3541: How IBS Software Sees AI Redefining Airline Retail and Loyalty

[00:00:04] Welcome back to the Tech Talks Daily podcast. Right now, it's the time of year where you may even start to be planning your summer vacation next year. And the travel industry is reaching a moment where legacy systems, rising passenger expectations and AI-driven decision-making are all colliding in very real ways. Because airlines are no longer just moving people from one place to another.

[00:00:30] They're being asked to design complete journeys that feel connected, personal and responsive at every step. A little bit more than seats and luggage. So today I'm going to be joined once again by the CEO of IBS Software. And IBS builds the mission-critical platforms that are powering airlines, cruise lines and hospitality providers all around the world. Whether it be retailing or loyalty to operations and servicing.

[00:01:00] So today we will talk about why travel technology is shifting from back office infrastructure to the operating system for customer experience and revenue. And as we collectively explore what AI-first really means inside airline retailing, I want to learn more about why loyalty and reservations are finally converging. And how airlines are moving beyond selling seats and bags and towards creating traveller outcomes.

[00:01:29] And there's also been some pretty big news at IBS Software with their deep collaboration with AWS. So I want to learn more about what responsible AI will look like when trust, pricing and personalisation are all on the line. So if you want a more grounded view of how airline technology is evolving and what will separate the leaders from those who remain tied to older architectures, I hope this conversation will offer a much clearer view of the road ahead.

[00:01:59] Here at the Tech Talks Network, we now have nine podcasts and approaching 4,000 interviews. And that is only possible with some of the great friendships that I've developed over 10 years of podcasting. And a company that I'm proud to call friends of the show is Denodo. Because not only have they been on this podcast multiple times, they also help make sense of the AI data chaos that we're seeing now. Because the data world is louder than ever. AI hype, lake house complexity and pressure to deliver more with less.

[00:02:29] These are things that I talk about every day on this show. But Denodo is helping businesses make sense of it all. Because they provide a unified data foundation for trustworthy AI, lake house optimisation and data products to finally bring service to life. So whether you are a CIO or a builder, Denodo helps you activate your data with speed and governance. And their global partner network also helps you accelerate every step of the way.

[00:02:57] So if you're ready to unlock real outcomes, simply visit Denodo.com today. But now it's time for today's interview. Let me introduce you to today's guest. Well, a massive warm welcome back to the show. It's a pleasure talking to you again. But for anyone that's missed our previous conversations, can you just tell everyone listening a little about who you are and what you do? Thank you, Neil. Great to be here as always. Lovely to spend time with you.

[00:03:51] Thank you. We last spoke, I think it was nearly a year, nearly a year ago now. So I've got to ask, what's been keeping you busy? What excites you about the future of travel tech as we prepare for life in 2026? And also that magical time of year where we're starting to think about traveling and stuff again. Gosh, you know, time flows by. Yeah, it was almost a year ago since we last talked, Neil. And look, it's been busy. And the past year for us has been a sprint and a rebuild at the same time.

[00:04:20] For me, it's been about really going and meeting a lot of our customers. I spent a lot of our time, my time traveling to our customers all around the world, looking at what kind of outcomes they are trying to drive for their businesses, what kind of challenges they face in their businesses and lives on a daily basis. How at IBS we can support their businesses. That's been a big theme for me personally.

[00:04:44] We've also been investing very heavily in making our own products and platforms more modular, more cloud ready and more AI native. So customers can move faster without taking on more risk. And I would say, you know, it's hard to have any conversation these days about talking about AI. When we last talked, I think AI was still in the lab. It was an experiment. Most organizations were trying to figure out what to do with it.

[00:05:13] And I think it's moved on very quickly in the last nine months. And I would say now it's mainstream. It's reality. And that's impacted every aspect of how we think about our products and our customers and how our own internal capability at IBS. So AI is a very, very big theme for us. I would say those are the top three things that have kept me busy.

[00:05:38] And I would say what excites me most heading into 2026 is that as I talk to travel leaders all around the world, travel tech is no longer back office IT. It is becoming the operating system for customer experience and revenue.

[00:05:58] And in case of airlines, the winners will be players that will treat areas like retailing, loyalty and servicing as a single connected product powered by data and real time decisioning. And I think that really gets me excited. Yeah, it is a fascinating time. Early in the year, I was on an Air Baltic flight of all things and they had Starlink internet on board.

[00:06:20] It was 150 meg, which blew me away having those kind of speeds in the air because in-air Wi-Fi has reputation for not being great for various reasons. But from your side of things, I think I should also highlight that you stepped into the CEO role about a year ago too. So looking back, how has IBS software evolved during your first year in charge? And is there anything that has surprised you about the state of the travel sector and the role of technology in that?

[00:06:51] Yeah, we've evolved quite a bit since we last talked to Neil. We have actually internally reorganized the company quite a bit. And the whole intent there was to really raise our internal bar on speed, product quality and customer obsession. My own vision for the companies is for IBS to be the most customer centric, the most trusted and the most innovative company in travel technology.

[00:07:18] And we have taken huge strides in all of those areas and it's a working product and we continue to work on it every day. We've also sharpened a strategy around where we can lead. And I think a great example of that is this area of modern airline retailing and the connected customer journey. It's not just about traditional systems replacement.

[00:07:40] It's an upgrade of how things used to be, but it's a completely reimagining of the customer experience, of the travel experience in this new modern retailing world. And, you know, we talked about a little time, a little bit when we last talked about what surprised me about the travel sector. It's a whole concept of how so many, the tech stacks were so old and legacy, right?

[00:08:07] And I would say I'm not surprised by that anymore just because I've been in role for too long and time's gone by fast. But I think one thing is very clear is that demand is resilient in travel and customer expectations are rising fast. And while many tech stacks and operating models are still built for a different era, the conversations I've had with industry leaders around the world in the last year are really, really encouraging.

[00:08:36] And I think the tension between old tech and customer expectation is exactly why this is a defining moment for the industry from my point of view. And I think clearly airlines are realizing that they need agility, not just scale. And we are very, very excited at IBS to support all of our businesses that we support in this journey.

[00:09:04] And you've also recently spoke about airlines moving past a mindset that's focused only on seats and bags. What does that shift look like in practice and how far along are most carriers in making that transition? From a passenger point of view, I'm noticing the race to that Starlink, that fast Wi-Fi, and that will set a new expectation. But what are you seeing here? Yeah, it's a great point.

[00:09:28] And look, for me, in practice, it means airlines stop thinking of themselves as selling a seat or a flight. Yeah. And start thinking of themselves as curating traveler outcomes. It's about the right itinerary, the right flexibility, the right experience, and the right price, which is tailored to the customer in the context.

[00:09:50] And that's a very different way of thinking about business than how airlines used to think about it up until even like two years ago. And seats and bags were the first wave of unbundling. The next wave is real retailing, which is about dynamic bundles, paid flexibility, premium experiences, subscription-style benefits, and third-party content.

[00:10:18] And servicing that really feels seamless. And to your question of how far along are most carriers, I would say a small group are truly transforming. And you can see that in the leadership and the words that they speak. I would say many are still experimenting. You have to keep in mind that this is a huge transformation for the airline industry.

[00:10:44] And it's going to cost them a lot of money, but there's a lot of benefit to come out of it. But at the same time, it's like doing an open-heart surgery in your business, which is like bread and butter of Airwise, which is a commercial business. And so they are understandably slow about it, but I can see the progress being made. And I would say a lot are still constrained by legacy reservations and distribution assumptions.

[00:11:14] So I'd say while the intent is there, the execution is still uneven. But I'm very sort of encouraged by some of the conversations I've had in the last five to six months and the airline's ability to move fast in this area. And you've also described this AI-first approach to iRetail. So how is that philosophy influencing day-to-day decisions inside IBS software?

[00:11:40] And what does it mean for airline leaders who want to act with both speed and confidence? Yeah, it's a great question. For us, AI-first means that we don't bolt AI onto all workflows. We redesign workflows assuming intelligence is embedded. That changes day-to-day decisions.

[00:12:02] What data we prioritize, how we design user experiences, how we measure success, and how we ship improvements. For us, AI-first means intelligence drives every stage of the retail process, not added on later. The way I talk about it is AI not being a feature, but a foundation. And AI is responsible for designing, deciding, learning, and improving continuously across the value chain.

[00:12:30] In practice, this means AI agents curate offers, optimize pricing, manage orders in real time. They also manage disruption events, and the system continuously learns from customer behavior and operational data. For airline leaders, it means speed with confidence. AI can help you predict demand, optimize offers, personalize at scale, and improve servicing.

[00:12:58] But only, and only if it's governed and explainable, right? The goal is, I always tell my team, I never want us to do AI for AI's sake. I always want us to do AI for the customer's sake. And the goal is better commercial decisions faster while staying compliant, secure, and trusted. And this is why we recently announced a very significant strategic collaboration agreement with Amazon Web Services.

[00:13:24] If you think about how airlines have been talking about this for years, they're saying, how do we become the Amazon of airline retailing? And so for us, this partnership with Amazon was very meaningful. And this is not like a simple cloud hosting arrangement. This agreement with AWS represents deep co-innovation, including joint R&D and AI labs to accelerate new retailing capabilities,

[00:13:51] partnering with AWS, share product roadmap and architecture direction, integration of AWS's data, cloud, and AI technologies into iRetail, and engineering collaboration to build execution-ready and scalable solutions. So we are very, very excited about this partnership. And one of the things I try and do on this podcast is shine a light on areas in the world outside of Silicon Valley

[00:14:17] and how technology is transforming that area or trending in that area. And before you came on, I was doing a little Googling, and I quickly learned that Latin America is showing new interest in modern travel tech. So what changes are you seeing on the ground in this region? And why do you think the appetite for innovation is growing so quickly around here? Yeah, I mean, it's a fascinating market.

[00:14:40] In fact, recently, just about a couple of months ago, I had the pleasure of participating in a panel in a conference. So ALTA is the Association of Latin American Airlines. And they have this annual conference, and they had invited me to speak on a panel on airline retailing. And I think there's a lot of energy in that market right now because after coming out of COVID,

[00:15:09] when the airlines obviously were struggling deeply, the Latin American airlines are back to growth. When you look at the load factors within the region, they're back to world class. They're probably the highest in the world, around 85%, 86%. The airlines are back to profitability. There's obviously tourism drives a lot of traffic demand there.

[00:15:33] As people are looking back to travel and go to places, Latin America is emerging as a very, very exciting market. And what I saw when I was at that conference was there was a clear shift in the conversation. For the last several years, the conversation was about costs and how to really become profitable through cost reduction. This year, the conversation was more about growth.

[00:16:00] How do we use the profitability to invest more, to drive more growth, to create better experiences? So this airline retailing topic was a very, very active topic within the conference.

[00:16:15] So I think that's the key change I've seen on the ground is the leadership seems very excited given where the businesses are and are willing to spend and willing to invest and willing to improve the customer experience. And that gets me very, very excited. And having spoken to you before, you often speak about the idea of a four-day journey, not just a four-hour flight.

[00:16:43] So what does it take for airlines to design for the full experience rather than just the transport ride itself? Yeah, I think I'm very passionate about this. And I always say, like, for airlines, how do they go from thinking about this idea of a four-day journey from a four-hour flight to a four-day journey? And in my mind, Neil, it really takes three things. Number one is a unified view of the customer with their consent, obviously.

[00:17:13] So you're able to recognize them across channels and moments. Because if you have to worry about and move from what I call seat revenue to customer revenue, the first step is to have a 360-degree view of the customer. So I think that's the first thing. The second thing is orchestration across partners.

[00:17:37] Because one of the things that's rather unique about travel is the whole value chain is highly disconnected. So think about you're taking a flight. You know, you take a car from your house to the airport. Airport, sometimes you get into big traffic. There's long lines at the airport. The whole check-in experience. You clear security. Then you have, you know, your airlines. Then you go to a place. There's hotels.

[00:18:05] Then the experience of that place. So, and there's no one entity that owns that whole value chain. So by design, it's a very disconnected value chain. I think that's where the opportunities. So how do you orchestrate this customer and traveler journey across all of those touch points so that the journey feels connected and not fragment?

[00:18:29] And I would say the third and last thing is having the operational truth in real time so that you can react to what's happening and keep building on that customer experience. And a great example of that is what happens when, let's say, there's a flight disruption, there's a weather event and the flight is disrupted. And what action do you take at that point so that the traveler and the customer feels taken care of?

[00:18:55] Because it's moments like those where loyalty is won or lost. And I think that's key for me. So, and so, like, to summarize, when airlines design the full journey and they stop optimizing just the flight leg and start optimizing for the whole thing for the customer, fewer surprises, better recovery, and offers that feel helpful rather than just pushy.

[00:19:24] I think that's what goes into designing this full experience for the airlines. And as someone that travels to events all around the world and tied to an airline, I know full well that integrating reservations and loyalty systems has been a longstanding challenge across aviation. Some do it better than others. And Virgin, who I'm locked in with at the moment, it's no problem building those miles on those tier points, but spending them can be quite tricky.

[00:19:54] So what happens when these data flows finally come together? And what new moments of personalization do you see becoming possible? Yeah, we are really passionate about this topic, Neil. And because, you know, we have a very strong airline loyalty product that we are honored to support some of the largest airlines in the world. Through that product, we have a very strong vision in this airline retailing world.

[00:20:20] And I would say this integration and coming together of loyalty and airline retailing is one of the biggest unlocks in the industry. Because when reservations and loyalty truly converge, you can move from generic segmentation to real-time personalization. So if you think about traditionally what used to be the PSS system, so the reservation systems or airline and the loyalty, those tend to be separate businesses.

[00:20:48] There is obviously when you're booking a ticket, you know, the airlines know your loyalty number or the frequent flyer number. And they can design the offer to a certain extent, but that's where it stops. But you imagine a world where you are a loyalty member with an airline and they have a loyalty partner network, let's say, that consists of hotels and restaurants and, you know, supermarket chains.

[00:21:18] And some of those airlines have thousands of these partner networks. And so imagine a world where all these products and offers from this huge partner network become available as part of your booking journey. So let's say you're taking a flight from London to Paris. And based on who the partners are in Paris, you get offered offers from them.

[00:21:46] And that can happen while you're booking the ticket. That can happen once you land in Paris. That can even happen once you come back from Paris, depending on what the particular offer is. So this ability to recognize the customer consistently and tailor offers based on context and lifetime value and deliver smart servicing, you know, that's where the key is.

[00:22:09] Things like proactive rebooking, targeting compensation or benefits that actually matter in the moment. And I think this also enables a more model, not just points after the trip, but customer value before, during and after the trip. And I think this is where loyalty becomes an experience engine and not just a points ledger. And I think this is where the future is going.

[00:22:39] And this is the future that we are building at IBS. And I'm very, very excited about it. And if we look at everything from revenue optimization to loyalty fraud detection, AI does seem to be moving into some of the more sensitive parts of airline operations. So how do you balance innovation with responsible AI framework that keeps that trust intact? Is that a challenge? And if it is, how do you overcome that? Yeah.

[00:23:07] And I think, yeah, trust is the currency here, Neil. We treat responsible AI as a product requirement. It's not a legal checkbox for us. And that means clear governance, privacy by design, robust security, auditability, and human-in-the-loop controls where decisions have material customer impact. So if you take an example of airline ticket pricing, right?

[00:23:34] So take an example that let's say you're traveling from one place to the other. And the reason you're flying is, let's say, your mom is sick and you have to go and attend to her. And you go and you post on your Facebook account that, hey, I'm flying from, let's say, Seattle to Denver because I have to go and attend to my mom.

[00:24:02] I'm really sort of worried because she's sick. And the airline has access to that post. And because they know that you have a real need, they increase the price of the ticket. Now, that would not be the right thing. And technically, you can say that it's personalization, but it's not in the interest of the customer. And I was recently talking to a really good senior contact in one of the U.S. airlines. And the way he described it was beautiful.

[00:24:28] He said one of their pricing principles is that you will not get a worse deal from us because we know more about you. Right. And I thought that was a beautiful way of describing and a very simple and beautiful way of describing what is what should be the right pricing guiding principle for airlines.

[00:24:47] So you should never have AI build a pricing algo where it gives the user or the traveler a worse outcome because the airlines knows more about that. So I just wanted to use an example because I thought that was a beautiful, beautiful example. And again, in sensitive areas like fraud detection, we also focus on minimizing false positives and ensuring fairness because the cost of getting it wrong isn't just financial.

[00:25:17] It's actually reputational. So this is a big topic. We're doing a lot of work on this. And I think the best airlines are the ones who innovate aggressively. But not just that, but they also build trust systematically while they use AI to make business decisions. And as you look to the next phase for IBS, IBS software, I imagine you're locked down. There's only so much you can share, but it's only thing you can share around what partnerships,

[00:25:44] what technologies or customer expectations are shaping your priorities for the year ahead. And what will separate the carriers who adapt from those who might hesitate and be a little bit slower to adapt it? How do you see this playing out? Yeah, I think, look, I already talked about the AWS partnership. That's a very significant moment in time for us, and we are really excited about it.

[00:26:09] But overall, the way I think about it is when it comes to partnerships is, you know, platforms that are, you know, modular and API first, you know, so that airlines can evolve without multi-year rewrites. I always look at that as, you know, we also always want to partner with modern technology providers, modern players. Number two is, you know, intelligence everywhere.

[00:26:37] AI embedded across offer creation, pricing, servicing, disruption management, operations, flight operations, loyalty, et cetera, et cetera. I would say that's a big focus for us, both for internal technology development as well as when it comes to partnerships. The third is, I would say, ecosystem partnerships like hyperscalers. I talked about AWS, but we are open to others too. You know, integrators, identity experience partners.

[00:27:05] There's so much sort of canvas to paint on and to write on here. And the reason is because I don't think any one airline will build a journey alone. I think this is probably one of the mistakes that airlines have made in the past is they've probably have had the tendency to put all of the eggs in one basket. And I think it's very clear to me that there's players, there's technology players that are doing best-in-class work in a certain area.

[00:27:31] And so we are very open to partnerships in the space that we play. And I would say what separates the adopters is mindset and operating model. The leaders tweet, you know, retailing and loyalty as core strategy, invest in data foundations, and empower cross-functional teams to ship changes continuously.

[00:27:55] While I would say the hesitators keep trying to solve 2026 problems with 2006 architectures. And I think that gap will widen quickly. So as I look at the next 12 to 24 months, airlines have an opportunity to take some bold decisions to forge ahead in this area. I think that is a powerful moment too. And we've covered a lot in a short amount of time today.

[00:28:22] And anyone listening wanting to keep up to speed with all things that you're doing this year and beyond. Any anywhere in particular like to point everyone listening? Yeah, I think the best place to start is our website, ibsplc.com. And our LinkedIn page as well, where we share product updates, customer stories, any customer announcements, product announcements. Everything is posted on our LinkedIn page. So please, you know, follow us there.

[00:28:51] Reach out to us, connect with us. We'd love to engage in any and every way. And if you want, you're an airline leader who wants to compare notes, you can reach out to our site as well. We'll connect you with the right team quickly. Well, we covered so much there from what AI first means for iRetail, why AI sits at the very foundation of every decision now, and how being co-engineered with AWS, big announcement now as well, enables airlines to become living, learning, customer-centric retailers.

[00:29:21] So many big takeaways. Anyone listening in the industry, I'd love to hear from them. But more than anything, thank you once again for sparing your time to start this conversation. It'd be great to get you back on later in 2026 to complete your hat-trick of appearances. But more than anything, thank you for sitting down with me today. Thank you, Neil. It's always a pleasure to be with you. Thank you very much for your time.

[00:29:45] I think today's episode highlighted just how quickly the airline industry is being reshaped by data, intelligence, and customer expectations. And that shift from optimizing individual flights to designing end-to-end journeys. I think it all changes how airlines are thinking about retailing, loyalty, disruption management, and ultimately trust. And his perspectives, I think, also reinforce an incredibly important point.

[00:30:14] AI will only deliver value when it's embedded thoughtfully, governed responsibly, and designed to improve outcomes for both businesses and the traveler. And airlines that treat retailing, loyalty, and servicing as a single-connected system, they'll be the ones that are setting themselves up very differently for the years ahead. So let me know if this conversation made you rethink how travel technology is evolving, your experiences, whatever it is, I'd love to hear your thoughts.

[00:30:43] So please pop by techtalksnetwork.com. You'll find 4,000 interviews, 9 podcasts, and also how you can work with me. But most importantly, how you can hit record and send me an audio message. So hopefully I will hear your voice next. And if I don't, you'll be hearing mine in your podcast feed tomorrow. Speak with you then. Bye for now.