Inflight Retail:
GuestLogix Inc., the onboard retail and payment technology solution provider to airlines and the passenger travel industry, recently announced that it has partnered with in-flight entertainment and connectivity (IFEC) provider, Thales. The partnership involves the integration of GuestLogix’ Transaction Processing Engine (TPE) into Thales’ TopSeries® IFEC systems, enabling payment acceptance via seatback screens. Implementation of the joint solution will commence immediately with the first installation targeted for July 2013. The Thales’ customer-base will use the GuestLogix system for onboard payments without any need to retrofit hardware. The system features two big deals – a software solution for aircraft and access to GuestLogix’ Global Payment Gateway which enables secure payment processing anywhere in the world – ensuring each aircraft is able to accept payment regardless of origin or destination. Thales will also have access to certain components of GuestLogix solution such as its analytics platform that contains valuable business intelligence tools that can ensure airlines are maximizing their merchandising efforts onboard. Good stuff for airlines that takes the staffing and retail challenges away and provides airlines with a turn-key retail solution. And yes, the ground fulfillment solution for any post-flight delivery can be handled thru GuestLogix’ many partners. We should note that last year, GuestLogix signed
Panasonic to a similar deal that makes the global payment company the Big Dog in the industry!

GuestLogix will integrate and license its Transaction Processing Engine via Thales onboard IFEC systems to many of the world’s leading airlines. The software will capture payment information, transfer the information to an onboard server and securely transmit the data to the ground. The payment engine (software) meets the most stringent Payment Card Industry (PCI) validation as a payment application, and all ongoing maintenance will be handled by GuestLogix over the duration of the 10-year agreement. Interestingly, the ability to use fraudulent credit cards is on the increase and some circles peg the losses at 3% of sales, but it might be bigger. We note that the GuestLogix folks have a lot to say about credit card authorization and you can read about it here. Note that TPE will support both live and cached transactions at the seatback screen for items such as Pay per Access, onboard shopping and meals. No information was mentioned about duty-free, we note.

Through the company’s technology, airlines can open virtual stores in the sky that operate in a self-service model. For passengers, this means the convenience of purchasing entertainment, duty-free items, destination-related content (think theme park tickets and passes for events, concerts and local attractions), and food and beverage directly from their seats without having to order thru a flight attendant. For the airlines, this allows retailing to occur throughout the entire duration of a flight rather than a limited time when the Flight Attendant walks the aisle. “For the world’s airlines struggling to justify their costly IFE systems, this means the ability to offer passengers a much broader selection of content that can be immediately monetized, and streamlining their onboard operations to increase sales and ancillary revenues through their IFE systems,” noted GuestLogix CEO, Brett Proud. He estimates the deal will generate USD$350-500 million for the company over the next ten years, through a combination of software licensing and recurring transaction fee revenues. And that’s minor compared to what he believes the airlines could capture if they began to harness the power of retailing through these systems.

IFExpress asked a few questions of the successful service provider:

IFExpress: Regarding real-time processing of inflight duty-free purchases, how is payment validation made prior to a flight arriving at a destination? Is the validation/verification process the same as payments for BOB/non-inventory items?
GuestLogix: “It is the same as payment for any other type of product. If there is no connectivity, it is done in an offline/batch process where verification of a valid credit card happens on the screen and authorization happens on the ground through a batch transmission. If connectivity is available then real-time authorization happens at the time of payment.”

IFExpress: Does merchandise/content available though the onboard store vary from airline brand and aircraft?
GuestLogix: “Merchandising strategies differ from carrier to carrier but often remain constant within individual carriers regardless of aircraft type or destination. As we’ve seen many of our customers begin to integrate more strategic and dynamic merchandising strategies we are starting to see product offerings differ from flight to flight. For example, food selection is tailored to the destination to provide a more localized catering program. Or of course, destination-based entertainment or transportation offers are now providing more dynamic onboard merchandising.”

IFExpress: How is the merchandise “catalog” uploaded to the onboard store in an aircraft?
GuestLogix: “Product offerings are loaded into the back office which is managed by the airline and then transmitted to the aircraft when flight crew is opening the flight. The products are transmitted to the onboard server which then are accessible for browsing by passengers through the seatback screens.”

If you are looking to dig deeper, check out GuestLogix’ CEO as he discussed on Business News Network’s The Close, airlines must become global retailers in order to survive.

News From Gogo:

IFExpress got wind of a new development at Gogo so we traced down a story on a new development called Gogo Text and Gogo Talk that you should see at next week’s AIX Hamburg. It seems the folks with slide rules in the connectivity providers’ back room have developed a clever twist on voice and texting from the airplane, over their system. As you might remember, the Gogo system talks to passenger Wi-Fi equipped devices via their onboard server. By communicating to the ground via terrestrial VHF or via satellite, your email message enters the ground-based communication network via the Internet and with the aid of telcos and communication providers. Now, lets go back to the airplane. What if you were to load an Android or iPhone application that figured out that you wanted to text message a person on the ground, and after a proper “handshake” with the onboard server, sent the text message over Wi-Fi on the plane but when it hit the ground it followed the telco route to your friend’s phone or tablet. We note that if the plane was a business jet, it could be voice to text because of existing regulations. This clever technology is being Skype to VOIP but when the folks at Gogo work out the details with their partners (telcos, airlines, biz jet operators) you can expect to use text messaging on your next Gogo equipped flight. Yes, you can get a Gogo app today but that just gets you on to email quicker on the plane. Let’s face it readers, text messaging has been a long time coming to Gogo equipped planes, but it has been available where the picocell GSM solutions have lived for some time. Interestingly, you will be able to see those text charges on your phone bill. Cool!

Lastly, a Correction:
Correction to the ACS Retract Story last week: “When we got wind of the retract we wondered like you probably did – the market for retractable units must be dropping, in part because of their past reliability issues with retracts – perhaps the lowest (correction) MTBF of any IFE LRU…”