“Little Big 10” WIT Middle East Lecture #1:

Trends Changing Airline Distribution

Timothy O’Neil-Dunne

Managing Partner T2Impact/Co-Founder VaultPAD Ventures

2004• Janet Jackson had a wardrobe

malfunction• The Tsunami hit• Britney was the Bride of the year• Airlines were bleeding

• Esp in USA• Dynamic Packaging was the hot

topic• EC enacted Regulation 261• Reagan & Arafat died• Oil broke $50/pbb barrier (Oct)

WIRED 2004

And in Singapore..• A former journalist

and writer started a small meeting on the topic of electronic travel commerce.

2004 VS 2014 Competition?

X X X X X

X

Timothy’s Global Top 5

• Retailing. • NDC and Dynamic Pricing• Personalization • Bye Bye Boomers• LCCs Mature, FSCs become profitable

Retailing

• Travel is not so special any more – retailing is a mind set that has been alien to supply side but the consumer (Amazon trained) expects to have a conventional experience

• Warning Mobile Commerce for Travel is very very different. Profile, behaviour etc

• Social does not exert as much influence as people think.

MobilePayments in EU-5

Airline tickets WAY down the list

Is Travel eCommerce Topping Out?

NDC and Dynamic Pricing

• True Dynamic Pricing – real time direct pricing unique

• NDC – a realistic bridge too far or….• …Not enough and too late?• Why unconstrained Cache is hurting

everything

Traditional vs Dynamic Pricing

Today’s Pricing ModelsTraditional Direct Holistic Including Indirect

Next Generation Personalization

• Personalization and tools to help from ideation to selection – it is all about ME!

• Contexualization understanding the context and situation to create relevance for consumers

• Taking personalization to the next level...It’s really all about me now

Bye Bye Boomers

• The changing of the guard – Boomers exit – Millenials enter

• Changing Characteristics of the consumer• The issue of Trust

Who is the Consumer?• Millenials will be the

majority of air travellers• A fundamental shift from

traditional business/leisure to leisure and only important business.

• Their characteristics are very different

• #NOgreyhairedwhitedudes

LCCs vs FSCs

• Different models • Airlines want differentiation• Low Cost Carriers and Full Service Carriers

come closer together and mix.• LCCs add back frills (A kinder gentler Ryanair –

now back in the GDS – but what a deal)• FSCs make profits• Can the two meet?

The Evolving Airline Model

Economics• ROCI 7%+ (DL’s15%!)• Higher Density• Segmentation• A return to Robert Ayling’s

British Airways?• Maxing out the LCC model• Why First Class is uneconomic

Passenger/Brand Experience• Selling a broad brand in a

differentiated market• De-commoditizing a commodity

product• True Personalization/Retailing• Understanding the purpose of

connections• A la carte products tailored to

each individual customer

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THANK YOU

Timothy O’Neil-DunneT: +1 425 785 4457

T:+44 7770 33 81 75 E: timothyo@t2impact.comE: timothyo@vaultpad.com

TW: @ProfessorSabena