ONE Order & Lufthansa Systems Revenue Integrity
Talita Dalla Vecchia
Product Consultant - Revenue Integrity en Lufthansa Systems
Our journey, “NDC & ONE Order and the future of Revenue Integrity”, is about to end. This is my last blog of this series. Let’s see in more detail what ONE Order means for Lufthansa Systems’ Revenue Integrity (RI).?
In my last article, I wrote, “Many times during the last months, I get the question “Will RI exist in ONE Order?” and the answer is YES!”
And this is true because ONE Order itself does not change what RI does or its goal.
The ultimate RI goal of cleaning the airline inventory from unproductive bookings, optimizing flight capacity, increasing revenues, and reducing costs will stay the same!
Is it affected by ONE Order? YES, because RI activities are based on the premise that bookings (or in future Orders) without payment can be performed, and on the idea that agents or passengers are trying to circumvent the booking policies.
How does IATA cover this on the ONE Order program??
Current business modules/controllers' applicability
It is necessary to take into consideration at least two important facts to define which of Lufthansa Systems' current business modules and controllers will still apply in the ONE Order World:
Currently, a ticket defines whether a booking is paid or not. In ONE Order, there will be no tickets anymore, the information if a booking/order is paid or not will change, and it will be transmitted in a different way.
The ONE Order program defines two possibilities on how payment can be fulfilled in the bookings/Orders: instant payment or deferred payment.
The airline will be the one, as it is today, deciding which payment model they will use. And it could even apply a mix of payment options depending on the fare or the channel where the customer created the offer/order.
If the airlines, in the future of ONE Order World, only accept instant payments, probably the revenue integrity checks for the ticket time limit, fictitious name, duplicate segments, time limit for ancillaries, and churning will not be necessary.
However, the need for checks about duplicate bookings and/or no-shows is still relevant. Misuse and abuse in the airline inventory will continue to exist. Even today, it is clear to the airlines that the fact a booking is paid not always imply that no abuse happened when the booking was made.
In the case of deferred payment, many of the current revenue integrity checks will still be needed as long as they are not done by the Order Management Systems (OMS).
Another topic yet to be defined is if the OMS will charge the airline for the airline segments (called in the future Order Items) as the PSSs are doing today. If this practice continues in the OMS and inactive or unconfirmed (waitlist) Order Items exist, then a process to remove these items to save costs for the airlines is still needed. If this practice does not exist anymore, then inactive segments and waitlist segment processes are unnecessary.
Time Limits based on IATA Definitions
IATA foresees two fields for time limits: “price guarantee time limit” and “payment time limit”.
For Revenue Integrity, "payment time limit" is relevant, and it is similar to “ticket time limit”, but it is set on an Order Item Level and not in a PNR level as it is currently done.
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IATA defines more clarification of both time limits as:
“The length of time the price of an offer item is guaranteed. Upon expiry, the price may no longer be guaranteed and either a new shopping process should begin, or the offer should be repriced resulting in a new Offer.”[...] Where a price guarantee time limit is applied, there is no guarantee that related inventory is guaranteed by the airline against a given offer item. [...] Source: IATA
This field is used to indicate the duration of time after Order creation that payment commitment is required for an order item. [...]?The Payment Time Limit is contained within the?Offer Item level, [...] Upon expiry it is expected that the Order item is removed from the Order. Source: IATA
New World, New Possibilities
The industry expects that the amount/quality/diversity of information transmitted with NDC/ONE Order will be much higher than what is available in the PSS data feed, creating new possibilities for RI checks.
When I wrote this blog, no Order Management System was already wholly developed, and even when IATA has some documentation, they might be different from each other and are not standardized.?One of the open questions is which kind of checks will the OMS perform during the Order creation?
For example, Amadeus Altea provides some checks built inside their PSS system, like minimum connection time, married segments, name change and duplicated segments in the same booking class.?Or for example, Navitaire (an Amadeus company) provides a ticket/payment time limit function inside their inventory system.
Will all OMSs have these functions? Or should RI still check them? If the OMS checks, are they flexible as our RI application is?
Interfacing with OMS - Revenue Integrity becomes Order Integrity
Currently, most Revenue Integrity applications use the airline data feed for their analysis and actions, which means it can only perform analysis and act when the booking is finalized and transmitted through the inventory PNR data feed.
To update a booking currently RI systems, use web services specific to each PSS system. The assumption is that this will continue to be true. Once the web services communications based on the NDC standards protocol are developed, it will communicate with all OMSs.
In the ONE Order World, the Order Management System (OMS) could potentially interact directly with Revenue Integrity. At the same time the Order is being created, updated, or changed. This opens the possibility for new processes and checks, allowing the airlines to have, through their RI systems, more flexibility on their business rules than what is expected from the OMSs.
Conclusion
It took around ten years, after the creation of PSSs and GDSs systems, for the airlines to realize that the revenue loss around the inventory exists, that abuses and misuses are relevant, and an automated solution is needed to take care of it.
Currently, most of the airlines have a RI solution in place and recognize its necessity, although it took nearly two decades of knowledge and development to reach this point. And yet, new abuses or misuse are created each year.
Besides protecting the inventory, Revenue Integrity is also about changing abusive inventory behaviors. The behaviors around the Order Management Systems do not exist because the systems are still under development.
From the airline’s perspective, as well as IATA and RI providers, there is no doubt that a solution for the same purpose is still relevant in the ONE Order world. However, defining it at this stage is challenging due to the status of the developments and still the need for some crucial information.
Lufthansa Systems will continue to research and follow IATA developments closely to be able to evaluate the best option and develop its product further with the ultimate goal always in focus, which is to bring to the aviation industry the most advanced and the best solution for your airline Revenue Integrity on the new ONE Order World.