Skift Take

Airlines need to work more closely with railway operators to fend off climate change activists. But they also need to test new technological ways of selling content from other suppliers. Let's think beyond joint ventures, codeshares, and interlining.

EasyJet and Deutsche Bahn began selling in late July combination tickets that include flights and rail travel, Skift has learned. The deal is notable for a behind-the-scenes aspect. Europe’s second-biggest discount airline is using a new method to sell the tickets from the German railway operator.

“It’s going to send shockwaves in the industry because rail is finally sexy,” said Ann Cederhall of LeapShift, a UK-based travel brand retailing consultancy.

Other carriers, such as Air France, Avianca, and Vueling, are also embracing this method to sell long-haul flights from other providers.

But rail is a hot topic. Airlines are paying renewed attention to rail partnerships after the French government required cuts to domestic flights in exchange for billions in state aid during the pandemic and Germany is looking at parallel steps in demanding minimum flight prices to discourage cheap short-haul flights. The countries want to encourage train travel, which is believed to generate fewer carbon emissions.

EasyJet’s move relies on partnerships involving application programming interfaces, or APIs, or data feeds that rail and airline partners can plug into, rather than use older, hard-coded systems that are often less agile. Software engineers in sectors such as advertising and financial technology have long relied on APIs. While airlines have used APIs for years for certain tasks, they have been slow to adopt robust, modern versions of this data-sharing tool to sell partners’ airfares, rail, and other content.

“The benefit of an API partnership is primarily cost savings,” Cederhall said. “With an API partnership, it’s just you and the partner splitting the money. No waiting for settlement three months from now. You avoid the fees a clearinghouse may charge for classic interline. You can spin it up in a few weeks to see if there’s demand, making it easier to test routes and see if customer demand truly exists — rather than waiting six or nine months via a traditional tech implementation.”

To be sure, more traditional methods of upselling passengers on rail still work, and they can be more seamless for consumers in some ways. German airline Lufthansa and Deutsche Bahn have in the past few months been expanding a formal commercial alliance that syncs their computer systems to enable long-distance flight passengers to seamlessly connect to select intercity train routes at its Frankfurt hub. Lufthansa Express Rail lets passengers need only one connecting ticket, with automatically rebooking in the event of delays.

But the premise is based on older and more rigid technology. Lufthansa Group’s Rail&Fly product, for example, makes it possible for travel agents to combine rail and flights in a single booking powered by Montreal-based vendor AccesRail. Travel agencies make the combination tickets through popular reservation systems run by the global distribution systems Amadeus, Sabre, and Travelport.

EasyJet’s Deutsche Bahn deal is the next step in a project begun in 2017 to allow passengers to connect with flights operated by other carriers. Currently, 16 carriers take part in the Worldwide by EasyJet offer, including Cathay Pacific, China Airlines, Emirates, Etihad, Singapore Airlines, and Virgin Atlantic. The connections at London’s Gatwick airport are typically available only for itineraries with a minimum 160-minute connection time because EasyJet won’t hold flights if a passenger’s first leg of a trip is late.

Other airlines are attempting to mimic the effort, selling flights and rail together using a new-ish method.

Seven other carriers join EasyJet in using Icelandic startup Dohop to handle their so-called virtual interlining as “host” carriers.

“We’ll soon be up to around 14 airlines hosting sales of other airlines’ flights once we have launched all of those that are in play,” said David Gunnarsson, CEO of Dohop.

Airlines Try Virtual Interlining

Earlier this year, Air France went live as a host offering combination tickets with carriers it doesn’t have formal interline or codeshare arrangements with via price-comparison search.

Vueling, a low-cost brand that’s part of International Airlines Group and especially present in the Spanish domestic market, is a Dohop customer, too. Some carriers, such as Avianca, Eurowings, and Transavia, have widely promoted their API partnerships offering in some markets but not in others.

In the typical deal, the startup helps the airline sell the combination tickets on their site and app, takes care of the distribution through metasearch such as Google Flights, and has a customer service team that handles consumer queries when travel problems arise.

“Widespread consumer adoption isn’t something that’s going to happen overnight,” said Gunnarsson. “There are still many factors that have to fall into place, including consumer education. But I really see the trend taking off over the next several years. We plan to launch more air-to-ground transportation links and airline-to airline-links in the coming months and years.”

Emirates and FlyDubai are another example, having deployed their own tech and worked with Dubai’s main airport to enable more cooperation. Several Asian airlines formed a “value alliance” years ago to enable cross-selling of flights, and one of the partners, Philippines-based Cebu Pacific Air, is looking to try other API partnerships, too.

Some airline executives continue to find the use of APIs for selling other travel suppliers’ content (outside of an affiliate marketing relationship) to be confusing. Some seem to mistake it for cross-selling, codeshare, interline, or a joint venture, according to some comments made over the course of recent Clubhouse discussions about growing revenue in travel.

Yet the “host” airline, or the one that markets the combination ticket on its own channels, doesn’t assume responsibility for the other airline’s service delivery — as would be the case in traditional commercial partnerships. The servicing of flight delays or cancellations because of operational problems are handled by a technology facilitator, such as Airsiders, Dohop, or Kiwi.com‘s business-to-business deals where carriers agree to take part in the bundling. Airlines simply focus instead on selling another’s product — taking inspiration, perhaps, from AirAsia’s early traction as an e-commerce company.

Some Controversies

More controversially, some online travel agencies bundle together flights for sale without the permission of carriers. These include Skiplagged, which has recently been caught up in litigation, as Skift has reported over its “hidden city” tactics that are a separate maneuver, and Kiwi.com’s online travel agency business, which some airlines have attempted to block commercially.

In the case of a flight-to-flight itinerary across two carriers, “self-connection” can become a problem if the passengers have checked bags they need to ensure make it safely from one flight to the next. For international self-connections, this typically entails passing through customs, collecting, re-checking luggage, and then clearing security checkpoints to re-board. Tech vendor Air Black Box has developed ThruBag, a product to help airports and airlines offer uninterrupted baggage transfer between any two airlines without passengers doing collecting and rechecking.

Airports see an opportunity in the rise of these trends. For a few years, Kiwi.com has been signing up airports to create relatively seamless self-transfers for tickets on airlines that aren’t formal codeshare partners, such as Prague’s main airport last week debuted earlier this year for people who buy tickets via Kiwi.com’s online travel agency, which is based in the Czech Republic and backed by private equity firm General Atlantic. These airports could sign deals to offer a similar service to EasyJet and other airlines.

Many Players in Airline Tech

Other players include Etraveli’s online travel reseller brands, Etraveli’s TripStack product used by agencies, and the Liligo.com metasearch brand of Edreams Odigeo. Save A Train, which calls itself the largest rail distribution service, said it also uses APIs to enable connections.

Before the pandemic, more than 70 million passengers worldwide self-connected by creating itineraries by buying tickets on airlines that didn’t have formal commercial relationships, according to research from consultancy firm ICF. That suggests an untapped audience.

In the meantime, other airlines besides EasyJet are likely to explore similar deals with railway operators as they attempt to cope with complaints about the carbon intensiveness of their operations while also seeking additional revenue sources as they emerge from the pandemic.

“I’ve always said that if you’re a long-haul airline, you really should consider expanding your uptake area at your hub airport,” Cederhall said. “If you have operations in a city like Amsterdam, why not tap into the onward connections that railways provide out of Amsterdam by selling combination tickets?”

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Tags: air france, air france-klm group, airline retail, airlines, airport rail, easyjet, etraveli, rail, startups, trains, vueling

Photo credit: Deutsche Bahn recently launched the Flughafen-Express, an airport express service run by DB Regio Nordost between downtown Berlin stops and Berlin's new airport (BER) Terminal 1-2 on behalf of the VBB (Verkehrsverbund Berlin-Brandenburg). EasyJet and Deutsche Bahn have begun selling combination tickets that include flights and rail using a new airline method, virtual interlining. Deutsche Bahn

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