In The Big Chair - Jim Davidson of Farelogix

Jim Davidson, President and CEO

Farelogix has attempted to put itself at the heart of both the debate and the technology surrounding the evolution of how air tickets and ancillaries are sold to passengers.

With a career spanning roles at OAG and Amadeus, the outspoken Jim Davidson is perhaps the ideal person to be spearheading a company now embedded in its role of trying to force changes in airline distribution.

You've been involved in airline distribution for many years, in various guises, so what would you consider to be the current "state of the nation"?

I believe airline distribution is finally morphing into a focus on matching the best offer an airline has at any one point in time, to a potential customer that is asking for an offer.

We are moving from the world of static to much more dynamic in how we "think" about interacting with the customer.

This is a big deal for all of us in the airline industry and will change this industry forever.

Would you say that the complexity of the mechanics behind the scenes means that any revolution in technology is inherently a slow and perhaps even unachievable process?

We are generally slow because that is how we have always been. The roots come from an industry that puts safety ahead of anything… and as a frequent flyer, I’m good with that.

The impact of this manifests through the airline organizations as a general culture of risk adversity.

Again, very understandable, but for those companies like Farelogix and others, we have to adopt and align our product development and selling strategy appropriately.

For example, wholesale swap-outs of technology rarely happens. While new technology products may in fact be revolutionary, the adoption by airlines tends to be more evolutionary in nature – often requiring connectivity to legacy applications that may be replaced over time.

This is a challenge for any airline that has been around for a while as they can be easily disadvantaged by a new airline that is not burdened with legacy technology and infrastructure.

We at Farelogix understand that we have to simultaneously live in two worlds – one of constant innovation and speed and one of practical deployment and integration.

Once we figured that out we became much more successful.

You have competitors, big and small, in the marketplace  - yet is any further so-called disruption likely to come from yourselves or those outside of the industry who are, arguably, not burdened by existing notions of how it should be done?

I hope so, because we look at disruption as a necessary ingredient to create new business opportunity. Otherwise, one becomes simply a provider of incremental value which is a lot less compelling for us and the airlines.

Airlines moving into merchandising was a great example.

Imagine if I told you five or six years ago that the airlines will be generating $50 billion to $60 billion of new revenue through ancillary sales.

Many people laughed. No one is laughing now.

With Farelogix a cheerleader for IATA's NDC standard since the beginning, you must be heartened to see an apparent turnaround in thinking by many of those who were originally against it?

Of course we are. And we are a beneficiary. But we also worked hard to help move the industry in this new direction of thinking.

From the beginning of direct connect, before IATA NDC, we believed that the airline should be the only one that creates, controls, and delivers the offer and value to the end customer.

That the technology intermediaries should be just that, technology enablers, not the business gatekeepers that they became over time.

The result was that much of the customer value creation was "outsourced" to these third parties that had their own set of value creation drivers.

NDC was essentially the enabler that, as you state, was the catalyst that got airlines thinking about a better way to engage with the customer.

And why do you think that shift has happened?

New revenue generation and improved customer loyalty.

It would be fair to say that Lufthansa shook things up a bit in 2015 with its GDS levy, and now others have followed suit. Will we see a flurry of other carriers coming on behind now?

I think it ultimately depends on how the GDSs respond over time. Will they really adopt and embrace the new way airlines want to create and deliver value?

From the beginning of direct connect, we believed that the airline should be the only one that creates, controls, and delivers the offer and value to the end customer.

Jim Davidson

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I think they will and we are seeing some real change at least in what people are saying (primarily GDS execs).

Once they embrace it, they will have the ability to really create new value for the airlines, as they will have all their talented people thinking of new products and services and innovative ways to create opportunity in this new distribution era.

Right now, all that innovative spirit is pent up in attempting to figure out ways to keep the status quo.

Thinking of the wider industry, how far are we away from bringing the concept of a Universal PNR (Passenger Name Record) to reality?

I think maybe we should talk about a universal order rather than a PNR. In my opinion, the PNR has really outlived its usefulness.

With the need to now manage content from multiple sources, ancillary products that are bundled with the initial offer, and a series of opportunities for add-on sales, we need to look to a more flexible system of managing data.

The challenge is how we transition to this based on what I said earlier.

Even this concept of a universal order, or One Order as IATA is calling it, will have to live in two worlds for quite some time.

It will, at times, need to look and act like a traditional PNR to interact with “PNR-dependent” systems, and at other times respond as a database entry with multiple updates and changes.

And shine a bit of light on you for us, as the boss - what is proudest professional achievement so far?

Helping to create a company that is so full of innovation and a drive to deliver.

Standing in front of a group of FLXers (what we call Farelogix employees) and seeing the truly global nature of this team and the solidarity of their energy is extremely fulfilling.

It’s absolutely amazing and it’s what keeps this company truly unmatched in terms of innovation in this industry.

How do you motivate your team?

They really motivate me. It’s about trust and confidence and the atmosphere of high expectation.

I look at it as giving people the opportunity to grow into their highest potential. We often talk about living on the outer edge of our thinking.

That’s where the great ideas are.

Are there any gaps in your knowledge of the wider industry, or even in the airline distribution space?

Of course. Lots of gaps but a strong willingness to keep learning.

I stopped pretending I knew everything years ago. It’s amazing how much I have learned since then!