How IATA's NDC technology is changing travel distribution

Ian Heywood, Travelport's global head of new distribution, recently addressed over 200 business leaders at Travelport LIVE Africa on the topic of New Distribution Capability (NDC), a technology standard launched by IATA that allows data, such as passenger booking information, to be transferred in a common way over the internet.
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NDC is a travel industry-supported programme launched by IATA for the development and market adoption of a new, XML-based data transmission standard.

During his presentation, Heywood received over 50 questions from the audience. Here, Heywood provides answers to eight of the most commonly asked questions.

What does IATA NDC Level 3 certified mean?

IATA devised levels of accreditation to recognise an organisation’s readiness to implement the NDC standard. Level 3 is the highest certification IATA awards. It is given to companies that can demonstrate the ability to execute full Offer and Order Management. Travelport became the first GDS to be certified as a Level 3 aggregator late last year.

We have therefore been working with a wide range of airlines and agencies for a while on developing and implementing our product roadmap. After months of consultation and development, we are now close to handling our first orders from European airlines using NDC. IATA will be introducing two further certification Levels (4 and 5) in 2019. We are already working to ensure we achieve these certificates soon after they are released.

How will NDC affect existing commercial models?

There will be a range of commercial models introduced in the new NDC era, which will be influenced by how individual airlines decide to go to market with NDC. As always, these will need to recognize the value provided by each party in the booking process. The details will ultimately be ironed out on a case-by-case basis.

Is the airlines’ ultimate goal with NDC to own the customer and eliminate the GDS in the distribution chain?

No. I believe airlines understand that, while NDC can help them improve their sales capability, it can’t reduce the vast complexity of travel distribution. Only the GDS, for example, can offer things like content aggregation from multiple sources, booking, workflow automation, change management, customer servicing, agency robotics, booking changes, policy compliance, expense management, invoicing and business analytics.

Do you see NDC coming to Africa soon given the local market dynamics?

NDC is actually already in Africa through sales of content from non-African airlines, such as British Airways and Lufthansa. This will only continue to grow as more airlines distribute their content via an API. Interestingly, Kenya Airways told the audience at Travelport Live Africa that it plans to distribute API content within two years.

Carrot or stick, which way forward for adoption of NDC by travel agents?

We are already seeing airlines in Europe, North America and Asia develop a variety of ‘carrot’ and ‘stick’ approaches when it comes to encouraging NDC adoption and use by agents. Each airline is, of course, taking the direction it feels will deliver the best results. However, only time will tell which works best in the long-term.

I think the plumber opened the boards under the sink, had a look, took a big breath in and said, "this is worse than I thought".

What's your take on this statement in regard to the NDC debate?

There is certainly a huge amount of 'plumbing' for the industry to do, not least because there are multiple NDC schemas to which the airlines are working. One NDC size does not fit all. Yanik Hoyles, who runs NDC for IATA, agrees that a lot needs to be done in this area in 2018. My own view is that work will also need to continue throughout 2019. For example, while you will start to see Travelport distribute airlines’ NDC content in Q4 2018, with this increasing during 2019, there will still be a considerable amount of 'plumbing' work taking place in the background.

Who owns the PNR in an NDC model?

The airline will have the master record, which is the single point of truth. However, when a booking is made through Travelport, we will continue to have a fully synchronized version of the record in our system, which agents can access. If any changes are made by the agent or airline to the record, these will automatically be synchronized between the two systems.

What do TMCs need to do to prepare for an NDC world?

TMCs need to talk to their partners in the industry; airlines about their plans for NDC distribution, and GDS companies about their solutions to deliver airline NDC content. They also need to work out how NDC can genuinely benefit their customers and the additional value that they can bring to airlines once NDC is being used. All this information will help TMCs form an NDC strategy that works for their business.
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