Modern Airline Retailing Outlook 2026

Welcome everybody to our first Tim Cast of 2026. In this episode we'll take a look at the state of modern airline retelling and what we can expect from 2026. I'm Daniel Friedley, CEO of Travel in Motion. Today I'm joined by Florian Danette of Roland Berger. Thanks a lot Florian for joining me in our January Tim Cast. Would you mind just briefly introducing yourself? Oh absolutely. So first of all Daniel, it's a pleasure to be here. Thank you very, very much for having me. Well I run globally the aviation practice in Roland Berger based in our Zurich offers. I always have to say I'm not a born and bred consultant. I spent 20 years in the industry predominantly with the Wolf Tansik Wubelvary as a position. Now my 70th year in the consulting industry extremely, extremely challenging and interesting. So topic we have today is one of the most important topics of what we're going to see in the next decade. So glad to be here Danny and happy to talk to you. Excellent. Thank you very much and taking that as a segue to introduce the topic quickly. Let me just do that. So modern airline retailing has been the focus of many airlines, CCOs, CFOs and the other executives over the past few years. It's been an area of investment for many of the tech vendors as well and a Travel in Motion has been really engaged with both the airlines and the vendor community. It's been super exciting over the past couple of years to see the progress and the collaboration in the industry for this whole initiative. We've been publishing different white papers for the past years to take the views on what snacks and the most recent published in November, which is kind of an experience. Outlook into this year into 2026. Further, I just published a blog article looking at the current momentum in the initial success. And so I'm happy to have Florian with me on today's blog to just talk about some of these topics. So Florian Rolandberger is involved in a lot of sort of C level executive decisions and conversations of the future of airlines in general and their strategies. How high do you and do these executives rate the importance of modern airline retailing in the C suite today? Daniel, this is a very, very good question. And I think it's a perfect question to begin with because a couple of years ago, modern airline retailing was purely with commercial, maybe a bit with IT, but it was not really on the strategic agenda of the C suite. And that has changed. That has really changed in the past, I would say, two to three years after pandemic. So what we see in more rooms today, more than airline retailing has absolute reach C level relevant. So airlines increasingly recognize this not at distribution program or an IT upgrade. It is really a shift in how they design price package and full-folded entire commercial proposition. And it touches revenue generation, customer experience, cost efficiency, and even an longer extend the organizational structure in particular if we talk on the latest stage about offer management. The C suite cares because modern airline retailing influences three strategic areas and that's competitiveness one, commercial innovation two, and of course future readiness. So when you look at how quickly retail expectations are shifting, by the way, in every industry, the leadership teams realize that they can compete with a 30-year-old legacy structure. They need flexible offer creation, real-time price saying, and of course they need a single order that works across the airline or the airline ecosystem even. So to come back to your question, yes, modern airline retailing is definitely on the executive agenda and not because it's a trend, it's because it's becoming a differentiator for value creation. Yeah, and I think it's interesting what you said just before that the executives and the airlines have to have to act and start to react because in my blog article, I call for a certain level of pragmatism from the airline. So more flexibility and agility combined with that real focus on driving the business value. And pragmatism, as we know, is not typically a key strength in our industry. You know, we've been trained to be risk-averse and be very careful, operationally efficient and safe. Do you believe that the decision makers can accept this level of agility and risk to master this big program? Very, very big question back. But so what we observe as Roland Berger in our work with the airlines and we across seedless across many transformation programs is that the mindset is already shifting. So the industry per se is natural risk of birth for very good reason and any airline puts safety first, right? But on the commercial side, they are realizing that perfection is not the target state. But value is and value comes often from iterative steps, not from a huge big bang moment if I want to say so. So your call for pragmatism in the article is absolutely spot on. Because if you ask me, airlines that succeeded that they are the ones that reduce the ambition level just enough to focus on the concrete outcomes, a specific offer use case or a modular architecture component or just a small revenue uplift, that creates confidence and the confidence is needed what you need if you want to de-risk the program. So finally, executives are increasingly willing to accept that control level of agility and risk. But on a scale from one to 10, the risk is higher value than the agility in my perspective. And I like that you touched on the business value actually. Because for us, that's really where this drives a lot of the interest or should drive it. We've created detailed business case for a lot of airlines with a lot of focus on cost savings that can be achieved. And some of these articles, so we have, I don't know, probably 20, 30 different areas. And some of them are maybe a couple of pennies per PB. Others are much more significant. But do you think that with a focus on cost savings that it should be a CFO driven initiative or should it say with a commercial business side to drive the revenues or should it be sitting the IT part of the business to focus on modernization of the technology? The short consulting answer is, of course, pragmatic all three. If you ask me personally, it should sit with the CFO. Because when we see what has arised from NBC into what will become now order management, order management will change the entire modern airline retail program the most. And that sits definitely at the end of the day with the CFO. Of course, you need all three capacity, but the CFO is the one who should be in the lead. While I fully agree that modern airline retailing charges revenue, it costs, it touches cost and takes a capability. So placing it purely under one function almost guarantees this or a non optimal outcome. But still, I would argue for the CFO because the CFO is essential. His transformation requires the investment discipline, the cash for visibility. And he needs to build a credible business case. And I think many airlines underestimate how much value sits in end to end order simplification and automation. So having finance or the CFO part actively engage adds not only clarity, but it also adds responsibility to the part of IT and commercial. I mean, of course, commercial should lead the definition of value. How offers will be evolved and how you do your pricing and how it becomes much more dynamic, how customer relevance increases and IT is the enabler without more than IT architecture. Nothing will happen. That's kind of a given rate. But the most successful airlines that treat modern airline retailing as a cross-functional initiative when shared ownership, finance, drive the ROI lens, commercial drives the business lands IT enables. it, but my personal perspective, the CFL needs to be in the lead and drives the entire transformation. So it's a CFO driven but an overall boardroom topic it should be. It's a boardroom topic, I fully agree, but at the end of the day you and I know it needs someone who takes the responsibility and again what's happened from the past to here, from from NDC to offer management, there is a shift from commercial to the CFO. And it's interesting that you touched on NDC just now because that's linked to my next question. I also has done a pretty good job in the past two, three years, especially since they put the consortium in place in evangelizing modern airline retailing and bringing the different players together. So you know we were in meetings with ground handlers and DCS system providers and airlines and the typical vendors that we have for the offer in the order so that they've done a better job in our opinion at least with than with NDC back in the day. And while those efforts are still ongoing, I also called on IOT and my blog article to kind of move from evangelizing to move more towards enablement. Where do you see IOT's role in the MAR transformation going forward? Now let me say first that Yata has done an outstanding job in creating awareness and alignment the industry around this vision. I mean, when they started back in 2015, 60 and there were only a few airlines and now it becomes has become a widespread topic and it's really industry leading a topic. And this was very necessary as a first stop and now with NDC it became much later. So there is already a significant improvement. The next chapter and I think this is crucial is all about enablements. So airlines need practical support, they need to stabilize standards, they need clear guidance on reference architectures, they need more tools to benchmark readiness and also more operational playbooks and support on settlement and also on regulatory and respect. This becomes more and more important. And I think to your question, Yata has a unique role in bringing stakeholders together. So the airlines, the vendors, the airports, ground tenders, regulators, whatsoever, you name it. And if they can help to reduce friction and implementation and accelerate the interoperability, which is quintessential in modern hell and retailing, then they will accelerate the industry wide adaptation dramatically. So this is where I see Yata's most valuable contribution in the coming years that they really need to step a hand and fulfill also this role. I think you and I share that same kind of call to action to IOTA because we need them and they're doing a fantastic job. And I think they just need to keep pushing pushing things forward. But Florian, looking at other industry players in the ecosystem, we have this fear that airports and ground handlers, why they were, while they were in initial conversations, they're quite shy in embracing this. Most likely, I'm assuming they don't see enough benefit from MAR for their own businesses and for their own processes. What would you tell them where their benefits lie? Or do you think they're just at the mercy of the airlines that want to change? And so they'll have to change? It's a super interesting question. I mean, we do a lot of work with airports and also ground handlers and then also players. So for me, the hesitation is, first and foremost, it's understandable, right? For many airports or ground handlers, the direct link to modern hell and retailing is not admitted obvious because their historical processes don't depend on booking or ticketing the same way like airlines do. But when we look ahead, the value becomes at least to me very, very clear. A single order record enables better operational predictability, which is super important for any ground handler or supplier as well as the airport. Real-time service information, more accurate passenger and baggage flows. So everything that drives operation in an airport and looks for few amount of intuition, that will help the airport and also the supply such as ground handlers. So that means less interruption, more efficient turnarounds, and for airport it means better source planning. It means more consistent passenger experience. So even though they're not simply at the mercy of airlines, right? There's real value for them, but it's sometimes even my personal experience is hard to explain the value to them because their lens is so different from the airlines. However, the industry needs to articulate these use cases very clearly and we need to incentivize also structure that reward collaboration. And I think this is where the ecosystem coordination becomes crucial and quintessential. And by time, I think both airports and also suppliers or ground handlers, they will learn that there is a lot of benefits to them as well. I hope so. I certainly hope that they don't feel that they're forced into this because that will never be the best outcome, right? So I hope they do see benefit and maybe it's something that we need to work on together to see how we can we can show the benefit for them. So let's talk about the technology vendors. At IOTAS WPS in November, we saw some examples of real modularity. So vendors working together to put together a best of breed solution, which enables the end-to-end flows. And that's across the whole, what we would call the digital retail environment. Many vendors were involved in a lot of these different use cases. One vendor was noticeably missing. Perhaps that was the one that has the most benefit from the status quo, which is basically the monolithic approach to the airline commercial IT ecosystem. But what are the considerations for airlines on how modular they should be, or if they should be modular at all and follow that more monolithic approach in terms of the vendor selection and how they put the different solutions together? Prison farmers, my firm belief is that modularity brings tremendous benefit. Agility, speed of change, we talked early about interoperability, freedom to choose the best of breed components, all this has enormous benefits. And what was said at the WPS? I mean, we also very incurring this example of modular ecosystem actually working in practice. Though that was very good what we have seen in Istanbul. However, modularity is not a religion. Let me state this very clearly, right? It's a strategy. And I think this is also where we came from. Some airlines will need a face approach where monolithic systems still play a transitional role. We talked about airlines or the industry is conservative. So sometimes it just takes a bit of time. And other airlines might go fully modular from day one. So the answer to your question is it is not how modular in my personal view, but modular when it creates value. And I think the value sometimes comes a bit short or short-sighted. If modularity would use time to market, if it proves innovation rates and then if it lowers integration risk, then absolutely. But then if it introduces unnecessary complexity and that happens, we both know then an integrated solution can make much more sense. So the answer depends on the airline size, the talent base and of course the airline's commercial ambition very clearly. So that in bottom line what matters most is having a roadmap that balances operationality with coherence. I fully agree. And that's what we don't totally see when we do our engagements as well. It's what the airlines are considering. It's how much more value versus how much risk am I trading off and how much risk am I willing to take or not in this transformation because it's such a big project with a lot of unknowns. Florian, I think no conversation can end without talking about AI these days. How do you see AI influencing what airlines do in the commercial space and do you believe that the airlines must consider AI as an integral part of the MAR transformation or is it too early and it's something that they can add on in the future state. AI is around no matter what. So AI for sure is also deeply connected with the logic of modern retailing. I mean, you simply cannot optimize offers dynamic pricing, customer relevance, servicing without machine learning or a generative capabilities. It simply doesn't work. So AI enhances forecasting. It improves the amount modeling, automatics, content creation, identified amenities in real time, supports also what I would call the next best action for customers. So therefore it plays a huge role in automating operational and financial processes within the order lifecycle. Basically yes, right? AI should be considered as an integral part of modern LN retailing. It's not an add on. I mean, AI is far too important, has to become a far too important part of it and also enables the beauty of modern LN retailing. So you can influence I'm not on a lot of things without AI, right? Of course it works, but you won't get the strategic benefits. And the real magic comes when the data foundation, the offer engine, the order record, and AI work really hand in hand together. When AI is able to build the bridge and at the end of the day optimize costs or drives additional revenue or additional services to the customer. That's all what we want. So airlines that combine more than Ellen Retelling and AI will certainly leapfrog the industry in both revenue and customer experience. And therefore definitely AI is integral part of modern Ellen Retelling. Yeah, I couldn't agree more. I think the challenge that at least that we have when we're working with airlines. Right now I think it's still somewhat hard to quantify that benefit of AI, let's say in in actual numbers. So how much cost does it save me in process X or how much additional revenue does it drive in process Y compared to not using AI. And I think that's something that we also all need to kind of work on and consider. But for now with that, I think it's time to close this month's Tim Kass. We're already over the allocated time, the 15 minutes, but it was an interesting conversation. So thank you very much for the excellent discussion and thanks to the audience for listening. You can find out more about traveling motion on our website at www.travelinmotion.ch. You can also connect with us on LinkedIn as well as connecting with Florian on LinkedIn and follow his pose from his Roland Berger perspective. Also look for the link to our profiles in the show notes. And additionally, if you haven't already done so, please subscribe to our podcast on Spotify. We appreciate your listens and your likes very, very much. Florian, thank you so much for this and appreciate having you. Hope we can have you on again sometime. Thank you very much. It was a pleasure to be with you, Daniel. And see you soon. Thank you. Bye-bye.