Approached within the context of the industry transition to Modern Airline Retailing with 100% Offers and Orders, the Business Reference Architecture provides airlines with a common language and a standardized framework for their business capabilities, as they adapt their organizations to the new context and its requirements.
By following the framework, airlines can improve customer centricity and drive profitability in a more efficient and nimble organizational structure.
Origins of Business Reference Architecture
In 2022, advanced airline implementers of the vision for 100% Offers and Orders came together as the Airline Retailing Consortium with the objective to accelerate the industry transition to Modern Airline Retailing (MAR).
The very first output of the Consortium's work was the release of a MAR Business Reference Architecture – a framework, agnostic to specific technologies, outlining the essential business capabilities that airlines need for an efficient distribution of passenger services, including Offers and Orders.
Since its initial introduction, the reference architecture has undergone reviews and refinements by the IATA Passenger Services Conference (PSC) Boards under the supervision of the Architecture and Technology Strategy Board (ATSB), resulting in the current version published as PSC Recommended Practice 1786a.
Today, the Business Reference Architecture framework helps airlines to strategically plan and engineer their Modern Airline Retailing transformation, while ensuring cohesion across all key functions and departments within the organization - from Distribution to Finance Management and IT.
When it comes to airline financial management in the context of the industry transition to MAR, the traditional framework applied by airlines proves inefficient and unable to optimally support the new 100% Offers and Orders paradigm.
With the future of Offers and Orders, airline financial management has the opportunity to gain efficiency and build fresh without the necessary workarounds of today. Today’s legacy and complex revenue accounting processes are not designed to effectively handle the diversified and dynamic revenue streams introduced by the changing needs of modern customers and made possible within Modern Airline Retailing.
In this context, the MAR Business Reference Architecture is particularly important, as it supports the critical roadmap that airlines need to align their financial processes with modern retailing practices (e.g., offer and order management, personalized pricing, and ancillary revenue). By doing so, they can gain efficiency, improve customer centricity, while also driving profitability in a highly competitive marketplace.
Airline Financial Management Framework for Offers and Orders
In 2023, the IATA Industry Financial Advisory Council's (IFAC) Airline Retailing for Finance Working Group developed the Financial Management in Offers and Orders Environment (v 1.0) with the objective to provide an overview of the need for a financial management transformation, alongside the evolving airline retailing transformation.
The document emphasizes the importance of redefining the financial management framework in line with future modern retailing practices and provides insights into the capabilities and integration requirements within the Modern Airline Retailing Business Reference Architecture.
It also outlines the impact of the transition to Offers and Orders on various financial management capabilities, including Customer Order Accounting, Partners/Suppliers Order Accounting, General Accounting & Revenue Recognition, Corporate Finance, Treasury & Risks, Enterprise Performance Management, and Tax Management.
> Explore the interactive Financial Management in Offers and Orders Environment (v 1.0)
The Business Reference Architecture describes the main capabilities needed to deploy the Modern Airline Retailing vision. It provides a starting point for airlines to build a modular IT infrastructure and is intended to support the move to a world of 100% Offers and Orders.
As such, the framework was built with IT principles of modularity, allowing also multiple IT providers to collectively offer an end-to-end solution for airlines.
Explore how the Business Reference Architecture helps gain visibility on the future set of capabilities that should be part of the modern airline retailing platform and informs the possible transition pathways for airlines to realize their modern retailing vision:
> Read the IT Provider Readiness and Airline Transition Pathways to 100% Offers and Orders white paper (released by the Consortium in October 2023)
The Business Reference Architecture framework provides also a valuable reference when devising the key principles, considerations, and business requirements to be taken into account by airlines in the procurement process of a modern and modular platform for airline retailing, based on 100% Offers and Orders.
The recent Consortium release "Retailing Platform Procurement Considerations", builds on the business reference architecture framework to outline the key functional business requirements by business domain and thus provide airlines with key consideration points for their procurement process of a modern and modular platform for airline retailing, based on 100% Offers and Orders.
> Read the Modern Airline Retailing Platform Procurement Considerations white paper (released by the Consortium in March 2024)