Airlines have a greater urgency than ever before to move away from reliance on legacy airline systems which constrain them from offering the digital retail experience that their customers want and expect. These systems are built around supporting a trip rather than the customer, preventing airlines from offering a truly modern and customer-centric shopping experience. The airline industry has reached an inflection point with an accelerated need, and appetite, for true digital retail transformation that drives new revenues and an elevated customer experience.
Our leadership in, and vision for truly modern digital retailing for airlines, is now more important than ever before.
At Datalex, we are laser focused on the future growth of the company.
Our strategy is simple. We empower airlines to deliver a differentiated retailing experience that excites people to book their next trip.
As a challenger in the industry, where others see legacy issues, we see opportunity.
By delivering innovative and timely solutions to an industry in need of change, our aim is to achieve steady and sustainable growth for the Group over the next decade.
We estimate that Datalex's total addressable market will grow from $0.7billion in 2019 to $2.5billion in 2030.
Within that, we estimate our core market will grow from $0.7billion in 2019 to $1.3billion in 2030. We believe this growth of 86% is conservative based on current market conditions and that some key industry tailwinds will most likely accelerate this growth trajectory.
A large greenspace of opportunity still remains in our core market with 37% of airlines (on a passenger basis) still using an in-house booking engine[1]. The predominant airline strategy at present is to enable off-the-shelf solutions.
In June 2022, Datalex launched Datalex Pricing AI to target a market of sizeable opportunity in the area of AI-powered pricing. We estimate that this market is worth approximately $1.2 billion in size [2]. AI-powered pricing represents a significant opportunity for airlines that want to react in real-time to changing demand in order to maximise flight and ancillary revenue whilst also ensuring that they have as few empty seats as possible on every flight.
Legacy systems and processes result in airlines having to price within a limited number of price-buckets. With Datalex Pricing AI, airlines can capture anywhere between 3% - 5% of revenue that is currently being lost due to legacy constraints.
Growth over the next decade will be accelerated by:
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Growing passenger volumes – Benefits Datalex under its transactional model
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Growth in airline direct channel retail – Datalex Direct is designed specifically to boost revenue for airlines’ direct channel
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Growth in NDC channel distribution – Datalex NDC caters for the indirect channel of NDC (between airlines and travel agencies)
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Growing ancillary revenue sales – Datalex Merchandiser enables airlines to offer an extensive range of ancillaries and drive increased ancillary revenue by better contextualising and personalising ancillaries
Datalex’s SaaS product portfolio positions the Group for continued growth. To date, over $100m has been invested in Datalex's product, platform and technology.
Datalex’s products cut through legacy complexity to offer a superior digital retail experience across all airline channels - driving increased revenue and a greater customer experience. Investment in SaaS, AI and automation is helping to accelerate airlines’ digital retail roadmaps.
Our cloud-based product suite means faster delivery, faster sales cycle and compelling unit economics as we acquire new customers.
Datalex products can be used standalone or together with a lower total cost of ownership than building in house.
We are a trusted partner to some of the world’s leading airline brands.
Datalex works with airlines that do not want to standstill with legacy systems which can result in them having an out-of-date retail experience that falls short of customer expectations.
Datalex’s customer lifetime value is high with contracts typically being at least 5 years in duration. Retention of existing customers and acquisition of new customers is the primary driver for growth.
Our people are our greatest asset.
Their technology expertise and in-depth industry knowledge empower our airline customers as they digitally transform and roll out best in class digital retail experiences at a critical time for the airline industry.
Together, as One Team, with a strong culture of innovation and execution, we have achieved significant progress.
Our teams are passionate about transforming airline retail with our existing and future customers.
Sources:
[1] T2RL Digital Report, The Market for Web Passengers 2021, July 2021
[2] Datalex management estimate
[3] IATA Air Passenger Forecast, June 2022
[4] Travel in Motion GmbH, 2020
[5] IATA, Airline Retailing Vision for Offers and Orders, 2021
[6] Travel in Motion GmbH, 2020