At the Amadeus Altitude25 conference in Lisbon earlier this week, Air France-KLM announced it would be joining three other airlines in signing for Amadeus’ Nevio technology. The airline group follows similar announcements from Finnair, Saudia and British Airways.
A new digital era for AF-KLM
The two parties described the agreement as “landmark” and paves the way for Air France-KLM’s entry into “a new era”.
Photo: Amadeus
Essentially, the new agreement will allow Air France-KLM to separate from its current legacy booking system, moving towards a more advanced and adaptable program. Angus Clarke, Executive Vice President and Chief Commercial Officer at Air France-KLM Group said:
“I constantly sit in meetings where you hear that we’ve got this 20-year-old system that we operate, that needs to close down and move to new architecture, and that’s going to be $5 million so these five millions rapidly add up to a lot of money.”
Air France-KLM’s investment will cost “north of €100 million [$105 million] once fully implemented.”
Photo: Dillon Shah | Simple Flying
The future benefits that Air France-KLM sees surround exciting digital developments. Clarke noted the evolution of the priority boarding offer, which could be offered even as little as just a few minutes before the flight.
“So you know in the future we can sell things like priority boarding as you’re walking to the gate. You’re going to have all the benefits around location services in the app that will show that if you’re 100 meters from the gate – and that maybe the data shows that the queue is a bit long in zones three and four – that maybe a customer who’s not otherwise entitled to it you could push, push benefits to say, why don’t you buy priority boarding for €11?”
For most airlines right now, priority boarding can be purchased up until check-in closes.
What is Amadeus Nevio?
Amadeus created the product, which is known as an offer-order solution that allows for the complete simplification of existing processes.
As Clarke put it, the order side provides significant cost benefits to the company while the offer aspect allows airlines to increase revenue. The migration to the new system will take “closer to six” years to complete, especially considering that it’s in its early stages of development.
Speaking at the conference just prior to the announcement, Meg O’Keefe, Senior Vice President of Airline Product Management at Amadeus, provided an example to understand the benefits of Nevio. On an imaginary trip between Nice and Brisbane (which requires a stopover as no direct flight exists), several factors come into play when attracting customers. In this example, the passenger in question is a loyalty member (and hence has a bigger propensity to spend).
“I get offered an excellent deal going to Brisbane and it looks pretty good to me; competitive. So I go onto your app and if I book now before the end of March for travel, by year’s end, it looks like I get complimentary lounge access across the overall route.
Photo: Dillon Shah | Simple Flying
So from a Nevio perspective, what’s going on behind the scenes is you’re constructing, in real time, who I am, what my needs are, my preferences, my wants, my benefits, my entitlements. It will give back the optimal trip proposal, including the right to fly on you, the retailer airline, including your partner airlines.”
“It will consider in real time the benefits that have just been offered because I have the complimentary lounge access across the route, it will give me the ability to have my tier eligible seat and bag, and propose to me a fast airport experience bundle comprised of partner content like fast track security at the airport as well as speedy boarding.”
Even beyond that, such a system can also include proposals such as visas, offered at the “optimal price” at the same page.
“In this way, we’re allowing airlines to differentiate, compete and optimize by selling more of the best, most profitable offers to the identified, targeted individual.”
