Modern Airline Retailing (MAR) value pools: Filled to the rim or already mostly tapped?

MAR value pools: Filled to the rim or already mostly tapped?

The observable herd mentality among airlines launching into five-year and longer MAR transformation programs at a time when technological standards are still evolving begs the question of the motivation behind the rush.

Surely, the promise of abundant value pools just waiting to be tapped by MAR first movers and early adopters is one of the main reasons. But airlines considering whether to follow the herd, should first take a close look at each of the value pools, in terms of what is really required to tap a value pool and to ensure that value pool has not already been tapped by the airline itself or - worse - others.

As an example, consider the MAR promise of distribution cost savings. A quick look at some of the biggest airline success stories in terms of distribution cost savings will make it clear that full blown MAR is not required to tap this value pool. Case in point: Copa Airlines significantly reduced its distribution cost and lowered it's share of high unit cost GDS bookings via Amadeus, Sabre and Travelport from 70% to less than 15% in the space of two years, without a massive MAR transformation. It took Lufthansa Group airlines as the first movers considerably longer to achieve a similar effect, but it also did not require a full  MAR transformation.

Without a doubt: airlines need to modernize their tech stack and radically simplify their processes, products and services to ensure end-to-end digital transactable and serviceable. But to avoid a renewed case of buyers remorse like the one which set in for many airlines launching into NDC without a clear strategy and priorities, airlines are well advised to develop a focussed and prioritized strategy, what they are hoping to achieve when and what these goals require, before lunging into a fullblown MAR or OOSD transformation.