This story is produced in partnership with PaxEx.Areo - The Business of Passenger Experience
For travelers the global alliance programs focus (theoretically) on delivering a more consistent travel experience and loyalty proposition. For the member airlines the goal is arguably similar, but it adds on a financial component focused on increased profits for the member carriers. With the dramatic shift towards unbundling of services and ancillary revenue in the past decade the alliances are caught in the middle. Passengers and airlines both want a means to realize the full complement of services across any partner carrier but the integration efforts required to deliver such are an outsized cost center, particularly for the smaller member airlines. SkyTeam‘s new SkyLink Digital Spine initiative, announced this week at the IATA Annual General Meeting in Sydney, aims to ease that burden for the group’s 20 member airlines.
Our focus has really shifted from the early days where we were looking at bringing complimentary networks together and expanding the footprint. We’ve moved into a second phase of life which is more [focused] on the customer experience and and how we can improve the passenger experience, especially when they travel on more than one airline around the globe. – Outgoing SkyTeam CEO Perry Cantarutti
SkyLink Digital Spine is a messaging middleware solution, a backbone network that the alliance’s member airlines can connect to for moving booking details between their PSS systems. Unlike the basic connections available natively in those platforms, however, SkyLink Digital Spine’s translation capabilities are universal. Each member airline builds a lexicon of transaction messages to match the SkyLink standards and then any of the other 19 airlines can transact against those exposed capabilities.
The initial use case for SkyLink Digital Spine will be to handle advanced seat assignments across member carriers. Delta Air Lines and Aeromexico are the first pair to activate the technology, with plans to go live later this month. Five additional airlines are expected to activate their SkyLink connection later this year with the balance of the 20 member airlines online by the end of 2019. As with most such efforts Cantarutti expects the use cases will grow, covering many facets of the interline travel experience.
Not unique, still special
Such digital integrations are not new, of course. Star Alliance CEO Jeffrey Goh demonstrated similar functionality (though not as cool a name) for his alliance’s version of the middleware communications platform mere hours earlier. It also handles advance seat assignments and baggage tracking between airlines. Star Alliance’s seat booking service went live in February 2018, beating SkyLink Digital Spine to market by a few months. But it comes up short in one critical feature: It only works for services that are complimentary. Star Alliance members cannot sell services from other carriers through their network. SkyLink’s design explicitly supports such needs.
The problem is not that passengers cannot pay or don’t want to pay. Rather, Goh suggests the issue is in handling the settlement of such payments between the airlines and, more importantly, handling the refunds across airlines when a service cannot be delivered for whatever reason. Pushing that partial refund process across an interline settlement system to reach the consumer in “20 minutes rather than 2 years” is key to the Star Alliance’s goals for the implementation of such handling. Without the ability to process the transactions that quickly and granularly expect the truly integrated ancillary sales processes to remain out of reach for most consumers. As it built the SkyLink Digital Spine services SkyTeam looked beyond the technical challenges to also include the business processes. That enables a more advanced offering from the group, in large part by choosing to stay out of the way.
When we started thinking about being able to offer ancillary products on more than one airline what became clear very quickly was that it is not simply a technology solution. It is also about having business relationships and being clear about what airlines are selling and in which channels. So we rely on the airlines for having negotiated some sort of settlement capability. That is a bilateral issue. We’re not involved in the commercial transaction. – Cantarutti
SkyTeam trusts its member carriers to negotiate the bilateral deals required for payment settlement and refund handling. It is a natural evolution of the basic business links involved in codeshare operations and similar commercial efforts. To deliver the additional benefits the business entities negotiate the additional terms. SkyLink Digital Spine facilitates the technical implementation.
Other link options
Both SkyTeam and Star Alliance executives hinted at other capabilities their respective middleware tiers could support in the near future, with passenger check-in a common thread. Despite the anachronistic nature of the check-in process it remains part of the passenger experience and an annoying one at that, particularly when flying a new partner airline. Goh suggests that Star Alliance is working to remove some of those barriers, enabling a “check-in anywhere” interface through the middleware platform. Under this scheme a customer on a United Airlines flight would be able to check in using the Air New Zealand app, for example. Cantarutti stopped short of specific comments on how such services might be implemented within SkyTeam but the support for ancillary revenue processing in the SkyLink Digital Spine offering should make such efforts more coherent and useful to both travelers and airlines.
More from IATA AGM 2018
- Fiji Airways signs on as inaugural oneworld connect member
- Star Alliance teases increased award availability, new top tier for travelers
- SkyTeam grows a Digital Spine
- DLD 196: Some long ones
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