In the last decade, significant shifts have taken place both in the way travellers search and discover their trips, and the ways the aviation industry has made its flight products discoverable.

Airlines have traditionally viewed direct bookings as only those that take place on their own site or app.  This current landscape disrupts the old world of direct or third party. 

How did this landscape shift? First apps came along, offering an even more direct solution than websites, and a route to customers that cut out the more complex world of navigating the major search engines. Since then, technology has moved at pace and more recently messaging, chat bots and voice platforms have entered the fray, bringing with them the possibility for brands to meet users and interact with them on the devices they use daily. Platforms like Facebook and Twitter take this even further, being both entrenched customer interaction tools as well as providing environments for air ticket deals to be pushed.

 The airline industry has adapted over the years to changing technology and the changes to distribution this causes.


The End of the "Sorted-by-price" Era

At the same time as travellers have experimented with new ways to discover trips, the airline industry has begun experimenting with more direct ways of presenting products to travellers. One carrier who has embraced the shift to mobile and even bots is KLM; the airline's CEO Pieter Elbers has even said he envisages a future where consumers do not visit its website. While most airlines have embraced social media to the extent that they now push air ticket deals via these platforms, some still have mobile experiences which offer more limited functionality than their sites and the majority are yet to fully engage with more cutting-edge platforms such as bots.

Right now we are witnessing a new generation of distribution which offers fundamentally different ways to purchase. While the amount of information available has increased in recent years, screen sizes have decreased (and may eventually even disappear) so only a very limited number of flight options can be presented. Most importantly, these new services are creating even fewer steps on the path to purchase, so airlines have consequently had to be innovative about how they distribute their tickets in this new online environment.

Skyscanner's Bot on Facebook Messenger

Concurrently initiatives like IATA’s New Distribution Capability (NDC) are pushing the industry to transform the way air tickets are sold to travellers, by allowing for integrations with more product differentiation and access to fuller, more dynamic air content, independent of the traditional GDS. Alongside this, many other platforms have been built offering APIs which connect deeper into airline distribution data, making transactions transparent and ticketing simpler.

The next few years will see a major update of the technical ‘plumbing’ of airline distribution – moving from pre-internet technologies to more modern ones, such as NDC among others. This will make it more transparent to the traveller what they are buying and allow intermediaries to show the differences between airline products beyond price and schedule. We will need to continue to test and experiment where and how the digital ecosystem of our intermediary partners meets our own digital ecosystem and how these two play together to provide a great experience for our mutual customers.
— Rogier Van Enk, VP Distribution, Finnair, March 2017


The New World of Distribution: Spectrum not Binary

While airlines have therefore traditionally viewed “direct bookings” as those that take place on their own site or app alone, this current landscape disrupts the binary world of direct or third party booking. There are now a whole host of platforms within which a booking can take place; a booking through social media, or on a voice platform, or in a chatbot messenger will feel fairly direct to a customer for example, but would these interactions be considered direct or third party?

What the current landscape looks like is arguably a spectrum, with direct distribution at one end, through to third party distribution at the other. At the third party end remains the OTAs and TMCs who are still heavily reliant on GDS, while at the direct end lies  Which points in the spectrum airlines choose to direct their distribution strategy towards will determine how things unfold; the way they approach new opportunities will be key, and will shape the future of airline distribution.