The information, assistance, ticketing, and reservations segments of most industries have long back moved their operations to the cloud. However, for the airline industry, the shift to the remote server and SaaS providers’ platform was quite recent. A journey that began nearly 30 years ago has finally culminated in the cloud for the airline industry. However, there are several complexities and challenges owing to increasing routes, destinations, and airlines competing for airports, landing, hangars, and passengers. Nonetheless, the apex body handling the majority of the data pertaining to airline ticket fares is confident.
The airline industry that has strangely been struggling hard with manually entered data and other processes now has major relief. The travel industry and other ancillary services may have long shifted their products, platforms, and services on to the cloud. But for the actual companies operating the airplanes and primarily responsible for the airfares, the journey has been a rather long and protracted one. With the Airline Tariff Publishing Company or as it is popularly known as ATPCO, has finally opted to shift the majority of its operations to the cloud. The ATPCO has chosen Amazon Web Services or AWS as its preferred cloud service providers. The company is leveraging Routehappy to supplement fare data with “rich content”. Moreover, ATPCO is believed to be working on developing its own set of APIs to further boost ticketing services, and allow airline companies to further fine-tune prices.
ATPCO Has Long Been The Only Company That Has All The Relevant Answers:
Purchasing a plane ticket isn’t a major technical hassle for the average customer today. In fact, several travel agencies or even airlines, operate their own online platforms, web apps or smartphone apps to offer the convenience of quickly booking a ticket. However, the actual act of finalizing a plane ticket involves several prerequisites. Buying a plane ticket involves questions like where and when you’re flying. What airline will you take, and how much are you willing to spend on the fare? What will you pay for luggage? Are there blackout dates to consider? How many stops are you willing to make? Do you need Wi-Fi or meal options on the flight?
Most of the abovementioned questions may take passengers directly to the platforms owned and operated by the airlines, travel agents, an airfare aggregating site like Expedia or even to an app like Google Trips. While the passengers are asked these questions, all the airlines have only one platform that answers them. The company answering these crucial questions has always been the ATPCO. For well over five decades, the company which is jointly owned by major airlines has painstakingly collected and distributed fare and fare-related data for the airline and travel industry.
ATPCO is transitioning from a mainframe-based clearinghouse of fare and rules data to a cloud-based enabler of "retailing, customized offers, rich content, dynamic pricing in all channels, and that includes NDC." https://t.co/dxONiH1A9O pic.twitter.com/npsteery8d
— Business Travel News (@btnonline) January 25, 2019
Surprisingly, the collection may have been digitized, but the distribution process was shockingly manual, mentioned ATPCO’s CIO John Murphy. “We published huge books, they were several inches thick. They had all the fares and tariffs, and travel agents went through those and they would hand-write out the ticket as they built the journey.”
Needless to mention, the data that ATPCO collated and distributed to its associated airlines and subsequently to agents has always been huge. Statistically speaking, ATPCO manages more than 200 million fares for 460 airlines. In addition to the airlines themselves, the ATPCO also works with travel agencies, search engines, global distribution systems, and governments. This means the complexity of the operation is quite high. No wonder ATPCO’s journey towards automation and digitization of the information it manages began nearly 30 years ago.
Automating And Digitizing Airline Fare Is Quite Complex For A Single Company:
Although the ATPCO has focused on automating that process and creating an environment that leverages the network economics of having one company that handles all of that data, the complexities keep on increasing, continued Murphy. “The number of dimensions airlines use to differentiate themselves and the amount of data required to accurately price an airline ticket has continued to grow.”
Currently, the ATPCO has around 1600 different data elements. These digital markers are routinely used by airlines to finely adjust their fares and prices. Once the airline is satisfied, the ATPCO distributes the finalized information across the industry. In other words, the data elements that are available as easily pluggable APIs help airlines to offer competitive prices while still attempting to profit from the operations.
Since airlines have always played extensively with airfares, the price dynamics has been an active endeavor that never ends. The price manipulation is quite evident from the constantly changing airfares. In fact, potential customers have long grumbled how quickly the airfares change or increase, sometimes even while they are contemplating the purchase.
NDC Exchange is a community platform created by ATPCO and SITA that enables API connectivity between #airlines and sellers using New Distribution Capability (NDC). Read the full story here: https://t.co/9L0vH39JOO pic.twitter.com/nzGgpAq0cc
— SITA North America (@SITANAM) July 23, 2019
Incidentally, it is these several of the 1600 different data elements that influence the final sale price of the air ticket. However, airlines never use all of the data elements as that would make the process extremely complex. Interestingly though, most of these elements matter to the passenger, noted Navid Abbassi, ATPCO’s chief architect. “It became evident that the bottom 60 to 70 percent of that stack — everything from air conditioning and power cooling up to racks and cabling, physical servers, memory modules, disk drives, storage processors — its bulletproof operation was crucial for our customers’ expectations, as far as reliability and availability of our applications. But they weren’t value-added components.”
What the ATPCO’s chief architect noted was that airlines needed several but certainly not all data elements. Moreover, airlines knew well which data elements matter the most, and could efficiently manipulate to optimize profits while still maintaining operational efficiency and customer comfort. Accordingly, the ATPCO has decided to shift to the cloud. The move will allow the company and the airlines to focus on the top of the stack of data elements. This would essentially allow airlines to fine-tune the process of deciding airfares. Moreover, the benefits of moving processes to the cloud, like big data analysis, blockchain, machine learning, etc. would also be a bonus.
ATPCO Opts For AWS But Will Leverage Both Public And Private Clouds In The Future:
The ATPCO is in the early stages of migrating to Amazon Web Services (AWS). However, once the data and the processes are successfully transferred to the cloud, the company could look at both public and private clouds to truly explore the benefits. Incidentally, Amazon’s enterprise cloud services platform or AWS was the first choice primarily because the ATPCO’s first acquisition in this space runs its services on the same. Last year, ATPCO made its first-ever acquisition. It acquired the eight-year-old firm Routehappy to supplement fare data with “rich content”. The content would include information about flights such as the plane layout, entertainment options, and food options. It seemed the ATPCO was adding more data elements which were gaining prominence for airline passengers. However, it has now become apparent that the company was seriously contemplating moving its operations to the cloud.
Routhappy already runs on AWS. Hence, the ATPCO might retain Amazon as its cloud services provider. Abbassi confirmed that the ATPCO prioritizes reliability, availability, and robustness while evaluating public cloud service providers. Interestingly, the ATPCO had once initiated a project which involved effectively “building a data lake for the airline industry to tap into to conduct time-sensitive analysis.”, revealed Abbassi. “In order to bring in the house a big data platform that could ingest that volume of data and let folks play with it required a significant upfront capital investment — a multi-million dollar investment. And since the value proposition was still a little bit of an unknown, we put that project on the back burner. And it kind of stayed on the back burner because we had bigger fish to fry and limited funds — we’re in the airline industry, we don’t get a free bag of money.”
Next Generation Storefront: How It Works, The Potential & The Hazards – Business Travel News – Next Generation Storefront: How It Works, The Potential & The Hazards Business Travel NewsUnder ATPCO's Next Generation Storefront initiative, carriers work with the air *content* i… pic.twitter.com/A7QKix6eCT
— Booking Adviser (@BookingAdviser) July 22, 2019
In short, Amazon’s services around big data and data analytics could help airlines immensely to quickly alter airfares depending on several internal and external factors without significantly impacting passengers, implied Abbassi. “As ATPCO moves to the cloud, it should be easier for the industry to experiment more with initiatives like dynamic pricing. The way in which the airlines build and distribute offers is changing rapidly, and this move really help us facilitate that.”
With the ATPCO’s core processes finally on the cloud, airlines would significantly gain from the vast amount of additional applications, solutions, and platforms that cloud service providers like Amazon, Google, and Microsoft offer. Some of the new technologies that the airline industry will immediately benefit from are machine learning and blockchain. Airlines could start conducting their own research and experiments within the Paas, Saas, and IaaS models using the huge amount of data to find out what works for them.