New Distribution Capability spreads its wings in 2016

This year is expected to see more deployment projects for IATA’s New Distribution Capability (NDC) with the help of a growing cadre of airlines and travel technology partners. To be precise, NDC is a travel industry-supported program (NDC Program) launched by IATA for the development and market adoption of a new, XML-based data transmission standard. It will enable the provision of richer content by airlines through the travel agent channel.

To many, the benefits of IATA’s New Distribution Capability (NDC) are very clear and powerful. As airlines continue to develop bundled and/or unbundled products, as well as ancillary options and services, passengers need to be able to shop and compare the value of these  propositions across airlines—just as they do when shopping for other consumer goods.

While it is possible to visit individual airline websites to see what is being offered, comparing products and services among multiple airlines can be difficult and time consuming. That’s because existing systems powering travel agency displays and online travel sites typically have only limited capability to display airline products beyond the base fare and schedule. This is owing to the fact that they were developed in the pre-internet era.

The global distribution system (GDS) providers, to differing degrees, are developing products aimed at supporting airlines’ need to distribute full, rich content to travel agents. However, each GDS has developed these products using proprietary standards, rather than the open and global standard being offered by NDC.  

Airlines are getting on board to test and implement the standard. To date, 24 airline NDC pilots across five continents have been conducted and 15 of the top 20 airline groups (by revenue), have either deployed components of the NDC standard or plan to do so during 2016/17.

British Airways and Qatar Airways are two notable examples of companies signed up. Airlines that have announced plans to go live with NDC pilots or implementations also include, Lufthansa, Qantas, China Eastern and Aeromexico (See graphic). Most recently, Sabre announced it is using the NDC baseline standard to enable travel agents to have access to American Airlines’ Preferred and Main Cabin Extra products.

By the third quarter of this year, certified NDC partners are to be announced.

Fabricating the future
“We held 3 IT provider workshops last year where 20 IT providers showcased their solutions around NDC--including all three GDSs. This can only mean they see value. And over 200 airline representatives from 75 airlines attended these sessions. Corporate travel managers, are very important in the value chain and we have started to engage with them,” says Yanik Hoyles, IATA NDC program Director, speaking at the IATA Global Media Day in Geneva on 10 December.

Datalex is an omni channel airline retail solution provider, which is also supporting NDC. Its Chief Executive Officer, Aidan Brogan, says: “We are committed to the IATA NDC initiatives as a necessary approach to future proofing the airline retail model.  We have been members of the NDC Working Groups since 2013 and Datalex have actively worked with the IATA working groups and airline partners in the design, development and implementation of NDC standards.”

Helping the business travel buyer community prepare for the arrival of the NDC Standard and take advantage of the benefits of implementation by airlines and travel agents is one of the priorities for the NDC Program in 2016. To support these efforts, IATA has launched a microsite containing useful tools and information relevant to corporate travel buyers including an NDC demonstration video as well as a Change Readiness Guide for Business Travel.

To foster greater dialogue with this community on NDC and distribution-related topics, IATA has also created the Travel Manager Advisory Group (TMAG). Chaired by Novo Nordisk’s Global travel Manager, Jens Liltorp, nine corporate travel buyers from across Europe are involved in TMAG, and more are expected to join worldwide.

IATA will also be building on the findings of a study of travel agents’ awareness and attitudes toward NDC conducted last year in partnership with seven travel agent associations that are members of the World Travel Agents Associations Alliance (WTAAA). The study, which was conducted by Atmosphere Research Group and T2 Impact, showed that agents look forward to the opportunities New Distribution Capability (NDC) will bring and seek more information about the initiative. It is available at iata.org.

Dozens of technology companies, dozens of airlines, a growing number of corporate travel buyers, easier Internet-language-based communication between all parts of the value chain, is it any surprise NDC has so many partners? In its fifth year of development, NDC should end 2016 in a stronger position, ready to deliver more widely that richer travel experience.

How it all began
In the 1960s airlines developed their distribution networks and built the original computer reservations systems.

They gave agents access to airline reservations systems in the 1970s. Today, travel agents, travel management companies and online travel agencies sell about 60% of tickets by value. These reservation systems are proprietary, single-use networks, and have not evolved at the same pace at which airlines have embraced Internet technology.

The data transmission standards employed because of this proprietary, single-use network have limited capabilities. There are few off the shelf applications and even fewer developers working on these standards.

Partly due to this situation, travel agents have very limited access to airline rich content. Ancillary products and services that are sold on airline websites are rarely available through the travel agent channel, and new airline products, such as preferred seating and lounge passes, are cumbersome for the travel agent to market. Also, the personalization of offers is limited because of the distribution channel architecture and legacy technology.

Airlines, which created their websites in the 1990s, are able to provide a much better travel shopping experience because of the capability and flexibility of modern technology eg: XML. The GDSs are working to develop XML-based solutions but each is working on its own proprietary system, whereas NDC is an open technical standard, available to anyone. It will enable third parties, travel agents, to deliver the same travel shopping experience as airlines.

Some of the IT companies involved

2015

NDC history

2015 - 2016
IATA will support airlines, travel agents, global distribution and IT providers in their adoption of the NDC standard.
First industry standard NDC 15.2 was released on 1 September 2015.

2014
Resolution 787 approved by the US Department of Transportation. Additional airlines, travel agents and IT providers join the NDC program as pilots.

2013
IATA files Resolution 787 with the United States Department of Transportation (DOT) for its approval.

American Airlines, Air New Zealand, Swiss International Air Lines, China Southern Airlines and Hainan Airlines become the first airlines to pilot NDC in cooperation with their chosen technology and travel agent partners.

IATA creates the PDG Advisory Forum, where senior distribution representatives from across the value chain can provide feedback and recommendations.

2012
IATA creates the Passenger Distribution Group (PDG) to govern distribution processes and standards development.

The PDG sets up the Distribution Data Exchange Working Group to document business requirements and develop implementation guidance for the NDC Standard.

At the IATA Passenger Services Conference, NDC was launched and IATA member airlines approved Resolution 787, the foundation document and standard for the NDC program.

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