Why am I still not sure how NDC works?

Stephanie Taylor ruminates on the fact that IATA’s New Distribution Capability offers the world, but still seems so out of reach.

Having written a feature on booking and distribution for the October/November issue of Low-Fare & Regional Airlines, I had an inkling that IATA’s New Distribution Capability (NDC) has an amorphous quality, making it difficult to discuss in concrete terms, an opinion not dispelled at the association’s World Passenger Symposium (WPS) in Hamburg.

There’s no shortage of people explaining why we should introduce NDC, nor what kind of improvements it will enable. IATA’s president, Tony Tyler, reiterated its purpose in his opening speech, stating, “As airlines develop bundled and unbundled fares, passengers need to be able to shop and compare the value of these options across airlines – just as they do when shopping for other consumer goods.

“The NDC is intended to give them this ability through the development of a modern, internet-based data standard for communications between airlines and travel agents. As a result, air travellers will benefit from greater transparency and access to all of an airline’s offerings when shopping via a travel agent or online travel site, which is not the situation today. And airlines will be able to move beyond the mostly commoditised displays of fares and schedules in the travel agent channel, to present their products in a more attractive and competitive manner,” he explained.

There’s no doubt the need for NDC is justified. In one of the first discussions at WPS, the panellists talked about how the travel industry doesn’t have the passenger’s trust (evidenced by the fact that they spend on average four to six hours searching for a flight before making a purchase). But, as one speaker succinctly put it, “Passengers don’t want to play the role of travel agents.” This setup isn’t good for the industry either, as Amadeus claims it has an adverse effect on spending habits. The company averred that when passengers feel relaxed, airlines/travel/agents and so on, are likely to generate 25% more in ancillary revenue.

IATA’s director of transformation, Eric Leopold, remarked that NDC might also stand for ‘Next Disruptive Change’. He produced slides showing the changes in cars over last 100 years vs how much change they would undergo in the next ten years, then did the same with payment options. “The industry has to disrupt itself before someone else does it for them,” he declared.

Changes are indeed taking place. Tyler continued, “Some 24 airlines are undertaking pilots or implementations. A major milestone was achieved at the beginning of September when the first official set of NDC messages were approved by the IATA membership, with a second version to support interlining expected before year-end.”

However, a piece of research titled ‘NDC: Travel Agencies’ Enabler to Success’ – produced by Atmosphere Research Group (run by Henry Harteveldt) and published during the WPS – showed that travel agencies still express low awareness of the proposed standard. 53% of the agencies surveyed said they hadn’t heard of NDC before the study.

The research also showed the primary concerns of travel agents are: the costs to support NDC implementation, employee training to use NDC-enabled processes, possible added booking complexity associated with using NDC-enabled processes to search for and book flights, and ongoing product and technology support. They want to talk about it like it’s a concrete thing, but how can you pin down something which IATA says isn’t mandatory and can be employed in various subsets?

Therein lays the travel agents’ misunderstandings. Another member of IATA reported that among the questions he is most frequently asked by travel agencies are, ‘Can you show me a screenshot?’ and ‘When do I get my login?’ People aren’t grasping that ‘much of NDC will operate on the back-end, invisible to agencies or their clients.’ No wonder it is difficult to explain an invisible standard, and IATA is giving itself a rather mammoth task, since it has 79,000 accredited travel agencies around the globe.

Patrick Le Masne, SVP strategic planning for Accor Hotels, explained the digital travel industry landscape using the phrase, “It’s no longer a hyper-connected segment – it’s a mass movement that’s progressing very rapidly.”

Atmosphere’s research showed that agencies selling ‘Branded Fares’ – air fares and extra amenities bundled together – use a variety of different channels including GDSs, airline websites, a ‘direct connection’ to the airline system and calling airlines directly. This is the crux of one of their biggest pain points: the fragmented communication of data and the impact this has on the booking experience. Otto de Vries, CEO of the Association of South African Travel Agents (ASATA), who presented IATA’s
research, said this system drives up costs and decreases productivity.

By providing GDSs (which it’s important to note, are still an airline’s most-used channel for booking ‘Branded Fares’) with detailed fare information, NDC will simplify the booking process for travel agents, changing the industry landscape from ‘hyper connected’ – with all parties constantly referring back between one another – to more of a ‘mass movement’ where everyone is on the same page, heading in the same direction. Only then does the travel industry have the potential to be more competitive – the main reason why travel agents would be willing to get on board with NDC, despite their lack of knowledge.

The conclusion section of IATA’s research says much the same thing, that ‘it’s a collaborative ecosystem change, with mobile carriers, the search system, GDSs, airlines and other travel technology providers all interacting based on NDC message sets.’

Look at me, getting carried away with more reasons to implement NDC, rather than how to go about it. Members of IATA are aware of this tendency. One speaker at the WPS spoke of the importance of setting a clearly-defined scope so as not to get carried away by the variety of capabilities offered by NDC. They suggest starting with ‘small concrete deliverables’’ but failed to go on to exemplify any, as far as I’m aware. Aurelie Krau at TravelThink managed to suggest that corporate booking tools, like leisure agencies, need more rich content, but that’s as far as things went.

Maybe this problem will change next year. At the WPS, IATA officially launched the NDC Certification Programme, but registration won’t be available on the IATA website until summer 2016. Depending on the level of NDC integrated into the processes of airlines, agents, aggregators and vendors, they will be qualified as NDC Level 1, NDC Level 2 or NDC Level 3. Level 1 signifies ‘basic shopping’ or ‘the use of NDC messages to support ancillary sales post booking’ and Level 3 implies an end-to-end NDC solution. To encourage the industry to take part, IATA specified that whilst there would be an administrative fee for going through this certification process, it would be waived for the first six months.

Whilst there’s no doubt NDC is an ambitiously intelligent idea that has the ability to benefit the entire travel industry, I look forward to a time when we can assess how it’s doing as the result of practical experience. Patience has never been one of my strong points.

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