Amid growing customer demand for seamless, personalized booking experiences, most airlines remain stuck in outdated distribution models. As a result, they risk losing billions of dollars in potential lost revenue. That’s according to a new report from Accenture, “In the Retail-Led Future of Airlines, the Sky’s the Limit.”
The research, leveraging insights from 300+ airline executives, 3,000 travellers, and proprietary framework shows that adopting Offer, Order, Settle, and Deliver (OOSD) systems can boost annual airline revenues by 3-6%, thereby unlocking billions in untapped value for the industry.
Emily Weiss, senior managing director and global travel industry lead, Accenture, said: “Air travel should feel as effortless as shopping from your favorite brand—personalized, seamless, intuitive and enjoyable. Today’s travellers don’t just want to book a flight; they want an experience tailored to their needs … the perfect seat, a meal they love, a smooth transition through the airport. The best airlines will think and act more like retailers— using data to anticipate what customers want and build the capabilities to offer it at just the right moment. That’s how airlines will not only create and retain loyal travellers but also unlock new ways to grow and stand out in a competitive market.”
However, slow adoption of new distribution and retailing models means many airlines are leaving money on the table. It also highlights a widening gap between traveller expectations and airline offerings, as well as the financial and operational risks for airlines that fail to adapt.
Among other the key findings:
Customers choosing online travel agencies (OTAs) over airlines:
While airlines have long relied on traditional ticket sales and loyalty programs, today’s travelers expect personalized, seamless, and flexible booking experiences—a shift that has fueled the rise of OTAs and alternative travel platforms. Despite the introduction of New Distribution Capability (NDC) in 2012, adoption remains slow and fragmented, causing airlines to miss out on significant revenue uplift and customer retention opportunities.
- 71% of travellers prefer booking through OTAs rather than directly with airlines, citing ease of use, better deals, and bundled pricing.
- Airlines are losing control over direct customer relationships and missing opportunities for upselling and personalized engagement.
Taking a retail-led approach, could deliver in billions in additional revenue:
- Research shows a $14 billion untapped revenue opportunity highlighting the industry’s potential to optimize payment processes, enhance integrations and improve overall efficiency.
Industry lagging:
- Direct-to-consumer pricing, dynamic bundling, and personalized offers—already standard in e-commerce industry—are underutilized in aviation.
Barriers to adoption:
The slow transition to modern retailing models is attributed to several factors:
- Technological Constraints: 32% of airline executives identify outdated technology systems as a primary obstacle.
- Skill Gaps: 29% point to a lack of necessary workforce skills to implement and manage new retailing approaches.
- Data Quality Issues: 20% highlight challenges with data quality, impeding effective personalization and dynamic pricing strategies.
- Leadership Mindset: Notably, only 1% of executives consider leadership mindset a barrier, suggesting a potential underestimation of the cultural shift required for successful transformation.
