Oliver explains: what are Delivery Status Codes?

Hidden in the depths of IATA’s library is an obscure document called “PADIS 18.2 – Enhanced and Simplified Distribution (Implementation Guide)”. If you have not heard of it, you are not alone. But for those interested in the future of Pricing & Revenue Management, or Modern Airline Retailing, it contains essential knowledge. Specifically it defines a series of “Delivery Status Codes”. These show how delivery of a traveller’s order is progressing. In today’s article I will be explaining what these are and why you need to know about them. Advertisement: This is the twelfth in my “Oliver explains” series. I take things that are either important tools in Revenue Management’s tool kit, sound a bit odd or seem complicated. Hopefully I will be able to make them sound simple. Some readers might find these articles rather basic. If that is the case for you, then don’t worry, more mind-bending analysis will be coming soon. If you are here to learn, or would like a refresher, read on… You can read the other eleven here: 1. Why is Business Class sometimes cheaper than Economy? 2. How do airline overbooking algorithms work? 3. How is airline revenue accounting data used in revenue management? 4. What is Revenue Integrity? 5. ATPCO fare categories 6. Why are some plane tickets so expensive? 7. How are plane seats created? 8. Why getting multiple quotes for flights does not work 9. Why is airline IT so clunky? 10. What is the difference between Load Factor and Seat Factor? 11. Why do busy flights not guarantee profitability? Why should Delivery be a priority for Revenue Managers? Offer-Order-Settle-Deliver is the four part codex of Modern Airline Retailing. First put together by industry think tank T2RL, the four parts are supposed to cover everything an airline needs to do retailing successfully. Airlines will make Offers to travel shoppers, who may then place Orders for a wide range of travel services. The services in an Order are likely to include flights but can also include non-flight elements. In many Orders these will be products traditionally associated with travel packages – think hotels, cars and insurance. But in others they may be other things a traveller needs, like restaurant meals, meeting rooms and bungee jumps. Once travellers have made their trip airlines will Settle with the third-parties. A large collection of technology stacks are being presented to airlines by their vendors, who all want a slice of the Modern Airline Retailing pie. It is not entirely clear why some large airlines are investing large sums in this unproven technology. Parkinson’s Laws of Procurement may apply: the time spent by airline boards deciding whether to buy something is directly proportional to how much the directors understand it and indirectly proportional to the budget required. So while the chocolate vs plain vs no biscuits in the Cabin Crew briefing room discussion consumes most of a meeting, the $200 million Modern Airline Retailing tech stack contract goes through on the nod. A large amount of discussion in Offer-Order-Settle-Deliver covers the first three. Offers are an extension of Pricing & Revenue Management. Orders complexify the arcane world of reservations and ticketing. Settlement expands Revenue Accounting. Vendors are keen to extend their existing market share into each of these areas. But Delivery is different. Delivery is not currently part of airline Commercial departments. It is the purview of Cabin Services, Catering, Entertainment and Aircraft Programmes teams. But under Modern Airline Retailing, Delivery will become critical. I will be publishing a free-to-download white paper for Accelya soon which covers this topic – an announcement will be made here when this is available. Delivery Status Codes are what turn Delivery into a commercial system When all is going well the Delivery Status Code will be one of the following: 1. Delivered , after which revenue should be recognised in Order Accounting and third-party suppliers should be paid 2. In progress , for example when a passenger is onboard a flight or staying in a hotel room 3. Ready to deliver , when a service provider is ready to deliver and consumption is imminent – for flights, this means that an aircraft is ready to board 4. Ready to proceed , showing the provider that they should prepare to serve the customer but some time is still expected to pass before consumption takes place, for example an airport desk opening to accept bags. These codes are more than just operational descriptions. They reflect strategic choices for airlines covering when partners can be paid and when revenue is recognised. They also create the source of truth necessary for audit and evaluation. Three Delivery Status Codes apply when services are not delivered for reasons outside of a traveller’s control: 1. Failed to deliver , for example when a flight is cancelled or a hotel unexpectedly closed – this status code reflects an issue with a product or service provider 2. Suspended , which means that an airline has decided to take further action before taking a decision on whether or not to deliver, such as when fraud is suspected Read more