What is Offer and Order Management (OOM)?

For the airline industry there are certainly exciting times ahead. We are at the precipice of a profound ideological and technical transformation, seeing a shift from fragmented legacy systems, towards a modern airline retailing model that will operate closer to other traditional retailing models, with just one offer and one order. This will be a much simpler retailing model than the current set up today operating with numerous ticketing reference numbers and codes. In the new world all customer transaction data will be consolidated into a single order record, streamlining fulfillment, servicing, and accounting across all channels and touchpoints through modern APIs rather than legacy EDIFACT protocols.

Making it real for you… you’re ready to take that well-earned break or fly for a business trip.  You book your seat, a meal and your luggage. All these elements combined will in the new world form part of your tailored Offer. Before, airlines used lots of different systems to keep track of your ticket and any ancillary items. Now they will be consolidated into one reference code meaning making changes, upgrades and cancellations will be considerably more straightforward than the current set up.

This ONE Order initiative is spearheaded by IATA with an ambitious roadmap in place; sending a clear message from the industry that there is an urgent need for a more streamlined personalised, efficient and customer-centric service for passengers. The industry timelines are looking to ensure that core capabilities for leading airlines are ready by 2026, expanded by 2028 to include next-generation Departure Control Systems, interline with Offers and Orders, and disruption management, with technical readiness for industrialization by 2030.

This means airlines need to be taking active steps now to achieve readiness in time to keep up with the intended direction of travel for the industry itself. Noting that the ONE Order programme is an initiative, not a mandate, but one which many airlines are looking to achieve in short order.

As you can imagine, moving to this new model, within these projected timescales, will involve an enormous effort on behalf of the industry, and contracting for this introduces a complex mix of legal risks and regulatory considerations that must be carefully managed.

What are the benefits of OOM?

The key driver of the new retailing model is the exponential benefits it will bring to the industry for airlines, passengers, travel agents, technology vendors and accounting providers, amongst other parties, with the key benefits being:

  1. Customer-Centricity: real-time servicing and personalisation across the travel journey.
  2. Operational Efficiency: reduction of reliance on multiple legacy systems and simplifies data flows.
  3. Revenue Optimization: facilitation of dynamic pricing, bundling, and upselling.
  4. Interline and Partner Integration: simplification of collaboration arrangements with other airlines and travel providers.

What are the key legal considerations and risk factors?

This is not just a technical upgrade—it’s a legal and contractual overhaul. Below are the primary legal risks to address:

  1. Data considerations – key importance and focus will be on ensuring that airline’s own and control their own data, and that given the consolidation of customer data into one single order, this will emphasis the need to ensure this is handled appropriately and robust data governance and access controls are in place.
  2. Revision of legacy arrangements – due to the move to the new commercial model; current GDS contracts will need to be reviewed and re-negotiated to reflect the future landscape including in respect of fee structures (see below), SLAs and service structures.
  3. Development of a new service – solutions for Offer and Order Management involve evolving technology platforms and functionalities that are being developed and created; therefore contracts will need to cater for this look forward approach. This will involve the inclusion of clear milestones / business outcomes to be achieved, pilot agreements for new services and provision for long term outcomes through collaborative working.
  4. Cloud based services – as vendors adopt more cloud based solutions in their approach to OOM, legal considerations will need to be had to existing contractual arrangements to address this transition.
  5. Transition and continuity of service – as airlines migrate from legacy platforms to new services there will need to be consideration of periods of parallel running of both systems for a period of time before full cutover can take place and the new system is up and running sufficiently. This will need both operational and commercial consideration to ensure no loss of service during this cutover period and to minimize any dual running costs and to implement a ‘jagged edge’ or ‘stage gate’ approach to cutover, on a service by service basis to the new capabilities.
  6. Consideration of regulatory compliance and certification – close consideration will need to be had in respect of IATA resolutions and certification requirements (identifying mandates v initiatives v guidance) and evolving industry standards.
  7. Commercial consideration for volume based pricing contracts – as the old payment profiles will disappear, traditionally priced on a volume of passengers / services received, new contractual mechanisms will need to be put in place to handle new pricing metrics to deal with one order and one offer. This will also need to ensure that for any periods of dual running of old and new systems, there is no double counting for volume based pricing purposes.
  8. AI deployment – where any AI technologies are used e.g. for dynamic pricing services the contract will need to ensure there are clear rights of IP and data ownership such that data is not used to train competitors’ models (and vice versa).  For deployment and use of AI capabilities in the OOM platforms itself the contract will also need to reflect the complexities brought to traditional IP and data clauses by new technology of this sort
  9. IP and lock-in – the agreement will need to set out clear IP and licensing terms and a vital exit strategy, handling data portability and avoiding vendor lock in.

Takeaway message

The move to Offer and Order Management and ONE Order represents a paradigm shift in airline retailing. While the benefits are substantial, the legal risks are equally significant. Airlines must adopt a proactive and strategic legal approach with their vendors to ensure a smooth and compliant transition.

If you want any further information or would like to discuss please contact any member of our technology aviation team:
Mark.Oconor@dlapiper.com Holly.Pearsall@dlapiper.com Mike.temple@dlapiper.com

About the Authors

The team’s recent experience includes advising a number of airline on its GDS/NDC capabilities including: Amadeus partners with British Airways on a journey towards enhanced retailing capabilities | Holly Pearsall