Tech will transform the way the airline industry retails travel: Mike Reyes
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Sabre’s Retail Intelligence suite, developed in partnership with Google, enables airlines to better understand how to price and package their offerings to increase revenue. Airlines are able to sell more personalised products and bundles based on unique traveller needs.
In an interview with TDM, Mike Reyes – SVP, Product Management – Airline Platform, Sabre, shares more about SabreMosaic, Air Price IQ, current and future trends in the aviation industry.
Travel Daily Media (TDM): Can you share in brief what modern retailing entails for airlines?
Mike Reyes (MR): Modern airline retailing (spearheaded by IATA) is all about meeting the increasing demands of travel supported by an offer-order model. The offer-order model allows airlines to sell more personalised products and bundles based on unique traveller needs. It also simplifies servicing, settlement, and the traveller experience.
Think about it in the context of retail shopping, whether in a brick-and-mortar store or an online retailer like Amazon. Amazon evolved from originally selling books to be a retailer of anything. Airlines want to follow that model and evolve from selling airfares and ancillaries in today’s limited way, to selling and servicing everything. They need advanced technology to do that, which is why we’re defining the future of modern airline retailing with SabreMosaic, our new offer and order retailing platform.
Our offer and order-based retailing platform will enable a new era of airline retailing. Airlines craft personalised travel experiences that extend beyond basic fares in the offer stage while travellers are empowered in the Order stage with the ability to easily book and service their entire trip through a more streamlined process.
TDM: Today, customers are looking for personalization, customisation, flexibility, transparency, ease of use and, of course, competitive pricing. How does Sabre help airlines as well as travel agents offer the same?
MR: Our intelligent retailing and modern distribution solutions consistently help our customers solve the complexity of today’s travel marketplace. Our multi-source platform has expanded, for example, to include low-cost carrier (LCC) content from 20 new airline partners. Sabre’s platform offers LCC, integrated NDC and traditional edifact content in one place, coupled with our proprietary functionality, APIs and business logic that we believe are best in class. This enables carriers to dynamically sell through agencies while, importantly, providing buyers the choice, transparency, speed, efficiency, and seamless user experience, across all channels, that best meet their needs.
Our Retail Intelligence suite, developed in partnership with Google, enables airlines to better understand how to price and package their offerings to increase revenue. Air Price IQ enables the dynamic pricing of airfares based on traveler and marketplace context; Ancillary IQ allows the dynamic pricing of ancillaries while Upgrade IQ gives travelers the ability to bid on upgrades pre-travel to generate upgrade revenue. We also recently launched Lodging AI to help travel agencies improve hotel attachment rates, creating additional revenue opportunities and providing travellers with more personalised lodged options.
However, Retail Intelligence is just the tip of the spear in terms of Sabre’s retailing capability. Built to function in both a PNR-based and offer-order world, the proprietary capabilities of Retail Intelligence serve as the building blocks of SabreMosaic and are already powering the retailing strategies for several innovative airlines around the world. SabreMosaic is a new open, modular, and cloud-native offer-order based retailing platform that harnesses the power of Artificial Intelligence and our partnership with Google to empower airlines to dynamically create, sell, and deliver higher-margin, personalised content to travellers, taking their retailing strategy into the future.
TDM: How do Sabre Solutions provide means for revenue optimisation, cost reduction and seamless efficiency for airlines?
MR: IATA commissioned a study by McKinsey that showed the opportunity in airline retailing is high, with a potential for an extra $40B annually. But technology must evolve to make these airline revenue opportunities possible. That’s where Sabre comes in.
We already have robust solutions on the market that are helping our airline partners every day to optimise their revenue, reduce costs and increase efficiencies, and SabreMosaic will enable airlines to move away from PNR-based models towards the modern retailing word of offer and order at a pace that makes sense for their business.
The name SabreMosaic was carefully chosen to reflect the key attributes of our modern retailing platform, with the term “Mosaic” emphasising the idea of creating something from diverse elements. Designed to meet the needs of full-service carriers, low-cost carriers, and hybrid airlines, SabreMosaic will enable a spectrum of airline retail strategies, ranging from traditional approaches to the most progressive and advanced retail optimisation techniques. SabreMosaic encompasses 10 new product suites – from offers and orders to settlement and delivery – as well as Sabre’s existing AI-powered Retail Intelligence suite and our NDC IT product. The intelligent, modular, and open design allows airlines to select the API-based offer and order solutions that best meet their immediate and longer-term needs and transform their operations at a pace that best meets their business objectives.
TDM: What are the main challenges that you are facing in promoting, marketing and sales of your Sabre retail products?
MR: The most powerful way to let our potential customers know about our products is through our travel partners who are already reaping the benefits. We have several future-focused airlines already using our Retail Intelligence suite and they’re seeing up to 20% revenue uplift in opportunities created by Sabre Upgrade IQ, up to 10% for Sabre Ancillary IQ and up to 3% for Air Price IQ.
As part of the development process for SabreMosaic, we collaborated with a community of leading airlines and are gaining significant traction in the marketplace. Customers are recognising the benefits of incorporating SabreMosaic’s AI-powered modules into their retail strategies. American Airlines, Virgin Australia, Air Serbia, and Oman Air are among the airlines that have recently highlighted their ongoing collaboration with Sabre to advance and excel in the new Offer and Order landscape.
TDM: How is AI impacting Sabre? What new trends are we likely to see in travel retail for airlines because of AI?
MR: It’s a virtuous circle: AI is impacting Sabre, and Sabre is impacting AI. For Sabre, ‘AI’ is not just a buzzword. Google’s AI and machine learning capabilities are already embedded in a number of our airline, agency and hotel products, largely around retailing, and Google AI is now powering our new cloud native SabreMosaic airline retailing platform.
To enhance productivity, we have introduced generative AI tools to approximately 800 of our software engineers during the first quarter of this year, and we expect this initiative to further accelerate our product development throughput and speed innovation.
For our customers, there are an infinite number of use cases we are looking at. There’s a tremendous ability to automate that which is manual today to enhance servicing for our customers, and their customers. GenAI also promises a very different search and booking process then we have had historically. But what is vital for any use case is that AI models have the data to learn at scale, and our customers have the technology they need to harness, understand, and use this data to increase revenue opportunities while adding value for travelers.
TDM: Research from IATA shows that international passenger traffic increased by almost 20% in March 2024 compared with the same month last year. What trends do you see in the global aviation industry for the rest of year and going forward into 2025?
MR: IATA said that “adapting the airline industry to the retailing world is possibly the most important transformational project of the next decade” and I believe the airline industry is at an inflection point right now. This industry is on the cusp of something big, and so is Sabre.
While IATA plays a critical role when it comes to setting standards and connecting industry stakeholders, to make this change happen, it really comes down to technology providers like Sabre and our airline partners. We’re on the leading edge of technology that will transform the way the airline industry retails travel.
The traditional way of selling flights and associated products has served the industry well for many years, but it isn’t fit for purpose in a world of modern retailing. We’re going to see airlines move through this evolution at their own pace. Inevitably, some will transition faster than others, but we believe tech transformation will create the biggest opportunities for those who adapt fastest – the innovators and early adopters. Sabre is at the forefront of giving them the tools they need to be ready for the new Offer-Order world. We’re now seeing the things we’ve been working on for several years come to life so it’s not a matter of whether change is coming. It’s a matter of when. This year, next year, and into the future, Sabre will continue to be at the forefront in leading this transformation for airlines. You can expect to see more AI-powered innovation, an increase in NDC and intelligent retailing technology adoption, and there’s much more to come with SabreMosaic. So, watch this space, and let’s see where we go next.
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