The airline industry finally moves fares to the cloud
Purchasing a plane ticket can involve a seemingly endless number of questions, beginning with where and when you're flying. What airline will you take, and how much are you willing to spend on the fare? What will you pay for luggage? Are there blackout dates to consider? How many stops are you willing to make? Do you need wi-fi or meal options on the flight?
These questions could take you directly to the airlines, to a travel agency, to a fare aggregating site like Expedia or to an app like Google Trips. No matter where you end up, there's one company answering your questions -- ATPCO. For more than 50 years, the airline-owned company has collected and distributed fare and fare-related data for the airline and travel industry.
In the beginning, it was a manual process -- with a literal manual.
"We published huge books, they were several inches thick," ATPCO's CIO John Murphy said to ZDNet. "They had all the fares and tariffs, and travel agents went through those and they would hand-write out the ticket as they built the journey."
Since then, ATPCO has focused on automating that process and creating an environment that leverages the network economics of having one company that handles all of that data. It's a lot of data: The company manages more than 200 million fares for 460 airlines. Besides the airlines themselves, the business interfaces with travel agencies, search engines, global distribution systems and governments.
ATPCO began its automation journey about 30 years ago, but the complexity continues to increase.
"The number of dimensions airlines use to differentiate themselves," Murphy said, "and the amount of data required to accurately price an airline ticket has continued to grow."
ATPCO currently has something in the neighborhood of 1600 different data elements that the airlines can use, by way of APIs, to adjust their fares and prices before ATPCO distributes that information across the industry.
Last year, ATPCO made its first ever acquisition, purchasing the eight year-old firm Routehappy to supplement fare data with "rich content" -- information about flights such as the plane layout, entertainment options and food options.
Around the same time, ATPCO started reassessing its own IT stack.
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"It became evident that the bottom 60 to 70 percent of that stack -- everything from air conditioning and power cooling up to racks and cabling, physical servers, memory modules, disk drives, storage processors -- its bulletproof operation was crucial for our customers' expectations, as far as reliability and availability of our applications," said Navid Abbassi, ATPCO's chief architect. "But they weren't value-added components."
That's when ATPCO decided to make the move to the cloud, so it could focus on the top of the stack where it could add value for customers. The company is in the early stages of migrating to Amazon Web Services and ultimately plans to leverage both public and private clouds.
Routhappy already runs on AWS, and the cloud giant will very likely remain ATPCO's public cloud vendor of choice. The company's priorities for a public cloud provider were reliability, availability, robustness, Abbassi said.
By moving to the cloud, ATPCO plans on exploring ways it can leverage new technologies like machine learning and blockchain, exploiting the as-a-service model to find out what works for them. There are some obvious uses for Amazon's services around big data and data analytics, Abbassi said.
He recalled a project that ATPCO had to sideline about five years ago, which involved effectively building a data lake for the airline industry to tap into to conduct time-sensitive analysis.
"In order to bring in house a big data platform that could ingest that volume of data and let folks play with it required a significant upfront capital investment -- a multi-million dollar investment," Abbassi said. "And since the value proposition was still a little bit of an unknown, we put that project on the back burner. And it kind of stayed on the back burner because we had bigger fish to fry and limited funds -- we're in the airline industry, we don't get a free bag of money."
As ATPCO moves to the cloud, it should be easier for the industry to experiment more with initiatives like dynamic pricing.
"The way in which the airlines build and distribute offers is changing rapidly," Murphy said, "and this move really helps us facilitate that."