Why This Top United Airlines Exec Jumped to a Tech Vendor

Welcome to the second edition of the Travel Tech Briefing. I’ve been enjoying meeting several readers at Skift Global Forum this week.

• More on what I heard from Forum attendees in future editions of this weekly briefing.
• Today I wanted to talk about why a recent top travel executive switched companies during the Great Resignation.
• The story hints at how airlines are coping with “digital supply chains” that have become a mess. It also anticipates the type of “order” some industry executives want to impose on it all and gain an upper hand in selling.
• If you’ve been talking NDC, or the “new distribution capability,” here’s why you have to at least know about an emerging concept called One Order — whether or not you believe it will become real.

Tye Radcliffe, who had been United Airlines‘ top distribution executive, quietly hopped to a new role at airline software vendor Accelya.

• Radcliffe joined Accelya in late June as vice president of product strategy. The move required a significant shift in perspective — given that he had been director of distribution for United for years.
• Vista, a private equity firm, bought Accelya in November 2019 and has been funding its growth.

United’s revamped approach to distribution will debut shortly, Radcliffe said. 

• “You’re going to see United take off within a new distribution approach soon,” Radcliffe said.
• “The analogy is like when you’re building a new aircraft and it’s flight worthy and painted and you’re just finishing putting in the entertainment system and the seats to make it fully functional,” Radcliffe said.
• United wants to make sure it has the systems and workflows in place to let travel management companies “service” their clients’ tickets — meaning, be able to handle refunds or cancellations seamlessly — before debuting the new model, he said.

Radcliffe felt he could shape distribution’s future more as a full-time product person at this particular moment in the industry’s ferment.

• “Full disclosure: I really wasn’t looking for a new job,” Radcliffe said. “I love United, and I think what Scott Kirby is doing is fantastic, especially the work that he and the team are doing in the environmental space with carbon sequestration and new investment in electric aircraft.”
• But Accelya executives pitched the new position as a “once-in-a-lifetime opportunity to help reshape distribution for the airline industry,” Radcliffe said.
• “Accelya is bigger than many people realize,” he said. “When you look at revenue management, NDC, and revenue accounting, 50 percent of passengers boarded globally use one or multiple Accelya products.”
• “My passion has been in getting new distribution processes globally adopted,” Radcliffe said. He argued he can advance his cause more quickly by developing products at a vendor.
• “While I enjoyed my time at United, I won’t miss negotiating OTA [online travel agency] or GDS [global distribution system] agreements,” Radcliffe said.

Airlines are in a new phase of how they approach the “build, buy, or partner” question. “Partnering” has greater appeal as carriers emerge from the pandemic.

• “I believe it’s broadly true today across major airlines that if a project is going to require a ton of people to keep it updated and maintain lots of integrations, there is definitely an appetite to buy rather than build,” Radcliffe said.
• “At airlines today, even at one with a strong IT group that is passionate about building, their product and business folks will understand the complexities of a project,” Radcliffe said. “If it’s something you can just build and sort of set it and forget it — or just do maintenance on it, why not build it?”
• “When I worked at United, we absolutely could’ve built our own distribution API [application programming interface] if we wanted to,” Radcliffe said. “The building of a translation layer for our existing United APIs into the next-generation XML programming language wouldn’t have been that difficult.”
• “The hard part would’ve been onboarding all the partners. Also, keeping it updated, and taking care of all the bugs, and customizing when one partner uses it a little differently than the others,” he said.

The recent watchword among airline distribution executives has been NDC, or the new distribution capability — a term that has come to stand for adopting more modern data exchange methods and user interfaces to make selling airfares more like shopping on Amazon.

• Some airline groups, such as American, Lufthansa, and soon United, embrace NDC.
• Others, such as Delta, have been more hesitant —though Delta has been trying similar things like the “new airline storefront” via online booking services such as TripActions.

Radcliffe argued that the real energy is with a futuristic airline-backed project called One Order, which has larger ambitions than NDC.

• “Even if an airline executive right now is thinking, ‘Why should I be interested in One Order because it isn’t likely to really happen any time soon?’, they should still make sure they understand it because it’s the direction the sector is heading in,” Radcliffe said.
• The airline industry will replace the concept of a plane ticket, which functionally gets represented in computers either as a passenger name record (PNR) or an electronic miscellaneous document (EMD), with a new concept called an “order” that is more elastic.
• “To explain One Order to investment analysts covering the space, I would use the Amazon example, where consumers shop and have multiple items in their cart. They don’t have a ticket for each item in a cart because it’s all part of ‘one order,’ conceptually,” Radcliffe said. “The exciting thing for a corporate customer that buys travel is having a trip come in with one easy-to-read receipt and having the ability to pay for it with any valid type of form of payment.”
• “NDC has been about laying the foundation of modern retailing by becoming able to get content in front of customers in third-party channels via modern selling methods,” Radcliffe said. “But the next step is to start to chip away at those legacy barriers that stop people from really selling creatively. Once you’ve replaced a ticket with an order you’ve got the freedom to move farther faster.”

One Order, which is championed by airlines such as American and Lufthansa Group, has several “pillars.”

• Key topics include changes to how travel agencies shop for flights, how airlines go about setting fares, “offer creation” as a concept replacing today’s “availability calculation” and “schedule builder” concepts, greater revenue integrity through a modernized accounting and settlement process, and savvier business intelligence, meaning the ability to use data gathered across an airline organization in actionable ways.
• When airline folks come up with new product ideas, they have to really think through every system that will be impacted by the addition of the new product, Radcliffe said. That slows down the introduction of new products. They also have to check every channel they sell in to make sure each channel can display the product in the airline’s preferred way, such as with the correct pricing or branding attached.
• In theory, a change to a “one order” world would streamline all those processes.
• “For airlines, the behind-the-scenes benefit of a One Order world is that when you want to roll out a new product, you don’t have to figure out what ‘reason for issuance code’ you’re going to put on the EMD to fit the old accounting process, so to speak, to operationalize it,” Radcliffe said.

Some industry executives are skeptical about the chances of One Order seeing daylight anytime soon. Some others believe a top-down change led by airlines wouldn’t necessarily be in the best interests of the sector at large. 

• Meanwhile, analysts should expect more job-hopping by airline executives during the pandemic-related revenue crisis.
• Investors should also expect to have to learn new industry jargon after having taken some time in recent years to master the intricacies of NDC, or the new distribution capability.

One of Radcliffe’s proudest moments represents some of the overall trends in airline tech, regardless of the outcome of the One Order project.

• Radcliffe cited the example of United’s previously announced integration with TripLink, a product from travel-and-expense management software specialist Concur.
• After the integration, corporate customers using TripLink could capture corporate or other bookings that their travelers made on United’s or other channels and then have the data synced with their Concur account. That allowed for seamless expensing and monitoring for company policy compliance.
• “We were the very first airline to launch TripLink globally,” Radcliffe said. “I’m very proud of that. It was a heavy lift, and it touched so many parts of the airline, including the website, app, and shopping engine.”
• “We had to make sure that the private fares that the customer wants and the ancillaries that you’ve negotiated to be included are there — and that we could accept any given corporation’s preferred method of payment.”
• Radcliffe expected to see more projects like that continue at United.

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Please let me know your reactions to this week’s Travel Tech Briefing and email me your news tips at [email protected]. To share information in confidence, contact me on a non-work device via [email protected].