By Joachim Zintl, Senior Advisor & Partner at Travel in Motion, and Philip Fernandes, SVP Product Strategy at Accelya
A traveller books a low-cost flight from London to Barcelona. Alongside their seat, they add a bag, priority boarding and a transfer into the city. When plans change because their flight lands early, they expect to be able to adjust their transfer just as simply as they booked it – quickly and without complication.
That level of flexibility is not always easy for low-cost carriers to deliver, yet it is increasingly expected. IATA research shows 78% of passengers want to manage their journey end-to-end through their smartphone, expecting seamless, self-service control at every step, even in the case of disruption. Airlines must meet these expectations, or risk losing passengers to faster-moving competitors.
Retail is moving beyond traditional, more static models towards a more complex, personalised and increasingly regulated retail environment across the industry. Partnerships are expanding, distribution is evolving, and the scope of what airlines can sell – and how they sell it – is increasing.
For low-cost and regional carriers, this exposes a critical gap. The lean financial and operational systems that enabled rapid growth are now being stretched by a more complex retail landscape driven by partnerships, bundling, evolving traveller expectations, and increasingly hybrid operating models. And as complexity increases, so does the pressure on financial teams – from managing cash flow and maintaining control to reducing manual workarounds that erode efficiency.
Simplicity, once a strength, risks becoming a constraint if perceived complexity slows adoption of new retail models or if it cannot support new forms of revenue and collaboration. The question is no longer whether low-cost carriers should evolve their retail models, but whether their financial systems can keep pace.
Growth beyond the flight: expanding the low-cost retail model
Low-cost carriers have long focused on direct distribution, unbundled pricing and high-volume efficiency. While that model remains effective, the opportunity is expanding.
Modern retailing is creating new ways to grow revenue while maintaining a lean, low-cost model. Airlines can develop more dynamic bundles, increase ancillary revenue and participate in interline and partnership models, including with full-service carriers and non-air providers such as rail or ground transport.
As a result, retail is no longer limited to a single flight. A passenger booking a short-haul journey could be offered a bundled experience that includes rail transfer to the airport, priority boarding and a last-mile connection at their destination, all within a single transaction.
Distribution is evolving in tandem. Agency channels, once less relevant for low-cost carriers, are becoming more viable as modern retail standards give airlines greater control over how offers are created, priced and presented. This enables airlines to reach new customer segments without losing control of their retail strategy.
This expansion creates clear commercial upside – from increased ancillary revenue to new partnership and distribution opportunities – but also introduces a level of complexity that many financial systems were not designed to handle.
When retail complexity outpaces financial systems
Evolving airline needs – including dynamic pricing, bundled products, multi-partner transactions and real-time servicing – expose how airline financial systems were originally designed. Many were built for simpler, point-to-point operations within a single airline, rather than the demands of a more complex retailing environment. As airlines adopted modern retailing, financial systems are being asked to support a fundamentally different operating environment. Transactions are no longer discrete and linear, but continuous and interconnected.
This creates a widening gap between retail capability and financial capability. Airlines can create more sophisticated offers across a variety of channels, but the systems behind them struggle to manage the associated financial flows with the same level of speed and flexibility.
Addressing this requires a shift toward more integrated financial models that can support increasingly complex, multi-party retail environments. As the industry moves toward offer and order-based retailing, the order becomes the central reference point, linking product, payment, servicing and settlement across the full lifecycle – enabling simpler, more connected interactions between airlines and partners.
This provides a more consistent and transparent view of the transaction, enabling financial systems to support the realities of modern retail rather than constrain them.
Aligning finance to unlock the next phase of growth
Unlocking the next phase of retail growth depends not just on what airlines sell, but on how they manage the financial reality behind it.
For low-cost carriers, the challenge is not to introduce complexity, but to support new retail models while maintaining speed and operational efficiency. Built on simpler, more integrated models, many already operate with a more order-like structure, providing a strong foundation as the industry moves towards offer and order-based retailing.
To fully realise this advantage, financial systems need to be more closely aligned with how products are created, sold and delivered, rather than operating as a separate, downstream process.
First, financial systems need to align with retail strategy from the outset. As airlines expand into bundling, partnerships and new distribution models, finance must be able to support these capabilities without relying on manual intervention or workarounds.
Second, greater timeliness and accessibility of financial data will become increasingly important. As retail becomes more dynamic, airlines need visibility into financial performance as activity happens, enabling faster reconciliation, improved cash flow and more informed decision-making.
Third, financial systems must be able to support a broader partner ecosystem. As airlines collaborate with other carriers and non-air providers, finance needs to handle multi-party transactions in a way that does not introduce additional operational complexity.
Many airlines are approaching this evolution incrementally, introducing new capabilities alongside existing systems and building toward a more integrated financial foundation over time. Those that do so are better positioned to support modern retail models, expand into new revenue opportunities and maintain the simplicity and efficiency that define the low-cost model.
The low-cost advantage
The expectation set by today’s traveller is clear: journeys must be flexible, connected and easy to manage at every stage. For low-cost carriers, meeting that expectation is no longer just a customer experience challenge, it is a systems and mindset challenge.
Growth is increasingly coming from beyond the flight – through ancillary services, bundled offers, partnerships and expanded distribution. Realising that growth depends on financial systems that can keep pace with modern retail. For low-cost carriers, the advantage will come from reinforcing simplicity with stronger foundations – ensuring their systems enable growth, rather than limit it.
