After more than two years of fierce discussion, debate and dispute, the airline and travel industries appear to have reached a base agreement on the principles of IATA’s New Distribution Capability (NDC).
That much-branded three-letter acronym is the IATA initiative to develop an extensible mark-up language (XML) standard that would allow airlines to more efficiently communicate with organisations, such as travel agents and aggregators, that sell and distribute their products and services.
Until January this year, IATA faced opposition from industry stakeholders across the globe that believed the project was an attack on consumer privacy and their ability to shop for air transport services in a transparent environment. However, in January a giant obstacle was overcome when the Open Allies for Air Transparency, an alliance that included travel agents and aggregators, lifted its opposition to US Department of Transport (DOT) resolution 787, which set out the principles of NDC. Though the resolution only received formal DOT approval on 21 May, IATA and its partners have been pressing ahead with the groundwork for NDC.
IATA’s NDC project leader Yanik Hoyles says that following five successful pilot schemes, airlines and businesses selling airline tickets or ancillaries will from early August be able to use the latest versions of the XML language (known as schemas) to offer more products and shopping options to customers. IATA calls it NDC 1.1. Those who participated in the initial trials will have to upgrade to benefit from the improvements.
“It is the first set of schemas that will fulfil the end-to-end vision of NDC, from shopping and order management to booking and ticketing,” says Hoyles. “Does that mean they are finished? No. These are schemas [the industry] can work with. There will still be pilots and trials and we will continue to learn.”
Chinese carrier Shandong Airlines and its local GDS supplier TravelSky are already trialling the latest iteration of NDC. A second pilot scheme is also underway, though the identity of the participant has not been revealed.
For travel agencies that opt in to the latest version of the NDC shopping standard there are three key benefits, says Hoyles. Firstly, it provides price and content parity with airlines’ websites, which includes access to rich content and detailed information about each airline product.
Secondly, the standard provides access to any product update in real time: for example, if an airline were to launch a premium economy cabin, its seats would immediately appear in the agents’ booking system.
Finally, the standard allows agents to personalise offers. “If you go shopping with a loyalty card or if you have a frequent-flyer number, you may be made a special offer. The schema enables sellers to make such proposals,” says Hoyles.
At present, the vast majority of agents shop and book using a GDS, which is another layer of technology between the origin of the product and the point of sale.
But what makes NDC 1.1 different from the original version? Following feedback from last year’s initial pilots and after lengthy meetings of IATA’s Distribution Data Exchange Working Group (DDXWG), it was decided the schema was “too heavy”, meaning the volume of data being transferred back and forth between the airline and seller was unnecessarily voluminous. Offer ID was, therefore, developed to make processes “lighter and more functional”.
“It’s a crucial innovation,” explains Hoyles. “An airline offer is tagged with an Offer ID which links a price to a specific set of products. It lists the flights, specifies the payment conditions, the arrangements for making changes and clarifies products that are included. The airline that created the product offer has ticketing and accounting built entirely around it, with no reliance on data from the intermediary except for the chosen payment method.”
Hoyles says new controls for order management and ticketing against the Offer ID should ensure the fare to be paid is a valid offer and would eliminate the need for revenue integrity checks and agency debit memos (ADMs).
Initially, the world’s three largest GDSs were among the most vocal opponents of the NDC initiative. Amadeus, Sabre and Travelport saw the project as an attempt by airlines to bypass their distribution channel to trade directly with agencies. In the end, IATA said it had no intention of doing so, and admitted it had done a poor job of communicating the intended benefits to the industry.
The concerns of GDSs and their Open Allies partners fell into four categories: the group wanted the wording in the resolution to make clear the use of NDC was voluntary; they wanted to be sure consumers would not be required to provide personal data; there was a consensus that NDC should be compatible with all existing hardware and software used by industry stakeholders; and NDC should have no impact on data ownership. After long negotiations, IATA relented and an agreement was reached.
However, Amadeus believes the original resolution has changed so significantly that it should now be called NDC 2.0, and is calling for IATA to formally present a new resolution at the World Passenger Symposium in October.
Meanwhile, taking a more diplomatic stance, Sabre says: “We applaud the co-operative steps taken by all parties and look forward to continuing our work with IATA on technology standards for the benefit of airlines, hotels, travellers and the rest of the industry.”
Similarly, Travelport’s vice-president of travel merchandising and distribution, Fergal Kelly, says the initiative has evolved to the point where IATA now understands the need to develop industry standards focused on serving the merchandising and retailing needs of all stakeholders in the travel value chain.
“This aligned thinking forms a good basis for us to work together going forward,” he says. Though the GDSs no longer oppose NDC, they have all stopped short of a formal endorsement. They publicly proclaim that any technology standard that improves processes and customer service should be embraced, while privately insisting their technology already provides much of what IATA is at pains to develop.
But with the global airline and travel industries now in basic agreement, IATA can press ahead with its plans to offer the XML coding to whoever wishes to integrate it into their business processes. And the standard is entirely flexible. IATA admits elements of NDC are already being used in the global marketplace by airlines that have developed their own versions, such as Air Canada, EasyJet and WestJet, but is keen for “one common plug” to be used.
During the upcoming IATA AGM the corporate travel community, which remains sceptical about the benefits the initiative will bring to the business travel sector, will have an opportunity for the first time to see how the standard could enable developers to create corporate booking tools. And Hoyles remains optimistic that, like the GDSs, corporations will be less hostile towards the notion of change.
“The cloud has gone,” he says. “Last year’s aggression and defensiveness has been set aside. Not everyone is happy, but we’re having constructive conversations.”
So NDC is dead. Long live NDC 1.1 (or 2.0, depending on your standpoint)!
Source: Flight Daily News
