Travel Management Company (TMC) Business Capabilities Needed in the Context of Modern Airline Retailing

Introduction

Modern airline retailing, driven by IATA’s New Distribution Capability (NDC) and the Offers and Orders paradigm, represents a significant shift in the way airlines interact with their partners and customers. Travel Management Companies (TMCs), integral players in the travel ecosystem, must adapt to remain relevant in this transformative landscape. This whitepaper outlines the business capabilities TMCs need to thrive in the context of modern airline retailing, with a focus on providing a step-by-step guide for those starting from scratch. Additionally, AirBooking.com, a leading NDC-enabled platform, offers tools and support to ease this transition for TMCs.

Guiding Principles

1. Customer Centricity: Design systems that prioritize customer needs, enabling personalization and streamlined interactions.
2. Control of Data: Maintain secure, accessible, and analyzable data to ensure informed decision-making.
3. Offer and Order Centricity: Focus on offer creation and order management as the core functionalities of the TMC ecosystem.
4. Modularity: Build modular systems for easy updates and scalability.
5. Standardization: Adopt industry-wide standards, including the Airline Industry Data Model, to ensure interoperability.
6. AI-Driven and Data-Enabled: Utilize AI to enhance customer propositions, drive revenue, and reduce costs ethically.

Core Business Capabilities

Modern airline retailing requires TMCs to enhance and develop specific capabilities across three key architectural layers: Channel Management, Seller Systems, and Back-office Systems. Additionally, technical capabilities such as API Management, Aggregation, and Harmonization are critical.

1. Channel Management Layer

• TMC Front-Ends : Tools enabling staff to access and process airline offers.
• Chatbots and AI Interfaces : New communication channels such as WhatsApp and AI-based tools to interact with customers.
• Online Booking Tools (OBTs) : Platforms allowing travelers direct access to book offers aligned with corporate travel policies.
• Enrichment and Harmonization : Layers that harmonize content from various sources, ensuring consistency in offer presentation.

Practical Steps for TMCs with No Base in Modern Retailing:

• Start by assessing the tools your staff currently use and identify gaps in accessibility to modern airline products.
• Explore ready-made online booking tool providers that integrate with NDC APIs to avoid building from scratch.
• Consider third-party chatbot solutions that specialize in travel services to enable automated customer interactions quickly.

How AirBooking.com Can Help

AirBooking.com provides white-label solutions with customizable branding and seamless integration with NDC, GDS, and non-air content. Its AI-powered booking interfaces simplify adoption for TMCs.

2. Seller Systems

• Offer Management : Aggregates content from diverse sources such as NDC APIs and non-airline services. Harmonization at this level ensures streamlined offer displays.
• Order Management : Manages selected offers, integrating traveler profiles and corporate policies to generate seamless transactions. Synchronization between seller and supplier orders is crucial for efficiency.
• Payment Systems : Enable traditional and innovative payment solutions such as subscription models and lodge cards.
• Analytics : Tools for analyzing data from offers and orders to optimize strategies and deliver insights.

Steps for Beginners:

• Partner with aggregators or NDC-compatible vendors to gain access to airline content.
• Implement a basic offer management system capable of receiving and displaying NDC-based offers.
• Prioritize integration with commonly used payment gateways and corporate payment solutions.

How AirBooking.com Can Help

Through its dynamic content integration, AirBooking.com connects TMCs to over 200 airlines and 600,000 hotels, allowing TMCs to offer diverse and competitive options.

3. Back-office Systems

• Invoicing and Reconciliation : Automate financial processes for accuracy and compliance.
• Sales Reporting : Provide real-time data to stakeholders, highlighting adoption rates, CO2 metrics, and vendor performance.
• Duty of Care : Systems integrated with real-time trip details to ensure traveler safety and compliance.
• Fees and Commission Management : Manage fee structures, including transaction and ancillary service fees.

For TMCs Starting from Scratch

• Begin with a cloud-based back-office system that includes invoicing and reconciliation capabilities.
• Ensure the system supports integration with NDC and traditional sources for tracking offers and orders.
• Partner with providers offering duty of care services to ensure compliance and traveler safety.

How AirBooking.com Can Help

AirBooking.com’s end-to-end platform integrates with existing systems, offering tools like advanced reporting dashboards and automated financial management.

4. API Management and Harmonization

A robust API infrastructure facilitates integration across internal and external systems. Harmonization layers reduce the cost and complexity of managing fragmented content sources.

How to Implement

• Identify APIs most critical to your operations, such as those from airlines with significant volumes.
• Use open-source API management tools to start small and scale over time.
• Engage with NDC-certified aggregators to simplify content harmonization.

How AirBooking.com Can Help

AirBooking.com’s API-first approach simplifies integration, enabling seamless connectivity between TMC systems and content providers.

Transitioning to Modern Retailing

Operational Readiness

• Process Redesign : Adapt workflows to incorporate NDC and ONE Order frameworks.
• Capability Development : Invest in technology and training to support dynamic offers and order-based operations.
• Stakeholder Engagement : Collaborate with airlines, technology providers, and corporations to align strategies and ensure seamless transitions.

Practical Advice for New Entrants:

• Focus on one key area of process redesign, such as integrating an NDC API, before scaling up.
• Train staff incrementally, starting with understanding NDC standards and their application.
• Engage with partners who have experience in NDC implementation to avoid common pitfalls.

How AirBooking.com Can Help

AirBooking.com offers training modules and support for TMCs to implement NDC and other modern retailing frameworks effectively.

Technological Evolution

• Dynamic Offer Creation : Utilize AI and real-time data for tailored offers.
• Continuous Pricing and Bundling : Implement flexible pricing models and customizable service packages.
• Unified Databases : Consolidate traveler profiles, corporate policies, and offer/order records into centralized repositories.

For TMCs Without Advanced Systems:

• Begin with simple dynamic pricing tools offered by third-party vendors.
• Use pre-configured databases or SaaS solutions for profile management.
• Incrementally adopt AI tools for personalization as data volumes increase.

How AirBooking.com Can Help

AirBooking.com’s dynamic pricing and bundling engine enhances TMC capabilities by delivering AI-powered personalization and tailored offers.

Challenges and Opportunities

Challenges

• Integration Complexity : Aligning legacy systems with modern platforms.
• Change Management : Transitioning organizational structures and workflows.
• Data Privacy and Security : Ensuring compliance while leveraging customer data.

Opportunities

• Enhanced Customer Experience : Deliver personalized and seamless travel experiences.
• New Revenue Streams : Capitalize on ancillary services and dynamic bundling.
• Cost Optimization : Streamline processes to reduce overheads and improve efficiency.

Conclusion

The shift towards modern airline retailing is a transformative journey requiring TMCs to embrace innovative technologies and collaborative practices. By adopting the outlined capabilities and principles, TMCs can ensure their relevance and competitiveness in this new era of travel management. For TMCs starting from no modern retailing base, this document provides a foundational roadmap to guide their journey. By leveraging AirBooking.com’s expertise and technology—from NDC integrations to white-label solutions—TMCs can accelerate their transition effectively. Aligning with industry standards and leveraging data-driven insights will not only enhance operational efficiency but also create superior value for customers and stakeholders alike.