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1、Sumati SharmaIris TaguetTim BourneTRANSFORMING AIRLINE TRAVELExploring Air France-KLMs journey to ONE Order Oliver Wyman and Air France-KLM2Transforming Airline TravelFOREWORDThe transformation of the airline travel industry has been set in motion,with the first wave of major airlines around the glo

2、be moving to adopt ONE Order.An industry-led initiative from the International Air Transport Association(IATA),ONE Order is intended to simplify airline reservation,delivery,and accounting systems,as well as enable new ways to conduct business.Last year,we shared a blueprint for how to initiate the

3、incorporation of ONE Order.(“How ONEOrder Can Revolutionize Modern Airline Retailing,”2023).This year,the second article in our series on ONE Order will challenge airlines to tackle the kind of real business transformation ONE Order canenable but doesnt necessarily guarantee without the right approa

4、ch.Achieving the world of enhanced business and streamlined order-taking that ONE Order promises isnt easy.It requires carriers to revise all their business processes,separately and holistically,but as important it necessitates a new way of thinking that leaves behind legacy knee-jerk responses.Each

5、 airline will have its own starting point for transitioning current processes,and each will define where they want to take their operations.As systems underpin airline business transformation,these targets for change will guide the development of underlying solutions,both by internal colleagues and

6、external technology providers.Air France-KLM and Oliver Wyman have been on the journey to ONE Order for several years at this point.In that time,we have begun to realize how significant value has been enabled,particularly regarding servicing,disruption,and revenue accounting.Weve been able to take i

7、nputs from outside the airline industry in a way that wasnt possible before given the level of constraints imposed by airline-specific systems.Given our success thus far,wed like to share our tried and tested methodology for making the transition with airline executives and ONE Order teams.Our objec

8、tive is to outline the impacts on our business processes and indicate where we are expecting gains.Were hoping this will help airline colleagues prioritize their own efforts.Were hoping Air France-KLMs model can serve as a clear and replicable approach for other airlines making the shift to ONE Orde

9、r.While every airline will need to tailor the journey to theirown specifications,here are three lessons we took away from the endeavor so far:ONE Order is a business-first revolution:Business transformation must be the top priority controlling the pre-defined business case and guiding technology dev

10、elopments.While a ONE Order business transformation has the potential to generate value across all processes,we expect to see the greatest gains in voluntary servicing,revenue accounting,and partnerships with other carriers.We would stress the importance of using a structured methodology including c

11、omprehensive business process mapping,a multiyear plan definition,and robust change management.Iris TaguetProgram Director,Modern Airline RetailingAir France-KLMSumati SharmaPartner,Transportation and ServicesOliver WymanThe industry is at a crossroads,and I believe we have huge potential to simplif

12、y how we do business for the benefit of our customers and people,but only if we truly challenge ourselvesIris Taguet,Program Director Modern Airline Retailing,Air France-KLMTransforming Airline Travel Oliver Wyman and Air France-KLM3WHY BUSINESS TRANSFORMATION IS CRITICALONE Order is the next logica

13、l step for modern airline retailing.While much has been said about technology and provider choices,some may lose sight of what is truly at stake in this adoption:ONE Order enables a fundamental shift in the way airlines manage their reservations.Such large-scale change also provides an unprecedented

14、 opportunity to transform operational workflows and improve overall efficiency.By adopting ONE Order,airlines can move away from legacy practices and instead embrace a more streamlined and customer-centric approach.This enables enhanced servicing across channels,which will in turn make travel easier

15、 for customers.By streamlining workflows,eliminating inefficiencies,and redesigning certain processes from the ground-up,airlines can achieve greater commercial agility.This shift is essential to maintain competitiveness in an evolving market,meeting the increasing demand from passengers for a seaml

16、ess travel experience,and making the airline industry more adaptive to future challenges and opportunities.In the transition to ONE Order,business must be first,and systems second:The target must be about how business should be conducted with systems supporting that transformation.Carriers should le

17、verage this transformative moment by leaving inherited inefficiencies behind.When shifting from paper to e-tickets,airlines initially limited themselves to four coupons per ticket because that was the maximum number that could previously be printed with carbon paper,replicating inefficiencies from t

18、he past.Lets avoid similar pitfalls.The transition to ONE Order is non-trivial and requires careful orchestration,as both processes and technology need to synchronize properly.The move from a passenger service system to an order management system must be designed to enhance business,not limit it.The

19、 objective is to minimize situations in which streamlined processes that support ONEOrders new business models would need to adapt and comply with what is technically feasible but economically suboptimal.In this context,we consider it essential to kickstart business transformation by evaluating the

20、current state and finding solutions that unlock the most value.This approach ensures that the transformation remains comprehensive and consistent across all business processes and starts off with a clear roadmap for the transition.Indeed,it is crucial that airlines precisely define the trajectory fo

21、r change to guide their forward movement and minimize all types of risks,including the risk of overbuilding the system with unnecessary elements.Oliver Wyman and Air France-KLM4Transforming Airline TravelWHERE AND HOW TO FIND THE MOST VALUEBusiness transformation isnt a vague concept or a catchy phr

22、ase,but rather a day-to-day improvement resulting in tangible value.For airlines to extract the most value,they should get prepared to recognize and unlock the latent potential.We have identified five fundamental ways the business transformation should translate into concrete improvements:Employee b

23、urden reduction:ONE Order transformation will lead to simpler and faster business processes that make them easier for employees to implement,whether theyre working on the ground,in call centers or in back offices.Enhanced online and offline interfaces will facilitate smoother operations and reduce m

24、anual workarounds.Simplifying processes frees up employees to enhance customer care.Time-to-market acceleration:In particular,ONE Order will allow new sales products to be tested and brought to market more quickly,allowing carriers to respond quickly to travel trends and customer demands.System simp

25、lification:ONE Order adoption will reduce dependency on legacy systems and streamline architecture,allowing the order management system to consolidate and enhance functionalities of multiple preexisting independent systems and eliminate bulky legacy-system workarounds.Exhibit 1:Estimated primary sou

26、rces of value from business transformationEmployee burden reductionTime to market accelerationSystem simplificationCustomer satisfaction increaseBusiness opportunities generationOfferLoyaltyOffer combinationPricingOrderInterline salesVoluntary servicingNon-air interlineDeliverySeam with DCSEvent dis

27、ruptionUtilization trackingAccountingRevenue accountingPayment and refundPrimary value generationMoreLessNot applicableSource:Oliver Wyman analysis Oliver Wyman and Air France-KLM5Transforming Airline Travel Customer satisfaction increase:ONE Order will empower carriers to offer new and more persona

28、lized services,thereby improving the overall customer experience.It will provide greater flexibility and allow for a wider range of self-servicing options.For instance,this might allow the cancellation of ancillaries without impacting the flight and the facilitation of immediate and automatic refund

29、s both major enhancements for customers.Business opportunity generation:ONE Order will also boost flexibility in rebooking and open new pricing opportunities,thus supporting new business avenues.Carriers will be able to respond more effectively to market demands and customer preferences.As carriers

30、identify their business transformation levers,they should leverage this work to validate their business case for adopting ONE Order.The high-level impact computed in the business case should translate into specific,granular benefits for each business process.If no clear improvement is expected from

31、the detailed business transformation target,it should be thoroughly reviewed versus the business case.Any potential disconnect between anticipated high-level benefits and day-to-day improvements should be identified and flagged as a risk.This approach ensures that the transformation is aligned with

32、the strategic goals and delivers tangible improvements across the organization.We believe that ONE Order has the potential to impact all key airline processes.While each airline will need to determine their own value pool,we have identified three examples of areas in which we expect notable changes

33、in line with business case priority levers:Voluntary servicing:refers to customer-initiated changes such as flight modifications or cancellations via mobile app,website,call center or customer desk.ONE Order will allow for improvements such as automated identification,a priori notification,and autom

34、ated transfer of items to a new flight with no manual work required from employees.It will also allow customers to self-service in most situations,with only complex cases being directed to colleagues.Revenue accounting:encapsulates all steps in sales consolidation and proration,revenue recognition,a

35、nd potential settlement with partner airlines,including rejections.ONE Order will enable the automated exchange of unified data between airlines,tracing changes in status for any order service item throughout its lifecycle and differentiating fares from surcharges and taxes.Moving forward,this will

36、provide more visibility and clarity starting at the offer stage and reduce the risk of any subsequent“rejection”of the reservation after a reconciliation process has been run.Partnerships with other carriers:refer to segments currently designated as“interline”or“codeshare.”ONE Order will break down

37、offerings into nuclear components with clearly defined characteristics,so that they can be fully shared between airlines for sales partnerships.ONE Order will allow carriers to directly push their product catalogue to partner airlines and eventually to customers.It will empower airlines to sell more

38、 ancillaries via interline or codeshare.ONE Order will also simplify order synchronization and information exchange between partner airlines.Oliver Wyman and Air France-KLM6Transforming Airline TravelMuch as the business case for ONE Order adoption varies widely across airlines,the areas where the b

39、iggest business transformation opportunities lie are to be determined on a case-by-case basis.As such,each carrier should assess where they anticipate they need the greatest impact,which will depend on factors such as maturity,IT infrastructure,and even geographical considerations.While we believe o

40、utput from every business transformation isunique,we have formalized a methodology to guide airlines through this journey.FIRST STEPS TOWARDS BUSINESS TRANSFORMATIONAll complex journeys require a compass and a roadmap:Only a tried-and-tested methodology will empower them to reach the full potential

41、of business transformation.We have identified five essential steps to help carriers plan ahead and navigate.Exhibit 2:First steps towards business transformationAlways simplify and set guiding principlesDefine and develop the future-stateprocessesChallenge hypothesesand control the business caseCrea

42、te the multiyear transformation planABCDBuild in change managementESource:Oliver Wyman analysisALWAYS SIMPLIFY AND SET GUIDING PRINCIPLESONE Order represents a generational opportunity to structurally change how airlines do business and it is critical that this opportunity is not lost which can lead

43、 to the creation of a“Today 2.0.”Airlines should start with setting their north star and making hypotheses on where the most value is within their organization.It will guide their creation of a process landscape,starting with the following considerations:Imagine how processes should evolve under ONE

44、 Order Identify which processes are expected to be the most affected and how At a high-level,verify whether main processes that are prioritized and expected to undergo main changes are aligned with business case directionThis is the step where most care should be given to selecting the team that wil

45、l drive this activity.Individuals need to understand the world of today but be sufficiently able to separate from it so they can appropriately challenge why we work in certain ways and whether that is necessary.In our experience,blank-sheet-first design is more likely to lead to a transformational o

46、utcome.But that blueprint must be grounded in the world of today to ensure success.A Oliver Wyman and Air France-KLM7Transforming Airline TravelExternal perspectives are highly valuable here.While the business of selling travel will continue to be highly differentiated,there are best practices to be

47、 understood from modern retailing methods used in other industries,especially in organizations that have established themselves in more recent times,unburdened by an existing legacy.While these perspectives are not the foundation,we have found them highly valuable in challenging the way things are d

48、one and have in parallel taken inspiration from certain aspects of these models.DEFINE AND DEVELOP THE FUTURE-STATE PROCESSESThe guiding principles need to be translated into process level to have sufficient detail to drive the activity of transformation.This also involves mapping the world of today

49、(to the extent that this doesnt exist already),primarily for two reasons:It will support the definition of activity by highlighting the“gap to close”at a detailed level It will validate some of the assumptions being made around potential upside and benefits from the transformational activityTo condu

50、ct the business process mapping,we recommend that the team in charge of business transformation engage in working sessions with process owners,experts,and other relevant colleagues.Using a step-by-step approach,they should precisely define:The existing process the“as-is mapping”where the core progra

51、m team lays out all process steps,associated teams,and required systems.This central team in charge of business transformation must start with defining a clear scope and level of granularity for each process they tackle.For instance,determine which level of depth should be investigated,breaking down

52、 into steps and sub-steps which part of the process to focus on,and identify which sales channels to tackle,as processes may vary.We recommend that the core program team validate the priority scope to focus on with the process owners and experts before launching the full business process mapping exe

53、rcise.It is then critical to engage with them along the way:they have been implementing historical processes for years or decades and must validate the latest snapshot of how things work.The target process the“to-be mapping”which,in addition to teams and systems,specifically focuses on highlighting

54、the gaps between existing and target processes.As part of this exercise,it is important to mobilize both experts of historical processes and ONE Order perspectives.Only by gathering these two profiles will carriers be able to envision the future while ensuring feasibility.This group must have the su

55、fficient level of seniority and creativity to challenge themselves and make the most of ONE Order:bringing in other team members to provide external challenge can also help with thinking outside the box and raising ambitions.Taking all these perspectives into account,the objective is to map a clear

56、target process,under a format like the existing one.The identified impact the nature and magnitude of impact from business transformation,including a quantified estimate and associated ramp-up.Teams should compare the“as-is”to the“to-be”mapping to determine the achievable impact,under any shape or f

57、orm.As described above,the main targets to aim for are reductions in the burden on employees from legacy systems,time-to-market acceleration,system simplification,an increase in customer satisfaction,and business opportunity generation.And teams should remain vigilant and ready to seize any other op

58、portunity that may present itself.BThe biggest challenge to overcome is not the system implementation but is in the people our entire organization atall levels needs to mobilize to make this a successStephane Vanovermeir,Vice President Distribution,Air France-KLMTransforming Airline Travel8 Oliver W

59、yman and Air France-KLMCHALLENGE HYPOTHESES AND CONTROL THE BUSINESS CASETo ensure the success of the business transformation,it is important for airlines to take a step back and critically evaluate the work accomplished.The end of a business process mapping wave is the right timing to do so,and thi

60、s is where we achieved a great deal by reacting to what we had found and continuing to refine and detail what the potential for transformation was.The main goal is for teams to assess whether the business process mapping serves the targeted ONE Order outcome and materializes the desired outcome.Once

61、 the objective is confirmed,the target business case impact should be deemed achievable.If not,then the business process maps need to be reconsidered closely.Additionally,teams should seize this opportunity to double-check that target processes are designed consistently and are all achievable in a O

62、NE Order environment.They should also pause and think about the key questions that arose from the latest mapping exercise,to be discussed internally,with technology developers or with peer airlines,as the answers may shape how they will conduct business in the future.Ultimately,it will be useful to

63、collect additional external perspectives at this stage:a set of fresh eyes and independent voice can point out potential disconnects between processes and further challenge the teams.CREATE A MULTIYEAR TRANSFORMATION PLANWith the completion of business process mapping and hypothesis validation,airli

64、nes need to develop a multiyear transition plan to guide the organization through the various stages of change.The first step must be to define a clear transformation timeline,prioritizing critical processes with high interdependency.It is essential to ensure that the necessary intermediate steps ar

65、e defined and scheduled,if business transformation is to take place consistently,and time must be given within the schedule for the change process to unfold.This plan must be realistic,with deadlines defined according to the magnitude of the gaps between“as-is”and“to-be”process mappings.Also,it is i

66、mportant to pay attention to how the program timeline will drive the cost and benefit flows.CD Oliver Wyman and Air France-KLM9Transforming Airline TravelAdditionally,airlines should carefully consider their management of resources for the transition to Order.We believe they should be aware of the r

67、esources they will require,with a specific focus on investments,people,and skillsets.Continuous monitoring and adjustment are essential.Airlines should implement robust tracking and reporting mechanisms,define key performance indicators and establish feedback loops to ensure continuous improvement.I

68、n addition,the program can consider a specific role in the organization tasked with realizing the business case value,so its not lost.Maintaining robust risk management review around this process is also important and transformation plans should include a framework for it,including a change-risk app

69、etite,governance mechanisms,and processes to better manage delivery risks.BUILD IN CHANGE MANAGEMENTWhile business transformation holds exciting prospects for airlines,it can also be unsettling for their employees.As airlines embark on the transition,they will revolutionize the way their employees w

70、ork,and make some ways of working obsolete.It is crucial not to underestimate the level of change management support required to engage with employees who have been trained in the old processes for years,if not decades.It is essential to support employees and stakeholders throughout the transition.T

71、his involves deploying some key success factors,including:Naming a colleague in charge of change and developing a comprehensive change management strategy that addresses the human side of transformation.We recommend the core team in charge of the ONE Order transition to maintain tight connections wi

72、th departments in the crosshairs of change to introduce the benefits of ONE Order,discuss main changes ahead and the path to get there,and stay in touch with affected employees at each step.Having resources dedicated to change will ensure no colleague is left behind in the transformation.Communicati

73、ng the vision and objectives of the transformation clearly and consistently to build understanding and gain buy-in from all levels of the organization.These should be translated into tangible target impacts so that teams can understand whats in the transformation for them.The more personnel internal

74、ize the target value,the more they will strive to unlock it.Sharing a clear roadmap towards ONE Order.A high-level multiyear roadmap will assist colleagues during the journey,and a detailed 12-to 18-month plan will set them inmotion.When changes come,regular updates and transparent communication are

75、 keyto maintaining engagement and addressing any concerns that may arise.Implementing training and development programs.Employees who have been used to the same technology and processes for years need to be equipped with the necessary skills and knowledge to adapt to new systems and ways of working.

76、Tailored training sessions and workshops can dramatically facilitate this learning process.E Oliver Wyman and Air France-KLM10Transforming Airline TravelCLOSING THOUGHTSOnce the decision to adopt ONE Order is made,the business transformation journey may seem daunting,with each and every impacted pro

77、cess needing to be reassessed,potentially redesigned,and re-integrated into operations.This comprehensive overhaul requires a meticulous,step-by-step approach that ensures alignment of business,technology,and processes.While the complexity of this task should not be underestimated,the potential bene

78、fits from streamlined reservation,delivery,and accounting make this endeavor worthwhile.As such,a critical key success factor to properly complete this journey is to dedicate the right full-time resources to business transformation:Airlines need to rely on people who are both knowledgeable about the

79、 business opportunities at stake,the underlying processes to deliver,and the supporting systems that are slated for change.These team members will be instrumental in defining the business processes of tomorrow,challenging hypotheses,and maintaining the momentum to drive the transformation forward.It

80、 will take a conscious effort to ensure that the baggage and limitations of the old terminology,processes,and ways of working arent carried over,as they might have been in earlier transitions,such as the move from paper tickets to e-tickets.Initiating the business transformation promptly will be ben

81、eficial and facilitate the overall journey towards ONE Order.Indeed,an early and proactive engagement will help with surfacing key questions to be addressed internally,with provision of a clear and tangible target to help with peer airlines and external developers,and with keeping eyes on the prize

82、to make sure airlines deliver the target improvements from ONE Order.Taking too long to make the first move will only delay the inevitable,as it may result in missed opportunities and increased costs associated with maintaining outdated legacy practices.By committing tothis transformation today,airl

83、ines will be able to unlock the full value of ONE Order.Transforming Airline TravelABOUT THE AUTHORSPRIMARY AUTHORSSumati SharmaPartner in Transportation and ServicesOliver WIris TaguetProgram Director ModernAirline RetailingAir France-KLMirtaguetairfrance.frTim BournePrincipal in Transportation and

84、 ServicesOliver WCONTRIBUTORSThe project team would like to thank the individuals who participated in the interviews that were the basis of this report,as well as those who informed the projects approach,supplied information,provided ideas,and reviewed drafts.Their support and insights were invaluab

85、le.Oliver WymanScot HornickMichael KhanCharles du PassagePaul-Emile JollyAir France-KLMAngus ClarkeStephane VanovermeirHerv ChangMarina DunionMARKETING,EDITING,AND DESIGNPat WechslerEditorial DirectorCheryl LaiSenior DesignerDaniela RomoDesignerChiara AzuaTransportation and Services Marketing Manage

86、r,Americas&Global LeadCarol BriggsHead of Marketing,UK&IrelandNadia EttrikiMarketing AssociateAlya MazurkevychMarketing CoordinatorAir France-KLM is a leader in international air transport based in Europe.With three key areas of expertise air passenger transport,cargo transport,and aircraft maintena

87、nce Air France-KLM is a major global player.TheGroup provides services to up to 300 destinations in 120 countries,mainly from central hubs in Paris-Charles de Gaulle and Amsterdam-Schiphol.The Group operates a fleet of more than 500 aircraft,which are divided between Air France,KLM Royal Dutch Airli

88、nes,and Transavia.In 2023,Air France-KLM transported 94 million passengers worldwide.Oliver Wyman is a global leader in management consulting.With offices in more than 70 cities across 30countries,Oliver Wyman combines deep industry knowledge with specialized expertise in strategy,operations,risk ma

89、nagement,and organization transformation.The firm has more than 7,000 professionals around the world who collaborate with clients to optimize their business,improve their operations,and risk profile,and accelerate their organizational performance to seize the most attractive opportunities.OliverWyma

90、nisa business of Marsh McLennan NYSE:MMC.For more information,please contact the marketing department by phone at one of the followinglocations:Europe Americas Asia Pacific India,Middle East&Africa+44 20 7333 8333+1 212 541 8100+65 6510 9700+971(0)4 425 7000Copyright 2024 Oliver WymanThis report is

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