Order management in airline retailing

Airlines are learning something that retail companies learned years ago: selling items is not simply an inventory problem; it requires an end-to-end order management process. The airline retailing market has been relatively slow to embrace end-to-end order management, while all other industries have embraced it as part of modern commerce. Many airlines still manage booking and payment as separate entities without considering the value order management brings to the entire process.

This article examines why order management matters for airlines today, explores the roadblocks preventing wider adoption, and maps out practical steps forward. We'll break down how airlines are beginning to think like retailers, what this shift means for their bottom line, and why the timing for this transformation has never been better.

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Traditional airline distribution model

The aviation industry constructed its sales methodology from a collection of loosely-linked systems that would make most retailers scratching their heads. Each step is designed to fulfill a certain function, but together they are so convoluted that it can be surprising we could ever complete the simplest task.

• Global distribution systems (GDSs) act as intermediaries between airlines and travel agencies, storing global flight schedules, prices, and availability. Travel agents log into GDS travel software to search, compare, and book flights for their clients. The system works, but it forces airlines to share revenue with multiple intermediaries.
• Passenger Service Systems (PSSs) manage the internal systems of airline operations. GDSs operate standalone seat allocation, baggage tracking, and gate change systems that can create sync issues, resulting in airlines having to manage passenger details on several different platforms.  
• The transition between paper tickets and e-tickets began in the early 2000s and delivered tremendous convenience to passengers. An electronic ticket contains all necessary flight details, passenger names, and fare conditions in digital form. By providing an electronic ticket capability, airlines saved the burden of printing and mailing paper tickets while individually reducing passenger exposure to the risk of losing a physical ticket. Nevertheless, an electronic ticket still adheres to an equivalent rigidity.
• Electronic miscellaneous documents (EMDs) handle everything that isn't a flight ticket. Airlines process extras like baggage and seats separately, hiding full costs and fragmenting bookings.

Passenger Name Records (PNRs) store all booking information for each traveler. PNRs contain critical trip details, but are scattered across systems. Updates require manual syncs, causing errors.

This approach to retailing distribution was very traditional and performed well for standardized offers. But for the modern industry, using numerous ancillary services, and in dare need of personalized experiences, these options were no longer viable.

The main pain points of traditional airline distribution

1970s-era systems are still often found in nowadays airlines, but they lack the flexibility that travelers crave. There are some issues in modern airline retailing due to the current situation:

• PNRs do not function like today's shopping carts. They are terms of travel with inherent rigidity for travelers: you create them with intent for the trip, for the passenger(s), and that unbending modality ends there. Want to add another traveler after the fact? Not possible for adults. Want to consolidate trips, thus the collaterals? Not possible. Each PNR is a single, discrete transaction, not a stackable pack.
• Airlines are disconnected: PNRs for reservations, e-tickets as payment, EMDs as all the little individually unneeded add-ons, etc., and the system devalues passenger consideration for a simple WiFi purchase and drops a document for it as well.
• Airlines pack all their offerings into 26 fare classes, like Y for flexible economy, Q for discount fares, and so on. The whole letter and code system is old hat, and forces the passenger away from individual arrangements and to packaged deals.
• Third-party products are not even a glimmer in airline retail. Legacy systems are only airline systems; hence, the carrier cannot sell a self-served hotel room, hire a car, or likewise airline-owned merchandise. The systems were created before infrastructure maturity for viable travel solutions extending beyond flights.
• When airlines sell through Global Distribution Systems, they hand over their pricing and presentation to intermediaries. The GDS constructs the offer, sets the display rules, and passes everything to travel agents and online booking sites. Airlines become product suppliers rather than retailers, losing the ability to create a brand experience.
• The entire booking process runs on EDIFACT, a text-based protocol. This ancient messaging system handles basic flight information but chokes on images, detailed descriptions, or engaging content. Airlines try to sell premium experiences through the digital equivalent of Morse code.

Traditional airline systems can’t cover the freedom that modern digital aviation demands with such outdated systems. But are there any positive changes now? Let’s figure out.

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How is retail in aviation changing?

For over two decades, airlines have begun the transition to modern retailing led by low-cost carriers (LCCs). LCCs are associated with unbundled fares, which allow the traveller to pick and choose the price they pay for travel from a myriad of extras such as baggage or priority boarding. The LCC model was so successful that it was copied by the full-service carriers, many of which use out-of-date technology to operate. Also, while airlines today claim to run their websites, those with dated systems have limitations.

IATA's New Distribution Capability is the first major technical development in many decades, and indicates the primary principle of NDC vs GDS, which will fundamentally change the way airlines sell their product. NDC replaces dated forms of airline messaging being sent in text format, with these messages now being sent in XML format, allowing for rich content and features like personalized offers and images. There is more transparency to what the LCCs can control, and they are able to present solutions bundling across any channel.

It is good to remember that NDC alone will not give them the tools to do modern retailing — the ability to turn customer data into targeted offers requires modern backend capabilities that many airlines continue to develop. While it is evident that there have been advancements, it is important to recognize that NDC is just the first step.

IATA's Modern Airline Retailing program has two main components: Retailing based on offers, and Delivering based on orders. The program has many practical tools, including the Airline Retailing Maturity Index, which will help carriers assess their readiness and identify capability gaps. To understand this shirt, you need to grasp the concept of "Offer and Order".

More on the concept of "Offer and Order"

IATA aims to create "Offer and Order" and share it with all airline carriers by 2030. The delivery side centers on ONE Order, which consolidates the fragmented world of PNRs, e-tickets, and EMDs into a single order reference that follows passengers throughout their entire journey. This moves airlines away from Reservation Booking Designators toward dynamic offer creation, while simplifying partnerships beyond traditional codeshare agreements.

The distinction between Offer and Order systems is similar to the difference between a grocery store and a restaurant. Current airline systems resemble grocery shopping with limited choices and multiple transactions. The new paradigm is more like a restaurant where the airline puts together a unique “meal” (offer) based on your preferences and serves the entire experience (order). You should no longer have to piece together multiple bookings to air purchases; you should have a single travel package that evolves as your journey proceeds.

Now that the phenomenon is clear, let’s see what order management in this concept means.

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What is order management in the airline context?

Airline order management systems function as a single system that oversees the entire end-to-end lifecycle of a passenger's purchase journey from booking to service delivery, replacing the fragmented systems of separate tickets, itineraries, documents, and records with a single order lifecycle.

Consequently, the transition toward order-based airline retailing ultimately indicates a step away from a ticket-centric modality. Network based carriers are now each delivering a sophisticated retailing model of airline services to customers through a complex series of partnerships with travel agents, airport based services, and other airline partners for each customer.

IATA's ONE study found that airlines, like railways, are moving from tickets to seamless order management. The "order" becomes the central thread, enabling personalized, end-to-end travel experiences.

Role of Order Management Systems in airline operations

OMS software is the central hub that orchestrates every step of the passenger journey through a specific workflow. It follows a structured workflow:

• When a customer searches for flights, the OMS creates a potential order record that tracks their preferences and behavior. 
• Once they make a purchase, the system generates a master order that consolidates all services - flights, seats, meals, baggage - under one reference number. 
• The OMS then distributes this information to relevant departments: operations teams receive passenger counts and special requests, catering gets meal preferences, ground services learn about mobility needs, and revenue management sees booking patterns. 
• As changes occur (flight delays, seat upgrades, cancellations), the OMS automatically updates all connected systems and notifies affected parties, ensuring everyone works from the same current information. 

This centralized approach eliminates the coordination headaches that plague traditional systems where departments operate in isolation, and presents a real transformation in airline retailing.

Understanding how OMS differs from traditional Passenger Service Systems reveals why this technology represents such a significant shift for airlines.

Difference between OMS and PSS

The distinction between Order Management Systems and Passenger Service Systems reflects the broader evolution of air retail in the aviation industry.

• Central focus. The order management system (OMS) software is focused on overseeing the entire lifecycle of commercial offers from creation and pricing purpose through fulfillment and service delivery support of the customer. The PSS platforms focus on completing operational functional tasks like; reservations, ticketing, departure and check-in functional sequences which will keep the flight leaving on time.
• Flexibility. OMS enables dynamic pricing and tailored offers that adapt to customer preferences and market conditions. PSS systems, by contrast, typically work with fixed fare structures and standardized service packages that limit customization options.
• Distribution. OMS integrates seamlessly across multiple touch points (e.g., websites, mobile apps, travel agencies, and partner platforms) ensuring all have the same prices and availability. PSS systems struggle to coordinate here, often creating pricing and inventory issues in different airline distribution channels.
• Data management. OMS holds a single source of truth for all customer interactions and purchase histories, allowing for complete analytics and personalized marketing. PSS platforms hold passenger information in separate databases that do not communicate well with each other, making it difficult to create complete customer profiles.
• Approach. An OMS considers all customer interactions as part of an ongoing relationship that continues beyond just one flight. A PSS is about individual transactions related to specific bookings and departure dates.

Airlines are increasingly using a hybrid approach: OMS manages offers and customer interactions while PSS manages core operations, together enabling dynamic pricing and reliable operations, bringing together retail agility and operational efficiency.

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How order-based systems work

To understand the mechanics of order-based systems, it's important to examine how they differ from traditional airline booking methods and understand their functionality and benefits.

Order-based systems vs PNR-based workflows

The airline industry is transitioning from PNR-based workflows that depend on multiple separate records: using a PNR to manage a booking, an e-ticket to manage flights, and eMD to manage ancillary services, to order-based systems that merge everything together into a singular record.

Since PNR-based workflows are reliant on multiple separate records, they involve significant duplication of data and cumbersome reconciliation procedures. These are legacy systems that form a crucial part of airline infrastructure that have evolved as far as they can, into changing technologies that are extremely difficult and expensive to change, but do not provide sufficient benefit to enable airline retail innovation, such as personalizing offers or bundling products that people expect travel managers to be able to do today.

Order-based systems drive airline retail innovation to leap forward because they remove duplication by providing a single and complete recitation of passenger information, ultimately making things much more accurate and significantly facilitating reconciliation procedures. Order-based systems embrace proven newer technologies, including XML, appropriate/multiple use APIs, simple to extremely complex personalised products, and sophisticated dynamic funding price management for operations.

Main features and advantages of order-based systems

Despite less than a third of airlines having taken substantial steps to develop offers and orders according to Accelya and Atmosphere Research Group, these systems can provide significant benefits for modern retailing and operational efficiency.

• Multi-channel order management syncs all sales channels — direct, mobile, and third-party — into one platform. This breaks down data silos and gives a complete customer view. With 91% of airlines recognizing the ability to generate additional revenue as a key advantage, centralized order management enables airlines to capitalize on every sales opportunity across all touchpoints.
• Automated order fulfillment handles the entire booking journey from reservation to check-in, managing seats, boarding passes, and service confirmations without manual work. This directly supports the 83% of airlines who believe continuous pricing will be important by 2028, as it enables dynamic adjustments throughout the customer journey.
• Real-time inventory visibility provides instant access to seat availability, ancillary services, and airline inventory across all booking channels. This prevents overselling and ensures accurate pricing information is always available to customers and agents. Given that 37% of flights experience delays, having real-time visibility helps airlines proactively manage capacity and rebook passengers more efficiently during disruptions.
• Integration capabilities connect order management systems with existing airline infrastructure, including revenue management, CRM, and operational systems. This seamless integration eliminates duplicate entries and reduces reconciliation errors that plague traditional PNR-based workflows. Airlines use these integrations to quantify customer value, which 81% identify as a crucial advantage of order-based approaches.

Order-based systems flip airline operations on their heads by creating a single source of truth for all customer interactions, enabling modern retailing strategies while dramatically improving operational efficiency and customer experience through automated, integrated processes.

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Best OMS software for airline retailing

The airline retail revolution is driving demand for sophisticated order management solutions. Here's how leading vendors are addressing this market need.

• Amadeus operates two major PSS platforms, Altea and Navitaire, and offers a dedicated Order Management System with ONE Order capabilities. Their system focuses on airline retail innovation with simplified booking flows and disruption management. Amadeus emphasizes gradual transition capabilities, allowing airlines to move to order management without disrupting current business operations.
• FLYR acquired offer-order management from Pribas and launched its comprehensive Offer & Order Management System (OOMS) in September 2024. Their platform includes order management, offer management, legacy translation, and product catalog components. FLYR enables Amazon-like shopping cart experiences and supports both airline products and third-party integrations like concert tickets and hotel stays.

• Sabre runs two major air retail PSS platforms, SabreSonic and Radixx, and offers order management capabilities with AI in airline industry applications. Their intelligent solutions focus on maximizing revenue and efficiency through multi-source content access and automated servicing. Sabre's approach emphasizes AI-driven insights to enhance retailing capabilities for travel agencies and airlines.
• Datalex runs an airline merchandising platform called Stellex Order Solutions that provides order creation, fulfillment, and servicing capabilities. Their system integrates with any PSS and offers real-time control through a cloud-based Digital Configurator. Datalex positions itself as compatible with existing airline systems while enabling seamless self-service experiences across all direct channels.

• Openjaw operates t-Retail OOMS, a comprehensive Offer and Order Management System that serves as an omnichannel platform. Their system handles shopping, merchandising, offer management, order management, payments, and servicing across direct and indirect channels. Openjaw has announced partnerships with Lufthansa Systems for end-to-end Offer and Order solutions, demonstrating real market traction.

These implementations show airlines moving away from inflexible legacy systems toward modern airline retail solutions. However, full OMS adoption remains a work-in-progress industry-wide, as building systems that integrate with decades-old mainframe infrastructure during operational disruptions requires careful engineering and realistic expectations.

OMS adoption options

Regarding the order management functionality of their airline retail strategy, airlines must make an important decision: whether to move to an entirely new order-based PSS or implement an OMS function on top of their legacy systems.

Order-based PSS migration involves switching to a passenger service system that combines inventory, reservations, and order management with AI-driven dynamic pricing capabilities. Available options include Navitaire New Skies for hybrid and low-cost carriers, Nevio by Amadeus, and TIK Systems PSS. All four systems maintain backward compatibility with PNR-oriented systems. Sabre is also developing its order-capable Mosaic platform.

OMS layer integration allows airlines to add order management on top of their existing PSS infrastructure. This approach enables modern airline retailing for specific products or sales channels while maintaining current PNR-based operations. PSS-neutral solutions include Datalex, Accelya FLX ONE, Astra by TPConnects, t-Retail NDC by OpenJaw, Retailaer, and PROS. These systems work regardless of the airline's current infrastructure.

Whether buying or building order systems, airlines all hit the same hurdle: messy legacy integrations requiring heavy technical lifting. At COAX, we specialize in integrations and tailored software development for the travel industry, as well as custom logistics software solutions for goods transportation via air, which help businesses scale and optimize workflows. Our services include revamping existing software, developing solutions from scratch, and integrating them with current infrastructure.

With proven experience in API integration, booking software development, and web and mobile app creation, we provide comprehensive technology solutions for airlines transitioning to order-based systems. Our expertise covers everything from web development and payment gateway integration to real-time data management and automated testing, ensuring smooth implementation of modern retailing capabilities.

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The costs behind OMS implementation

Airlines considering order management implementation guide must weigh significant costs against potential benefits. The complexity goes beyond simple software purchases.

• The costs associated with data infrastructure can double or triple as airlines increase their transaction volume driven by NDC adoption, increasing distribution through meta-search platforms, and taking over functions that GDS providers provided previously, as cloud hosting, data storage, and processing power now belong to the airline. Airlines will need well-designed APIs that will stand up to extreme transactions at peak times without a noticeable drop in performance.
• The costs to integrate systems are the largest expense to airlines. Modern order systems are crowned with the expensive requirement of custom coding to integrate with legacy PSS and GDS infrastructure. Integration can often reach a cost in the millions. Legacy systems were never constructed to meet the modern airline distribution landscape, creating a pile of technical debt that just builds up over time.
• Adaptations of personnel require more than simply training airline teams on new systems; it requires countrywide redesigns of workflows. Transitioning from legacy systems to orders requires a training overhaul and time to adapt across departments and teams: revenue teams need to learn how to implement dynamic pricing, and agents need to learn new toolsets with productivity impacted throughout the change process.
• Ongoing operational expenses include software licensing, system maintenance, and technical support that can consume a significant budget annually. Unlike legacy systems that remain stable for years, modern order management requires continuous updates to stay competitive. Airlines also face risks from implementation delays that can disrupt operations and damage customer relationships.

The key to managing these costs lies in phased implementation rather than complete system overhauls. Airlines that start with specific channels or product categories can learn and adapt before expanding to full order management capabilities.

Long-term ROI

While OMS implementation costs are substantial, airlines must evaluate success through Return on Invested Capital (ROIC), which measures how effectively capital generates profits. 

The formula ROIC = (NOPAT/Sales) × (Sales/Invested Capital) shows that modern airline retailing creates value through both higher margins and improved asset utilization. Airlines investing in order management systems typically see ROIC improvements through increased ancillary revenue, reduced distribution costs, and better inventory management.

The airline retailing market offers sound financial payoffs for organizations that are quick to innovate. Airlines that employ advanced supply management practices are generating more ancillary revenue per passenger and also driving down distribution costs through growth in the direct channel. The improvements impact the return on sales elements of ROIC, recognizing that fuel cost, labor, and maintenance are not highly elastic while revenue per passenger rises to a similarly differentiated revenue stream with the most personalized offers for the buyer through price discrimination.

Travel industry software investments in order management typically achieve positive ROI within 18-24 months for airlines that execute phased implementations effectively. The capital productivity component of ROIC improves as airlines maximize revenue from existing aircraft capacity through better demand management and pricing optimization.

Successful cases of implementing airline order management

Airlines worldwide are using order management systems to streamline bookings, boost ancillary revenue, and enhance customer experiences — here are some standout examples.

• United Airlines built an internal order management system to allow customers to rent a car, book a hotel, or buy a vacation package with their contracting alliance with Priceline. Their internal ordering system allows customers to bundle offers during or after the booking and has order visibility with travel agency bookings via NDC.
• EasyJet enables travelers to book accommodation, rent cars, and purchase package holidays through their website and mobile app, using Sopra Steria's easyRes airline retail solutions enhanced by a 2022 partnership with Datalex. 
• LATAM uses the most third-party partnerships, from Booking.com to Rentalcars.com and provides a complete miles redemption service for items ranging from clothing to electric appliances.
• AirAsia provides order management through their AirAsia Move platform, enabling customers to manage bookings via website, mobile app, or chatbot while selling hotels and tickets for over 700 other airlines. Air Europa has designed its website with a customer focus, organizing the best prices and offers by travel type and seasonal campaigns.

• Allegiant Air offers bundled packages including flights, hotels, car rentals, and tourist attractions under Allegiant Vacations, showing how ultra-LCC carriers use order management for ancillary revenue. Ryanair uses Navitaire's platform for reservations and ancillaries.

Want to replicate this success without vendor dependency? COAX can help you build a custom order management solution, tailored web and mobile platforms with seamless integrations of flight API solutions. We deliver only the functionality you need, avoiding bloated systems. Let’s create a streamlined, scalable solution that drives revenue and enhances customer experience, just like these airlines did.

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FAQ

What is NDC in travel?

NDC (New Distribution Capability) is IATA's XML-based data exchange standard that gives airlines the capability to distribute rich and ancillary services beyond traditional Global Distribution System (GDS). According to a study published in the Journal of Air Transport Studies, NDC addressed the airlines' need to reduce distribution costs, the most expensive component of airline costs, while creating product enhancement, personalization, and designing accessibility for customers that earlier GDS technology could not provide.

What does OMS stand for in airlines, and what is their potential for the airline retailing market?

OMS stands for Offer and Order Management System, which is an airline modern retailing integrated solution to support flights, ancillaries, and third-party services. According to McKinsey's research, airline retailing could reach $40 billion by 2030. Nevertheless, a 2024 report published by Travolution indicated that only 27% of airlines had begun the Offer and Order transformation, while 72% are aware there is a need to transform to an Offer and Order model. Recently, there have been more airline partnerships established utilizing the technology, such as Air Europa integrating with Retailaer's OMS.

What's the difference between GDS vs NDC specifically for modern airline retailing?

GDSs provide static product catalogs with limited personalization, but NDC offers type shopping with dynamic offers and rich content (like Amazon does). As stated in Atmosphere Research Group's 2024 study, 66% of 78 airlines have implemented NDC for general merchandising. The Red Launchpad by Sabre is a transitional product that sits between the traditional GDS and the Nudging-enabled NDC.

Can airlines use an air retail OMS with existing systems?

Yes, and it’s necessary, as airlines are experiencing PSS-based limitations (no dynamic pricing, constant vendor lock-ins). In research conducted by Accelya, only 3% of surveyed airlines rated their PSS as "excellent" at digital retailing (FLX-Disrupt 2018). So the solution is to treat the PSS as a series of modular business capabilities, using the Over the Top (OTT) model. Airlines will keep their existing PSS backbone, but can now introduce air purchases engines that include flexible product creation and dynamic pricing.

Do low-cost carriers need OMS more than legacy airlines?

LCCs have a greater need to adopt airline retail innovation because of a disconnect in cost advantages: as shown in McKinsey's analysis, post-pandemic, labor shortages overall increased LCC costs at double the rate of legacy carriers. At the same time, OMS will allow LCCs to dynamically price ancillary fees and build personalized offers, thus restoring the advantage that LCC brands once had over legacy carriers with a traditionally lower cost structure.