Amid growing customer demand for seamless, personalized booking experiences, most airlines remain stuck in outdated distribution models.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, titled In the Retail-Led Future of Airlines, the Sky’s the Limit.
The research, leveraged insights from more than 300 airline executives and 3,000 travellers.
It looked at proprietary frameworks that show adopting Offer, Order, Settle, and Deliver (OOSD) systems can boost annual airline revenues by 3-6%, which would mean billions unlocked in untapped value for the industry.
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 traveler expectations and airline offerings, as well as the financial and operational risks for airlines that fail to adapt.
It found that 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.
It also found that airlines are losing control over direct customer relationships and missing opportunities for upselling and personalised engagement.
The researched showed this amounted to $14 billion in untapped revenue opportunities, highlighting the industry’s potential to optimise payment processes, enhance integrations and improve overall efficiency.
It showed the industry is lagging. Direct-to-consumer pricing, dynamic bundling, and personalized offers – already standard in the e-commerce industry – are underutilised in aviation.
The slow transition to modern retailing models is attributed to several factors including technological constraints.
32% of airline executives identify outdated technology systems as a primary obstacle.
29% point to a lack of necessary workforce skills to implement and manage new retailing approaches, while 20% highlight challenges with data quality, impeding effective personalization and dynamic pricing strategies.
Notably, only 1% of executives consider leadership mindset a barrier, suggesting a potential underestimation of the cultural shift required for successful transformation
“Air travel should feel as effortless as shopping from your favorite brand – personalised, seamless, intuitive and enjoyable,” said Emily Weiss, senior managing director and global travel industry lead of Accenture
“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 travelers but also unlock new ways to grow and stand out in a competitive market.”
