Airlines are at a crossroads when it comes to technology investment. With razor-thin margins and customer expectations shaped by retail and fintech, the decision to build or buy an airline technology platform is no longer just a back-office question. It’s a strategic choice that determines how fast carriers can innovate, how much revenue they can unlock, and how effectively they can keep travelers loyal.
Why the Build vs Buy Airline Technology Question Matters Now
Airlines today face immense pressure to generate ancillary revenue growth, strengthen loyalty engagement, and deliver seamless digital experiences that rival those of the retail and fintech sectors. The stakes are higher than ever: deciding whether to build vs buy airline technology to meet those demands is not simply an IT strategy decision. It is a financial choice that can exceed $100 million in long-term costs.
Margins across the airline industry continue to erode. Rising operational expenses have cut into profitability, leaving carriers with little room for error. At the same time, passenger expectations have been reshaped by the instant gratification and personalized service they experience in retail and fintech, where one-click checkout, AI-driven recommendations, and flexible payment options have become the norm.
The competitive threat from online travel agencies (OTAs) and expansive ecosystems only compounds the challenge. Against this backdrop, the build vs buy airline technology decision has emerged as one of the most critical and high-stakes questions airline leaders must answer.
Airline Technology Development: The Build Path and Its Pitfalls
For many carriers, the idea of building packaging technology in-house is appealing because it promises greater control over the brand experience and the technology stack. By developing their dynamic booking engine, airlines can fully customize the customer journey to reflect their brand identity and align closely with unique operational needs. Internal ownership of customer data is another perceived advantage, as building ensures tighter control over data integration, loyalty rules, and reservation system connectivity. This level of customization can feel like the only path to creating a platform perfectly tailored to an airline’s requirements.
However, the realities of building such a system often outweigh the perceived benefits.
- Capital Costs: The capital investment alone is staggering. Developing an enterprise-grade dynamic booking engine can take years to complete, requiring the recruitment of highly specialized engineers, long-term budget allocation, and ongoing research and development.
- Integration Complexity: Integration is another significant hurdle. Airlines must connect with hundreds of global inventory providers, multiple global distribution systems, payment processors, and regulatory frameworks across dozens of countries, all while maintaining compliance.
- Operation Burden: The operational burden of managing in-house technology is equally daunting. An airline that builds its own system must also provide enterprise-grade security, fraud prevention, and multilingual traveler support around the clock, worldwide.
- Innovation Lag: Beyond the above, innovation tends to lag when technology is managed internally. While industries like retail and fintech evolve rapidly through AI-driven personalization and real-time product bundling, in-house airline systems often struggle to keep pace with these advancements.
To put the scale in perspective, Switchfly—a travel technology company with over two decades of experience—has built a global ecosystem that powers airline dynamic packaging, loyalty commerce, and ancillary revenue growth. Switchfly's infrastructure includes thousands of integrations, compliance-ready systems, and worldwide traveler support. For an airline to replicate this infrastructure, it would require nearly 20 years of development and hundreds of millions in cost.
Airline Dynamic Packaging Solutions: Why Airlines Choose to Buy
By contrast, buying technology from a proven partner offers advantages that airlines cannot easily replicate internally. A significant benefit is speed-to-market. Instead of spending years in development, airlines can launch within weeks. The revenue impact is also clear and measurable. Carriers that adopt airline dynamic packaging see cart values increase 3-5x compared to flight-only bookings, demonstrating the power of bundled offers. Buying and integrating also provides access to global infrastructure, including built-in multilingual traveler support, regulatory compliance, and enterprise-grade data security.
Most importantly, partnering with established technology ensures ongoing innovation without placing strain on internal IT teams. With a partner continuously rolling out enhancements, such as AI-driven offers, points-and-cash redemption, and dynamic bundling, airlines can keep pace with changing passenger expectations without committing significant internal resources to development cycles.
For airlines seeking to boost ancillary revenue growth, improve loyalty engagement, and move quickly in a competitive marketplace, partnership offers not only speed and scale but also a track record of delivering measurable results.
Cost of Airline Tech Development: The $100M Question
When comparing the 'build vs. buy' decision, cost remains at the center of the debate. Direct costs, such as software development, integration, licensing fees, and cloud hosting, are easy to quantify, but indirect costs often weigh more heavily on an airline’s bottom line. The revenue lost during years of delayed launches, combined with the opportunity cost of allocating top internal talent to technology rather than customer strategy, can be substantial. Risk costs add another dimension to the equation. A system failure, compliance violation, or poor customer experience not only incurs financial penalties but also damages customer trust and loyalty.
Financial modeling consistently shows that, over a five-year horizon, the cost of in-house airline tech development often surpasses licensing a proven platform. The hidden losses from slow deployment and missed ancillary revenue opportunities tip the scales heavily in favor of buying rather than building.
5-Year Cost Comparison: Build vs Buy Airline Technology
| Cost Category | Build In-House (Estimated) | Buy / License Platform (Estimated) |
|---|---|---|
| Development & Staffing | $40M–$60M | $250,000 (annual license & support) |
| Integrations & Compliance | $20M+ | Included in platform |
| Ongoing R&D & Maintenance | $15M+ | Included in roadmap updates |
| Traveler Support & Security | $10M+ | Included in platform |
| Total (5 Years) | $85M–$100M+ | $250,000 |
Strategic Considerations Beyond Cost
Although cost is a significant factor, strategic considerations can be just as important. Customer experience is becoming an increasingly important differentiator in aviation. Offering full-trip packages that include flights, hotels, cars, activities, and insurance can generate four times higher average cart values compared to flight-only bookings. Expanding redemption options also leads to higher loyalty engagement and repeat bookings, strengthening the airline’s long-term competitive position.
Agility is another critical consideration. Passengers expect rapid innovation and relevant offers that adapt to their needs. Buying enables airlines to roll out AI-driven promotions, segment offers by traveler type, and launch seasonal packaging quickly and efficiently, all without relying on lengthy development cycles or code rewrites.
Finally, airlines must consider their core competencies. Airlines are experts at moving passengers from one destination to another, but they are not global technology providers. Managing global hotel, car rental, and activities inventory requires specialized expertise and infrastructure. By outsourcing these responsibilities to an experienced provider, airlines can focus on their core competencies while still capturing the benefits of ancillary revenue growth.
Build vs Buy Airline Technology: A Decision Framework for Leaders
For executives evaluating the build vs. buy airline technology decision, several critical questions must be asked.
- Do we have the in-house talent and budget to sustain continuous innovation over the long term?
- Can we realistically match the speed, integrations, and global infrastructure already offered by established providers?
- And perhaps most importantly, what is the opportunity cost of waiting years to launch while competitors move quickly to capture the market?
For most airlines, the answers to these questions point toward buying rather than building. Buying is particularly compelling when speed-to-market is essential, when proven revenue impact is required rather than hypothetical, and when global traveler support is a non-negotiable element of the customer experience.
Answering the $100M Question in Airline Loyalty Platforms
Ultimately, buying airline packaging technology delivers faster return on investment, lower risk, and greater agility than building in-house. Airlines that partner with established providers like Switchfly benefit from two decades of expertise, measurable revenue lift, and the ability to stay competitive in a rapidly evolving marketplace.
The $100M question is not simply about technology—it is about survival in an industry where margins are razor-thin and customer loyalty is fragile.
The smartest path forward is clear: airlines should partner with a provider that has already solved the complexity, proven the revenue impact, and can move at the speed the market demands.
For carriers that want to compete effectively in today’s environment, buying is not just the faster option—it is the stronger, safer, and more profitable one. Contact Switchfly today to explore how our platform can help your airline unlock new revenue streams and deliver the seamless loyalty experience travelers expect.
