Introduction
The UATP Airline Distribution 2024 event served as a pivotal gathering for industry professionals, offering a deep dive into the evolving landscape of airline distribution. This year's focus was keenly set on the latest trends affecting airlines, the dynamic needs in distribution, and the breakthroughs in payment technologies and systems. As APEXX Global, our engagement in these discussions allowed us to both share our expertise and absorb invaluable knowledge, particularly in the realm of payment orchestration, a critical area for the future of airline payments and distribution.
Key Takeaways
Financial Optimisation is Crucial
The event shed light on the slim average margin for Airlines in Europe, hovering around 6%, underscoring the critical need for optimisation, especially through payment orchestration. Efficiency here can significantly impact profitability.
The Importance of Flexibility in Partnerships
Selecting partners who offer not just competitive costs but also an enhanced customer experience (CX) is fundamental and flexibility in payment orchestration is crucial. Flexibility and the ability to adapt to evolving needs stand out as key traits in potential partners.
Regulatory Landscape in Europe
With the introduction of PSD3 and the Digital Operational Resilience Act (DORA), Europe remains at the forefront of payment market regulation. These frameworks are set to shape future strategies and operations.
Persistent Topics of Discussion
Discussions around NDC, MOR, and APMs have been consistent over the past seven years, highlighting the ongoing nature of these key industry conversations.
Post-Covid Industry State
The airline industry has surpassed its pre-Covid performance levels, making year-on-year comparisons more relevant than recovery narratives. This shift in perspective marks a new phase in industry analysis.
Shifts in Market Share
Low-Cost Carriers (LCC) have increased their seat share by 3% compared to 2019, indicating a noticeable shift in consumer preference and market dynamics.
Operating Costs
Fuel costs now represent 29% of revenue, a significant portion that underscores the importance of managing this variable expense.
Changing Travel Patterns
The distinction between corporate and leisure travellers is becoming less pronounced due to the rise of remote work and flexible office schedules, leading to an increase in smaller, more frequent trips.
Panel Discussion: Balancing Customer Demand Against an Evolving Regulatory Environment
Our participation in the panel discussion offered a comprehensive overview of the challenges and strategies pertinent to balancing customer demands with stringent regulations. We delved into Europe's position as the most regulated payments market and the diversity of localised payment methods. A critical aspect of our discussion focused on the necessity of choosing the right partners. These partners are vital in navigating the complex payment landscape, ensuring airlines can expand their payment offerings intelligently.
A mantra that resonated strongly with our team was the emphasis on "Research, Research, Research." Balancing empirical data with anecdotal insights is crucial. For instance, while local preferences might lean towards specific payment schemes, such as Troy in Turkey, a data-driven approach reveals its limited market share and support, guiding more informed business decisions.
Summary: The Complexity of Travel Payments
The intricacies of travel and its associated payments are undeniable. With regulation as an unavoidable factor and customer experience as the ultimate goal, the selection of the right partner(s) becomes indispensable. The insights gained from UATP Airline Distribution 2024 underline the necessity for airlines to engage in partnerships that not only address the complexities of today but also pave the way for future success and innovation.
