versus a carrier that may
have a first class business class
premium economy
and and so forth there's different
strategies for each of those different
products
certainly price is a is a huge factor
and not all airlines want to sell the
same um price product in the same
channels so the price of the product
sometimes will dictate what the strategy
is and distribution
the place
is certainly an important factor
not every airline sells every product
and every place we have online we have
offline we have direct and indirect and
an airline has to determine where do
they want their products to be and they
may have certain products or certain
fares and one
place but not in another in another
so that is certainly a big factor
we have promotion so that could be uh it
could be a lot of things that could be
related to a loyalty program it could be
related to online advertising web fares
uh a coupon that gets blasted out on
twitter or something and so an airline
also needs to think that if they're
going to have some type of promotion how
do they factor that into their
distribution planning how do they
operationalize that
and then finally we have our people
nothing gets done without people and so
an airline needs to determine who are
the people that will help
implement their distribution strategy
oftentimes we see the distribution team
within an airline they're usually part
of the sales and marketing team
sometimes they're part of e-commerce
team sometimes they're part of the i.t
department so it all depends on the
airline um but anyone has to identify
who is going to be responsible
for the distribution strategy
so
there's certainly a lot of different
topics um within distribution that we
could we could talk about but in an
hour's time um i would like you now to
hear from two different airlines who
have two different strategies they're
two different strategy or two different
airlines and so of course they require
different strategies for distribution
and then as i said we'll hear from
expedia
a
a huge online player and then lastly an
i.t
provider a celia
so with that i'd like to turn it over to
our first airline westjet david joseph
of westjet airlines
thank you glennon good afternoon and
thank you for this opportunity to speak
today um as glenn mentioned i'm david
joseph
distribute manager distribution for west
jet airlines and i am based in calgary
alberta canada um i managed the indirect
distribution channels uh that glenn had
mentioned
and i'm going to give you a history of
westjet which will show you how we fit
into the ecosystem of distribution that
that glenn just described
so who is westjet um our beginnings date
back to 1996 with the vision of being
bringing lower fares to canadians with a
network of three aircraft
flying to only five destinations in
western canada
with an original plan not to expand
outside of that region
so here we are today with 180 aircraft
and more than 100 destinations
throughout the world with many
milestones along the way that have
contributed to our distribution
landscape and our expansion
as i said our airline launched in 1996
february 29th in fact and yes the 29th
was on purpose as we like to do things a
bit differently here
after the launch there have been many
milestones throughout our history in
2002 we started our expansion to eastern
canada with the focus on business travel
to toronto and that area
then in 2004 we introduced our first
flights to the u.s as well as launched
westjet vacations
as we continue to grow we looked at new
opportunities to gain market share and
introduced our westjet rewards program
and unlike other rewards programs
ours is a little unique in that we don't
earn points uh you earn westjet dollars
and those dollars earned can be used
just like cash in on any destination in
our network
and there are no blackout dates that
other rewards programs are subject to
once again we like to be a little bit
unique
in 2012 we started to see our lead our
real growth by adding new aircraft our q
400
this is a smaller aircraft that other
than our than our mainline jet aircraft
that allow us to fly to smaller
communities in canada that that we
couldn't previously serve
with our jet aircraft and we now have 47
of these aircraft flying within canada
and the us
so that expansion continued with the
introduction of our first european
destination dublin uh in 2014 in
conjunction with our first wide-body
aircraft in 2015.
today we now fly to six destinations
within europe and we currently have
seven wide body aircraft
with another delivery of three
additional over the next year this is
going to allow us to expand even further
in parts of the world that we currently
do not fly to
to further our expansion in 2017 we
introduced our low-cost subsidiary swoop
as glenn mentioned um using the
ahmedabad's avatar reservation system
although westjet company they are
operated independently from west jet and
encore to point to to the point that
they have their own offices and staff in
calgary and this was an opportunity for
westjet to expand from a a hybrid
sort of a hybrid carrier
into the ultra low cost
carrier
network
so with all that growth we now serve
26 million guests per year with 700
flights a day pre-pandemic and we're
proud to have received several rewards
and accolades along the way
if you get a chance
a a little plug here uh if you haven't
seen our christmas videos and or our
april fool's videos uh i encourage you
to go to youtube and uh
and uh search on those because they are
they're quite entertaining and and and
the christmas videos will will bring a
little bit of joyous tears to your eyes
um
so we are no longer canadian airline
with 41 destinations within canada 28
destinations to the us and 34 to what we
call sun destinations and has previously
stated uh six destinations to europe
and this is all great but you may be
wondering with the pandemic
how has this affected west yet so as
previously mentioned we have 180
aircraft 100 destinations and 700
flights a day
during the height of the pandemic we
reduced our schedule to 10 of
pre-pandemic levels parked 150 aircraft
and only flew within domestic canada
i'm happy to say that although we aren't
quite flying the 700 flights
pre-pandemic
we haven't reintroduced all the routes
back into our system we've just reduced
the frequency to certain destinations
with all 180 aircraft back in in the air
so how do we recover
that's where distribution contributes
we're responsible for managing various
channels uh many of which glenn
mentioned before that sell our airline
through computer systems that travel
agents such as amadeus as well as the
consumer sites such as expedia google
and kayak to name a few
those indirect channels contribute to
almost 2 billion in revenue to west jet
in addition we have partnerships with
more than 50 airlines all these
partnerships allow us to receive
reservations from more than 100
countries throughout the world
in addition there are other areas that
we lean on to recover from the pandemic
we remain loyal to and expand our
westjet rewards program which now
exceeds 7 million members
we continue to grow our westjet
vacations
portfolio to more than 60 destinations
and
as announced this month we will be
acquiring sun wing airline which will
expand our growth with more aircraft up
to 40 and more vacation destinations
we will continue to enhance the
attributes that come with our westjet
rbc mastercard and continue to enhance
our mobile app
thank you
thank you
thank you david
so
westjet um
i would call it a full-service carrier
in the sense that it has multiple cabins
international and all of that which is
going to be very different from
uh spirit who will now speak where we
have one cabin um in a more uniform
product
rich is a good friend and a colleague a
customer for many years and we've often
joked that sometimes keeping things
really simple is really difficult so um
with that let me turn it over now to
rich and have a distribution perspective
from a very different airline
hey thanks glenn and um i appreciate the
opportunity to sit with these um
other panelists on here they are well
known to me and in the industry um julie
and ty uh specifically they do this kind
of thing on a weekly basis
to tell the truth um just a little bit
of background on me um i am the senior
director of distribution and sales
strategies uh for spirit airlines based
in miramar florida fort lauderdale um
i've been with uh spirit for 16 years
previous to that i was with u.s airways
until america west acquired them and you
know ate them up um which is now called
american airlines um so as they all uh
merged into one entity uh prior to that
um i was able to enjoy um
some time with as a senior account
manager at amadeus uh where glenn is um
works
um
so i've had a background in the gds
world a legacy airline world and or
you know full service airline and now a
ulcc
and that's kind of laid a a great
foundation
for the strategic role that
i get to
do here at spirit
a lot of airlines in the in the industry
don't necessarily prioritize their
distribution uh or their distribution
strategy
they kind of take it as it comes and
with that um i've been able to find my
uh my niche into uh being able to manage
risk um
as well as understanding data um you
know where the bookings come from um to
be able to understand the paths forward
uh third-party distribution is what we
call indirect distribution here at
spirit um and that's anything um and to
kind of what glenn said is anything that
is sold by somebody else to to make it
easy you know
we do have our own website
we do have an app we do have a res
center still um
we do have uh ctos in the international
destinations um but all of that um you
know leads up to uh that the fact that
the third party distribution does um uh
make up quite a large share of spirit's
business
you know expedia uh on here uh does a a
fantastic job with us and you know the
reason why they don't prioritize other
airlines don't prioritize it so much is
it's difficult to understand
no it's not just a commercial product
you know or a business product you go in
and hash out an agreement or a contract
and price and stuff like that with one
entity
it's about the the the
the technical
ability in which to distribute your
product so like glenn said you know
spirit's a little different uh in 2008
we went through what we call an
unbundling um where in the past all
airlines you know you pay one price and
you got you know a cup of water you may
be some peanuts on board you know you've
got your you know a seat assignment um
and all of those types of things for one
price or one um um total price spirit in
2008 took the brunt of a lot of
industry ridicule um that we followed in
the lines of like a ryanair out of
europe where we unbundled everything
except for you know we
we we get you from point a to point b we
let you bring a personal item and then
you get to customize um your trip
anything you any way you like so as
glenn said we're in the all economy
cabin but we have some big front seats
in the front of the plane you know you
you can buy a you know a 20 uh fare on
us
and you know spend 100 bucks to go to
vegas on friday night in the big front
seat you know
we're good with that you know if you
want to bring it carry on you know with
all your stuff in it yeah a little bit
more uh money so
at the end of the day we never really
said that we would be cheaper than
anybody else but we gave you the option
to
select or unselect
the products and services that you liked
um you know i've been lucky enough
throughout my career
to work with our distribution partners
and travel sellers you know distribution
partner as uh the gds's um and the
travel sellers like um expedia here um
to maximize our yield um you know one of
the things when you do unbundle it's
easy to
you know change your website to make
sure that you've got um the right
products to the customer or the guest at
at the right time
the thing that we've had to work really
hard on this last five years or even
more in some cases less in other cases
is that how do we get those products and
services out to the guest that um that
chooses a different place in which to
purchase so spirit's taken on the role
of
we want to make sure that wherever the
guest wants to interact whether it be
expedia that they can get the same uh or
a similar experience that if they went
to spirit.com
you know we're good at um we're real
good at flying airplanes um but a
website i can tell you that you know
expedia's got a lot more experience and
understanding and knowledge and data and
they do a lot of work with their website
they know how to sell probably better
than we do so we rely a lot of uh advice
from them
and with our the new technology with nbc
we've been able to um
get to a point of where we can supply
some of those things and just recently
we've launched our bundles on expedia um
and our seat seats um
um our our baggage is coming
uh shortly and is through our nbc new
technology um concept and luckily for us
um as of today uh almost 95 percent of
our third party distribution can go
through nbc today uh we still love our
gds's and travel agents no matter where
they want to book us and i'll leave it
at that um i i'm sure there's going to
be tons of questions so we can go into
that further
thanks rich and i think that's the
perfect segue then
uh
to
to turning over the discussion now to
julie at expedia so on one side we have
airlines that want to sell their
products and services and now we have
somebody on the other side that wants to
sell and and that's where expedia comes
in as i said i i use the term travel
agent and there's lots of different
flavors um and julie you may take
exception with that that term um and i
often tell people oh expedia is a travel
agent and they look at cross side and
they say but they're online and they
said yes but that still makes them a
travel agent so i know expedia does a
tremendous amount of work they do a lot
of things and and maybe it's their their
core their travel agent but i know
they're a whole lot more and so um
please uh tell us about expedia of
course and i don't take offense at being
called a travel agent i think we're
proud of being travel agents good um and
we power a lot of travel agents
throughout the industry with our
technology as well so
we are part of that ecosystem
for me personally my journey started
27 years ago in the airline industry and
it was a really interesting time in the
industry in the mid 90s what ended up
happening is that most of the large
airlines had previously been
paying about 10 standard commission to
all of the agencies there were travel
agencies on every corner my first job at
british airways was calling on those
small travel agencies and over the
course of the coming years we saw a lot
of consolidation we saw growth of large
mega agencies and the rise of the online
travel agency experience especially as
those commission cuts went into effect
and it no longer became like
economically viable to have a storefront
where you're booking new york to vegas
type tickets especially since those
kinds of transactions were reasonably
easy for consumers to do themselves uh
so a lot of change in the industry i
stayed at british airways for 16 years
did a lot of really cool things there
but then about 10 years about 11 years
ago i joined expedia
and um that has been a really
interesting trajectory as well so just a
little bit about expedia group
we were founded in 1996 right around the
time that i joined the industry
as a division of microsoft so uh it was
originally like a cd-rom it was expedia
that's how you booked your tickets and
it has evolved obviously quite a bit
since then
a fast growing industry in 1999 we were
spun off as a public company and in 2001
we were purchased by iac group which is
owned by barry diller and mr dillard
tells this amazing story about the the
sale was
announced in june or july of 2001. and
then september 11th rolled around and
they had the opportunity to go to leave
the deal to you know to terminate the uh
the offer uh and they talked about it a
lot and they decided that where there's
life there's travel and um decided to
progress with it and i think he'll he'll
say it was one of his better decisions
and he's in a career of many many great
decisions that mr diller has made so um
that's that that was sort of the
beginning of him being part of our our
universe and then we were spun off um
and we are publicly traded company he is
our chairman today
so we've continued to grow a lot i
joined in 2011
my team is responsible for the global
air partnerships
and um we've also grown as a company
since then we've acquired other brands
like travelocity
uh orbitz um uh
verbo which is a vacation rentals
company which was a very good thing to
have during a pandemic when everyone was
booking vacation rentals so
we have sort of a wide portfolio of
brands underneath us
but what my team does is we look after
if glenn mentioned the five ps i'm going
to mention four c's
we're responsible for securing content
we want to make sure that customers who
come to our sites have the ability to
book
all of the fares the availability uh the
ancillary products that are most
important to them
we also are focused on connectivity so
ty is going to talk a little bit about
how his his company is facilitating
changes in the connectivity model
glenn's company has the gds model we use
both types of models of direct connect
and gds technology uh there are pros and
cons to every kind of connectivity that
you could possibly use and it's a very
individual conversation that we have
with each of the airlines and with our
gds partners to determine how what the
best way to secure the content is
uh we also are focused on compensation
so we work with our airline partners to
determine a fair compensation for the
demand that we drive to them
and then
but the whole thing that really ties it
all together is the fourth c and that is
the customer um the customer is at the
heart of everything that we do and
making sure that we have the right
connection connectivity the right
technology the right relationships the
right content to deliver a customer
experience that's truly going to add
value and provide delight for the
customer
that's you know what what keeps us going
uh we work with about 500 different
airlines on a global basis so i have a
team of about 40 people spread
throughout the world working with
airlines all over the place um and we
also are focused uh now on expedia as a
platform so one of the things that
people may not know is that my team
works with airlines to power their own
websites through
technology and inventory so
for for instance you might go to one of
the major airline sites and book a hotel
using your frequent flyer miles
oftentimes those hotels that technology
is powered by expedia group so we really
do view ourselves as part of a two-sided
marketplace where we create a great deal
of demand for our airline partners they
bring to the table excellent supply
supply and it's really about how do we
do value how do we create value for both
of us and and for the customer at the
end of the day in this in this ecosystem
so it's an exciting time to be in
distribution and
uh i hope that um some of you as you
embark on your careers you consider
joining this kind of area because i
think that there's a lot of uh great
upside here
so i'll pass it back to glenn
thank you
that that's wonderful and i think what
you said towards the end there that
there's a two-sided model where you're
generating demand um and matching that
with uh with the airline partners on the
other side is wonderful i think that's a
real key takeaway
so
as we i've said i work for amadeus and
we consider ourselves to be a technology
company um but we're not the only uh
we're not the only entity in the
marketplace and so now i'd like to turn
it over to ty ratcliffe from acelia and
they have a different approach on how
they help airlines market and uh
merchandise uh rich reference in dc um
which i know tai will um
kind of tie that back in as well that's
a an innovation that's up and coming and
he's very near to that so hi
welcome
thank you glenn and it's a it's a
pleasure to to be here to speak with you
all um i'm gonna have to watch the clock
closely because i'm so passionate about
a particular topic that i could go on
for
way longer than the amount of time that
i've given
um
each of the folks that on this call
are either personal friends of mine
or folks that i um
have just recently met and will become
great personal friends with
um julie and i for instance uh have
known each other for many years in my
role at united airlines where i was
responsible for distribution for about
10 years
rich and i know each other
i worked for amadeus
glenn and i were on the same team for
many years at amadeus
and
my company actually powers or provides
services to david's company westjet as
well
so i've been in the industry since
probably 1997.
i've worked for amadeus a couple times
i've worked for orbitz.com g2 switch
works
uh most recently united i left united in
july of last year uh as this opportunity
at excellia opened up exelia is
interesting it's a kind of a collection
of multiple companies
um revenue accounting which is sort of
the the back-end processing for airlines
how they recognize revenue
um
so that was sort of the core part of it
as well as cargo
and and now they've purchased a company
called fair logics and if you google
farelogics and and check out what
they've done in the industry it's been
interesting
they actually are based here in miami
and
they donated the very first schema xml
schema which has become
the foundation of in dc and you heard
rich mention that earlier ndc stands for
new distribution capability we came up
with that acronym in 2012
so i don't know if it's fair that we
should still call it new distribution i
mean that's 10 years ago
but we're still working on implementing
it uh and
you know it took the industry 13 years
to move away from paper tickets to
e-tickets so we're right on track for 13
years to move to nbc so
it's not the fastest industry and i
think a lot of that has to do with how
complex it really is
i'm sure that you've probably heard of
the book hard landing
uh and you can read in their sections on
bob crandall's
famous flight with the executive from
ibm where they founded saber in one of
the first gds's in the world
and
back then it was a crs computer
reservation system and
all of the things that have happened
since then to
help an airline distribute its products
and services through a third party
there are standards that were developed
back in the 1950s all standards in the
industry are managed by iata the
international airline transport
association i'm sure that you all are
familiar um and so
we've been using
teletype and effect messages since the
1950s and 60s
it isn't it hasn't been broke why fix it
right well it's because you can't put a
picture of the big feet that rich was
just referring to in a teletype or at a
fax message you can't put a nice picture
of all the cool things inside of a
westjet aircraft
uh for things that for julie to to
display on expedia and show people the
difference between different airlines so
many people
say oh it's just a commodity and the
airlines need the commodity well that's
that's not true at all
um there are several different products
and services and as airlines invest
further there's even more reason to
educate customers about that distinction
and that's really one of the core things
that ndc brings
to the market here is this capability to
educate customers on the differences
between products and to personalize
offers so back in the day when things
started you would publish your fares
through this company called airline
tariff publishing company atp co you
send your your schedules through oag the
official airline guide and then you
communicate with airlines via these
legacy messages
for inventory open or closed right
and so the gds's for many years took on
the heavy burden of coming up with all
of those shopping results and they and
the technology in the airline industry
in the 60s was fantastic i mean it's
very cutting edge but i think what
happened along the way is that we all
sort of got entrenched in this uh way of
doing business with green screens and
things of that nature and we keep trying
to come out of that but because we
haven't really done it as a standard
together there have been shoots and
offshoots but we've not not really
lifted up the whole industry together in
the way that we are within dc
it lays the rails for us to start having
these dialogues with one another
um in a real-time way with rich
information and letting the airline be
in control of those shopping responses
instead of folks like the gds's or or
others
not to say that that's going away
anytime soon with other people creating
the shopping results but that you know
the desire of the airlines by and large
is to say look i know about the customer
i know that i spilled coffee on them i
know that the last four flights were
late i know that we lost their luggage
let me make it personalized offer to the
customer to recognize those things i
know about them or
i know that they bought an economy plus
these the last four times that they flew
in and or they never have so i want to
give them one for free maybe rich wants
to say i want to give you a big seat one
time free because i see you're
frequently traveling on me and then i
know that you'll be hooked because
you'll love it and you'll want to do it
same thing for westjet right give them
an upgrade into one of the
different seats or give them some
experience that they maybe haven't tried
before
and and once they taste that they'll be
interested in it educated about it and
want to try it again and again and
that's really the power that ndc is
going to bring
to make those customized officer offers
to customers
and to get the content out there in a
meaningful way
i think i've probably gone pretty much
to my time limit
but anyway fairlogix is the company
that's bringing all of that kind of
stuff to market along with others and
we're excited to uh continue to help
airlines realize that distribution
um
opportunity
thanks tai i think you tied that uh up
really well so we we have airlines we
have travel agents and we have
technology in the center to to kind of
um facilitate all of that
so um let's open it up to some questions
we have one question that came in which
is wonderful
and it's just saying
how have um how has the pandemic changed
the buying behavior is there are there
any differences
uh pre-pandemic post-pandemic um what
what are the trends uh that may have
been um that have come about because of
the pandemic
um so i i put that out to
the the the entire panels for their
different perspective
i can take it first if you want sure
so
we've seen um that the price is always a
leading indicator for people that are
choosing to travel but during the
pandemic we saw
something else that that
came about and it was you know
self-service and touchless
so at spirit we've done a lot of things
with
for example um our self bag drop where
you actually take your bag you put your
ticket or your driver's license under it
it prints out a bag tag you actually you
know tape it together put it on this
automated you know belt and it goes off
by itself to the app the app exploded on
the ability for people checking in and
to purchase you know different
ancillaries so people just don't
necessarily we see an evolution of
people wanting to um interact less with
people
but still be able to travel and so you
know um
it they're looking a little bit more for
value um so are the planes cleaned um
do they have wi-fi which we've just
launched wi-fi on all our planes um do
they you know can i get through with
just my app on the phone and go through
tsa um and some of those you know can i
just drop my bag off and go um
we've seen that be a a
jump up in in its indication on how
people are selecting travel today
so rich as a follow-up did spirit
already have this functionality that
it's just being used at a greater rate
or were these some things that
you realize oh we have to go develop and
then get this to market
yeah so that's a great question and you
know luckily we did we were dipping our
toes in the self bag dropped you know
las vegas was a big one for us um now
by you know the the popularity of it you
know if something um doesn't you know uh
work you know you fail fast um you know
you take um you know put a little bit of
risk out there fail fast but we've seen
that the uptake um and those type of
things have um enormous value and we've
launched the app during the pandemic a
better app we went to
a mobile app versus a just a
representation of the website on mobile
um so we did that at kind of the
direction of investing in the guest the
guest told us this is what they want
this is how they want to interact with
us and we've implemented that and then
we continue to listen to the guests in
that aspect
very good
yeah i just i'll echo what richard said
i mean we you know a lot of those things
we were already doing but we actually
enhanced them
um you know because you know the cut you
know touchless from you know the time
you arrive at the airport till you get
on the aircraft and such was certainly
very important and such but
one thing we also saw was you know and
really working with you know expedia uh
uh
with julie's team as well as you know
with tai and and and the fair logic
cellular team is that you know we we saw
that we had to take the opportunity to
step back and look at our technology you
know and and really i guess uh you know
come into the the next century of
technology within the industry and
working and having a plan around ndc
and also just working closer with you
know with the likes of expedia you know
and how can we distribute and sell our
product much better you know on those on
those distribution sites and such so and
then overall i think the overall effect
and as we recover it's anyone talks
about it when's business travel going to
recover
uh you know i mean we we're we're mainly
a leisure airline we were you know with
our wide bodies and and and
reconfiguring our planes we're really
expanding into the business class
uh side side of the business and you
know the pandemic pretty much put all of
that on hold
so you know recovering with that
business you know that business traveler
is certainly going to be a challenge i
think for for all airlines
okay
anybody else uh on this question
i mean i i think that you know to your
point david one of the things that
travelers have been able to take
advantage of during the course of this
pandemic is lower fares for leisure and
the ability to book in a lot closer than
they historically have because typically
those fares are reserved for business
travelers who are a little less price
sensitive
so as business travel does start to come
back i think airlines have a really
strong desire to improve their yield and
we are going to see those types of
close-in prices becoming less
competitive and so travelers will need
to start to begin to plan ahead a little
bit more than they have been over the
course of the last year or so um we're
also going to see a diversity in the
roots that people travel um
for the last couple of years it's been
north america north america north
america and some leisure destinations
just outside of north america um we are
going to see business
people
returning to
europe uh asia pacific much much slower
rate of recovery but we will eventually
see that and we're starting to see some
really nice green shoots in places like
australia and singapore where they're
opening more and more opportunities for
people to travel
so uh the diversity of the routes that
people fly
the timing in which they book
the other thing that's happened during
the course of the last few years is that
many airlines have made their standard
economy fares
completely flexible and travelers tell
us they want more flexibility and so
this is a response to that there's also
been a lot of infrastructure that we as
an industry need to build to allow them
to do that to have credits for future
travel to rebook those etc so that's a
big changing trend for for a lot of us
okay great
so we have a another question that's
almost a follow-up to this has there
been any significant shift in the
rebound of leisure since the beginning
of the year due to geopolitical issues
and inflation so i think this is
kind of picking up what you've just said
i would also add
you know how does
leisure compare to to business
from our perspective we've seen that
that leisure is
is outpacing the business traveler and
um we expect that this this will take a
little time to to recover
i don't know if anybody wants to comment
on that
i mean i think this is these are all
really
good points i don't think that we've
seen any specific
things that we can tie to either
geopolitical or inflation we see an
improvement
um constant improvement over where we
were we're not at 2019 levels yet but
our hope is that we will be at 2019
levels within you know not too long from
now
okay
we have another question regarding
insurance
not sure from
we've got another question here
regarding insurance um or is anybody
aware of of an insurance product um
being sold along with an airline ticket
essentially as a stock option to ensure
a specific price or to lock in a
specific price
is that anywhere in your distribution
strategy
i can take um a little bit of shot at
that one as it's you know kind of the
future what we're looking at um and
there are um travel sellers out there
that do offer these types of
travel insurance
one of them named cancel for any reason
which is a a product that's on the
market that we're seriously looking at
we are a non-refundable uh ticket
airline um so outside of the government
mandated within 24 hours um anybody can
get 100 refund on any airline ticket in
you know the us for sure i'm not sure i
don't want to you know throw canada in
there but uh um that is a mandate for us
um so outside of that you know what can
people do to ensure that you know they
don't lose the the price of their ticket
well there's um
you know with any crisis there's there's
a
trickling up of some new and innovative
type of um products and and ancillary
products where yeah if you spend an
extra 20 bucks on your on top of your
ticket um you can get you know 80 of
your um uh refund back or if you spend
25 you get 90 of that back um cancel for
any reason which means that we don't
care why you cancel it you know we'll
give you your money back and so it
spreads out the the risk amongst many um
you know for the the few that will end
up taking something like that but those
things are you know are out there and
coming to the airlines quick
there you go yeah
yeah they're yeah they're definitely out
there sir ty uh yeah definitely out
there and i mean you know we we do sell
insurance in path with a booking and a
reservation uh both you know to to
protect the gas but also you know from
you know medical insurance as well
um i think one of the challenges is that
you know when you're working with with
partners such as expedias you know how
do you sell that and other channels how
do you sell that you know through a gds
and such you know so it's more you know
prevalent on on on direct sites as
opposed to you know you know on the
indirect side so i think that's
certainly you know a challenge you know
within the industry as we move forward
you know maybe from a technical
perspective and stuff is you know how we
expand those offerings outside of our
direct channels
very good my my addition is that you
know united for instance has a fair lock
product where
you can say i want to lock in that fare
for a certain amount of time because as
you know with inventory changing
especially uh close into departure
the fare is going to go up uh you know
potentially uh pretty significantly so
you can pay for fair lock which is sort
of like an insurance product in order to
keep that fare uh locked in until you
decide to buy so that's one example of a
type of insurance product
um it's interesting with you know with
what rich was saying airlines are
required to refund within 24 hours by
the d.o.t but travel agents are not
expedia is a good travel agent that will
help you in that situation but not every
travel agency will so it's an
interesting
point that uh
buyer beware
buy for good travel i want to emphasize
we definitely do if you wanted to cancel
it in the void window you can cancel
within the void window when you book on
expedia
not every agency does that
okay great so um we have another
question here um
and what can airlines learn from a
traditional retailer um certainly amazon
comes to mind as as the the merchandiser
today
what can an airline perhaps learn from
them or some other
uh good more traditional retailer
so one thing i i would say is um you
know going back to that traveler
experience uh drum that i'm continuing
to beat uh one of the things that amazon
is great about is if you need to return
a product um you can just do it it's
easy they you know you drop it off at a
number of different places sometimes you
don't even have to return the item if
it's a low value thing
if you read a typical airline policy
it's sometimes like a series of 24
different conditional if then sentences
um we make it so difficult for travelers
to interact and to get service in some
cases that they end up getting very
frustrated and it's really about we're
trying to tie up every loophole but in
doing so we're really creating a a
friction-filled experience that is
actually probably driving a lot of
hidden costs in our own business that we
could probably avoid if we were a little
less precious about it amazon seems to
have uh you know
figure that figure that out and i think
that would be a great um thing for the
airlines to take some inspiration from
okay i mean because i think that um
you know amazon is amazon they're so big
that who cares what other retailers do
right they sort of drive their own
make their own decisions
if you're an airline and you decide to
to take a risk and do something unique
if other airlines don't follow you
sometimes you end up out there by
yourself looking dumb or or feeling or
regretting your your mistake right and
so
uh i think it's interesting
um in that regard but
customer centricity really is made
difficult by the technology that we've
had
and been entrenched in a lot of the
systems that are out there that support
airlines are built around the flight
you you build this record that has a
flight and then everything is tied to
that flight it's not tied to it's not
focused and honed in on the customer
itself and i think that's where you'll
see
one thing i didn't talk about
in dc
is the precursor to one order
one order is the next initiative that
says let's get rid of the idea of this
ticket ammo if amazon was running the
airline world they say why do you need a
ticket what on earth are you going to do
with this ticket right they'd say you
have an order and it's either paid for
or it's not the to the to the complexity
that julie was just describing right
many of you probably have gotten to the
airport and you've heard oh your ethic
and it's not safe to your to your p r
what what are you talking about luckily
some some airlines don't have these
tickets at all they're ticketless uh but
you know that's just the complexity that
we've got in there and then this whole
notion of a pnr this passenger name
records um the data structure it's very
limited uh a very quick aside when when
airlines started to charge for bags
there was no box
on the electronic ticket where you would
put a fee for a bag so we had to come up
with two or three different solutions to
try to even collect the money for the
bag fee which has resulted in other
documents similar to tickets again think
of it like a hotel when i check out of
this hotel i'll have one bill that will
include everything i bought
the the
breakfast i had this morning the hotel
charge if i rent a movie if i go to the
bar it will all be on one easy to read
thing why isn't the airline industry the
same
that's what oneworld is going to try to
bring to bear and that's really what a
big part of what my job is here at
australia
that's an interesting point but all this
time we've been uh
working within the confines of an
industry standard and as you say when
you wanted to start collecting for bag
which was a new fee
where how do you collect that it seems
kind of silly that it shouldn't be that
complicated but in the airline world
where the ticket number drives
everything in accounting
well now i don't have an accounting
number i don't have a ticket number so
how do i how do i record the revenue if
i don't have a ticket number to to go
along with it it it it sounds kind of
silly
but that those are the systems that
airlines have today in which we have to
work around
let's just say that my ceo came from
outside the airline industry and when i
try to explain stuff
he looks at me like i'm insane so
you know and it's a good point that
everybody makes and and here's what a
little piece of advice to everybody
listening would be don't get stuck on
what currently works always consider
what's new you know or you're going to
be the blockbuster when netflix comes
out or you're going to be the taxis when
uber comes out you know always be
looking ahead it doesn't mean that you
have to just throw the you know
everything away that you've already done
but what it is is always evaluate that
next level there's so much new coming
out there's so many smart you know
technology startup companies out there
you know
get with them understand what they do
you know how are they selling it i know
i i believe and correct me if i'm wrong
julie that expedia has a whole
part of their company where they
evaluate these new startups you know
and then they kind of um you know see
what works and what doesn't and they
bring those things forward as as they
come so you know it is don't get stuck
on what you're already doing you know
but don't throw it out you know make
sure that you're making uh you're
looking into the future for what what
next technology or products or services
are coming
very good that kind of then goes into
our next question is well what do we see
is the future what are the what's the
next big trend
that that's coming around
so you've kind of one order um anything
else you would add to that
so that that's going to be so big i'll
be talking to you in 13 years from now
about how we're still
okay
i'll be happy to have you back
but it's going to be big uh we just
think about it every player in the
industry
if i say there's no ticket anymore
think about all the processes that the
ticket touches within an airline right
all the way from
oh
you know you're trying to get on the
plane is the ticket uh paid for or not
and then all the revenue accounting and
everything that that that touches that
it goes away and so we're talking about
radical transformation of the way
uh an airline works today and then every
partner that they interact with so
that's that's a huge one and that's that
would be my biggest trend that i
uh
you know and i'll just add that uh you
know i personally think that we're going
to see a
personalist airport
where the people are not there anymore
with the biometrics that we have at a
lot of the airports the self-service
everything from you know
when we do have an eye rock right now or
disruption irregular operations your
flight gets canceled delay we are
sending and pushing information to the
guests directly on their phone uh their
tablets um via sms um email etc and
we're providing other air options you
just push the button okay i'll take the
later flight on spirit or hey spirit
doesn't travel anymore today let's book
the american one or your hotel vouchers
your meal vouchers everything's going to
be sent to you it's all going to be
automated you're not going gonna in
unless you really want to you're not
gonna have to talk to anybody you're
gonna be able to get on the plane not
have to talk to anybody biometrics um
that's where i see within the next 10
years you're going to see
a lot of the clearing out of the people
out of the airports
wow okay
i think that's that's fascinating i
never really thought of that rich that's
that's really cool one more thing that
popped into my mind is
the industry is also talking about
you as a customer
and how you will own your own data
and how you will enable people to access
that data in the future
and how you will say well this is my
information it has value yeah i could
even see a point in the future where
perhaps you even sell
your
in your personal data to people that
need it or want it uh you know maybe
maybe it becomes an nfp
right maybe there's snapshot of your
data becomes a non-fungible token or
maybe you you know you're
uh but but regardless i see a world
where
customers will take more and more
control of their private information and
decide you're already seeing it with
things like cookies right well imagine
that 10 times bigger uh that you know
where
you're saying okay well i will give you
this information to service my booking
etc but then no more unless you
compensate me or something else right so
i think look for things in the personal
data yeah
that's a good point ty because you know
as we know in the industry there's
always been that argument who owns the
data
you know and who owns the data who owns
the customer you know and and it's
really the customer right now isn't in
control of that
um and such so very good point
i would i would throw out an entirely
different trend from my perspective
which is around sustainability um here
in the us not like the hugest talking
point i'll tell you though when i work
with my european partners it is top of
mind and one of the things that we as an
industry need to come to terms with is
our impact on on our climate uh and it
is sustainability
i think about when i go to a restaurant
a fast food restaurant and there's
calorie counts and the calorie counts
are designed to help me make a better
choice and i can if i choose to because
uh i know what calorie counts mean i
know what it means to have something
that's 600 calories versus something
that's 1200 calories
i don't necessarily yet understand that
in the carbon carbon offset world and
the um yeah in the
emissions world and so one of the things
is an industry that's a huge opportunity
and it's a huge opportunity for the
students at emory riddle to think about
is how do we solve that how do we get
that to be part of the common vernacular
how do we create standards around that
so that people can make good choices and
airlines are forced to do the right
thing as far as their ongoing um
impact on the climate so
um i think that that's going to be
something we're going to be talking
about for a long time
okay very good
so we have another question here about
hiring um is there a challenge in hiring
workers uh skilled versus unskilled i i
assume since we're talking about this
distribution airline distribution that
that's where where this comes into play
um
i i
from an amadeus perspective
uh
we're certainly looking for different
expertise so not to discount what rich
just said about um you know look to the
future but i think there are there is a
need for skills and understanding um
current airline operations and then
sometimes in order to move forward you
have to understand well what's currently
going on and if we change it how will
that affect it so just you know again as
ty alluded to do you understand the
impact of of having a ticket number do
you understand all the touch points for
that um and the standards that we've
talked about i think there's absolutely
a need for that and so if that makes
them a skilled worker i think that
that's um is certainly a priority i'll
throw that question out for anybody else
that wants to answer yeah i think that
you're right you know it's it's um both
skilled and unskilled labor is very
difficult right now especially in the
airline industry um we've had to
actually cut flights out of you know the
red eyes from across the country because
we can't get somebody to stop the
airport at two in the morning um so
that's it that's a challenge and you
know some of the challenges we face you
know and what we're looking for as an
airline and um
shameless plug uh richard.lowry lowry at
spirit.com send me your resumes we're
looking to hire
everything from pilots to distribution
people
in revenue management people project
management is a big thing right now in
the airline
industry
somebody that can take a project and
deliver from um startup to completion
tracking all of it you know setting up
data data is a big um one understanding
and and
being able to uh do data
and um not just to run data reports but
to actually interpret them and say what
is this data telling us so those are
some of the things from our point of
view but all of it's uh we need more
people period
very good and we have just uh two
minutes left any other comments or
anybody want to answer that question
oh go ahead david yeah
yeah just real quick i mean you know
we're seeing the same thing here in
canada you know we went from 14 000
employees pre-pandemic down to four
thousand and you would think that you'd
be able to bring a lot of them back as
you as you your business comes back and
it's a challenge
um it's top of mind here you know what
are ways to you know
to you know to bring the employee base
back um and you know and as well
competing with others you know within
within our area and stuff and i mean
we've primarily gone for the most part
almost
100 percent home-based uh employee
base
um just to encourage people to give that
extra incentive especially with with
fuel prices right now
if you don't have to drive into the
office
and such but uh it is it is a concern
certainly
very good
all right i think we're we've come to
the end of our time julie david ty rich
thank you very much for your perspective
um for the audience out there you've
heard from two airlines you've heard
from a travel agent expedia you've heard
from a technology provider all
contributing to airline distribution i
hope this gives you
some sense of of the complexity and the
excitement in the airline distribution
world and
thank you very much for your attention
glenn i want to say thank you for
organizing this i love the information
julie david ty richard
the opportunities for my students just
continue to grow
to your point david when the pandemic
hit everyone thought that enrollment at
embry riddle was doomed and yet we've
grown and that's a testament to the
resilience of the industry that you've
all made careers in and the
opportunities that exist for our
students
so thank you for providing great insight
into that today
and we appreciate you and your time here
thank you very much thanks for having us
thank you
have a great day everyone