ATPCO Sets Course to Dynamic Air Offers

When Alex Zoghlin took the reins of ATPCO as CEO in January 2021, he set a goal of simplifying processesat the company. Has he succeeded? BTN transportation editor Donna M. Airoldi recently spoke with Zoghlin about his tenure as well as about news announced at ATPCO’s annual Elevate conference in October, including the new airline order posting solution to support dynamic offers—and the ability for the company to support 80 percent of all airline offers being dynamically created by 2026. An edited transcript follows.

BTN: When you joined ATPCO, one goal was to simplify complexity that had developed for customers to do business with the company. How have you accomplished that?

Alex Zoghlin: It’s still a work in progress, but I do think it’s getting better. Over half of our customers were using ATPCO in the most simple way possible, filing a minimum amount of fares and very infrequently. By this year, half of those airlines are taking advantage of more capabilities. Since I’ve been here, we have a user experience group that is five times bigger than it was two years ago. … [There were] programmer user interfaces where it took six months to learn the most basic thing in order to do anything. A lot of that complexity still exists, but the beauty is, how can you hide it so it still lets the airline into the system or the technology partner to use what they need? And we are doing that across everything. … We made the goals of some of the product groups to consolidate the systems to reduce the number of steps. To change your password, it was nearly impossible. While the rest of world has gone to auto-reset, even that was complicated. We fixed it; we are in the self-service world now. It’s a journey.

BTN: You announced your new airline order posting solution at Elevate. It’s in proof-of-concept.

Zoghlin: We have two major airlines signed up. The idea is, you can now try and do some trials in dynamic pricing. The problem is, if they did dynamic pricing before, they’d have a price point their systems might create, but that price point doesn’t exist in any of their other systems. If they went to exchange it, or do a partial ticket refund, or do revenue reconciliation, or interline it, none of the other systems would know how to handle it. This is really a way for airlines to jump out of the ATPCO world and start to do some learnings and understanding in that space. But then, if they actually sell something, whether through [New Distribution Capability] interface or direct channels, they can now send it back to us, and we will create a filing like it was filed with us in the first place. That way it is available to all their downline systems. An agent could do an exchange on it and just keep the ecosystem whole.

BTN: When might it move beyond proof-of-concept?

Zoghlin: We think by end of the year the first airline will be testing it.

BTN: How does it tie to corporate travelers or how airlines can service corporate clients?

Zoghlin: In some ways, it’s going to be really interesting for corporate customers, because today they do try to negotiate some of these ancillaries, and it starts to become easier. You can almost take anything a major carrier would offer. You could say, I want free Wi-Fi on all flights for my travelers. In today’s world, you can maybe try to construct something like that. It wouldn’t be in the fare; you’d probably have to pay for it, and there would be some rebate process. In our world, if you gave them the corporate discount code, it could dynamically generate what was agreed to, then file it back with us, and it could be managed by the airline and travel agency. It [could] open up a lot of opportunities for corporations that have very specific needs for their customers that the static world might not have been built for.

BTN: At Elevate, you said ATPCO would build the framework needed for 80 percent of all airline offers to be dynamically created by 2026. What percentage is it at now?

Zoghlin: We think we are at about 20 percent. About 11 to 15 airlines already are doing what we call adjustments. They still file with ATPCO, but then they modify at the time of purchase. Those are typically the larger airlines, which is why the volumes are bigger. It’s out there already whether people realize it or not. [Of that 20 percent], all of it is either NDC or direct. It really is because until there was an announcement between Lufthansa and Amadeus, there was not really a way for that dynamic content to get back through a traditional [global distribution system] except through an NDC interface.

BTN: What is the biggest challenge to getting it to 80 percent?

Zoghlin: The first one is it’s uncharted territory. There are a lot of carriers not using what is capable today. You can’t jump from static and filing a couple fares a week to dynamic-offer generation. If you do that with a customer, you have to fulfill that promise operationally. There are a lot of learnings that have to happen for airlines to get to the point where they can create the offer, not just technologically and mathematically, but [so that] it can be fulfilled in a way that their customers are going to be happy. That is an important piece.

The second is the way that these come to market today is still difficult. If we were to look at NDC for sellers, there are missing pieces. “OK, I can do NDC, but how is my back-office system? How I am going to do the accounting for this? How am I going to do an exchange?” it’s one of the things we are trying to commit to with these design groups. Let’s go solve those problems. There are a lot of ticket types not flowing through NDC today because those decisions and standards around how to do it have not really been set up.

BTN: Is servicing the most challenging part of the process?

Zoghlin: It’s one of the big four buckets that need to be worked on, but from our perspective what we want to try is to do as much automation on the servicing side as possible. Today, talking about taxes, they are 30 percent of the errors out there. If a travel agent has to do their own exchange and tax computations, they could be on the hook for all of that. We are trying to work with our partners, we have a whole revenue accounting group, we are partnered with [the International Air Transport Association] on taxes. How can we automate more of these things, so that an agent, a traveler, can do an exchange, an airline can do an exchange or a seller can? And it’s an automated process, and there isn’t the risk of a debit memo. It really comes from an antiquated time from a long time ago that really should have been fixed.

BTN: At Elevate, you announced that ATPCO and Airlines Reporting Corp. are joining their conferences next year. What else are you working on together?

Zoghlin: We are doing work with ARC around data. We are still a mainframe company, but we had goals to get our mainframe out of our shop by the end of this year. We have taken some of the things we are doing on the mainframe and we are working with ARC to combine it with some things they are doing in the cloud. [It will] allow us to move those things onto modern infrastructure a lot faster than if we were to do it ourselves. Then, going forward, we think ARC plus ATPCO from a data perspective can really help the industry go faster. We’ll see where it leads. I’m a believer that collaboration in the industry leads to more success.

BTN: You’ve said that you have to stop doing some things in order to start doing something new. What has ATPCO stopped doing?

Zoghlin: We have run and managed our own mainframe for the last 30-plus years. We will not be a mainframe shop anymore after the end of the year. Not that we won’t have things running on it, but we have completely outsourced it. We decided a third-party partner managing on our behalf was a much better use of our people’s time. Nobody got fired in the process; we have continued to hire. But people with institutional knowledge, I can now have them work on other things. … We also are moving out of our data center completely. We are going to a data-center-free environment by the end of the year. We are moving everything to the cloud. That means all those operational people that have all that knowledge of how all those things work can now go back and connect better with software developers and product folks, and I can get more of their time than just the care and feeding of equipment, which is where we were before.

Donna M. Airoldi www.businesstravelnews.com