Ai Editorial: Being in control with NDC - 3 issues that airlines need to sort out

First published on 19th September, 2016

Ai Editorial: When we talk of IATA’s NDC standard, the common agreement among airlines is in the enablement of controlling the offer. There are 3 pertinent issues that can result in control, writes Ai’s Ritesh Gupta

 

When IATA launched the NDC initiative in October 2012, the trade association identified a five-year timeline toward mass implementation.

The first NDC standard was adopted in September last year, and Version PADIS 16.2. is scheduled for this month. IATA’s Yanik Hoyles, Director of NDC program, says as of now there are 52 NDC capable/ certified companies and 24 airlines have deployed some or all elements of the NDC Standard, while 86 airlines have shared that they intend to adopt the standard.

Considering that NDC is an investment decision, hasn’t the adoption been slow?

“I’m excited that people wish it could move along faster - it means there is a market demand that is not being fulfilled through the existing model,” says Hoyles.

Decide your own journey

The objective of NDC is to make changes within distribution and sales on one hand, and payment and BSP on the other. So there are schemas for shopping and, order management, and the end result is creation of Offer ID and Order ID, featuring order creation, ticketing, issuance, payment authorization and BSP reporting. So how has the industry gone about schemas for shopping and, order management?

“NDC is about enhancing retailing capabilities of airlines (distribution and sales) but this does not systematically imply changes for payments and the role of the BSP. This decision remains with each individual airline. To date, the very large majority of airlines have developed the capability to use the schemas for both Shopping and Order management,” shared Hoyles.

So considering that different airlines have different objectives/ expectations from NDC, does it mean some are only working on schemas for shopping and, some are working on schemas for both shopping and order management? “Yes, each airline makes its own decisions in terms of whether to adopt all or part of the NDC standard,” answered Hoyles.  

The common agreement among airlines is in the enablement of controlling the offer – back to the single source of truth concept. That seems universal among airlines moving in the NDC direction. Beyond that the industry can expect more splintering. Some airlines will want to go end-to-end; others may say they only want to be in control of the offer and really don’t need to perform the execution. Or, the execution on the offer becomes more of a tactical/ economical decision rather that a strategy decision.

Issues for airlines

1.     Distribution of content via API XML connectivity: Hoyles points out that the problem today is that airlines that already have API XML connectivity have it in a proprietary way. “The consequence is that implementations with new partners take time and are costly as they are all unique. Because NDC is a standard it will make such connections more cost effective and faster to deploy,” explained Hoyles. “If the partners involved (airlines or agents) see value in the presence of an intermediary, the standard can cater for that – and this is where aggregators come into play. They can be incumbents (GDSs) but also new players who are encouraged to offer their services because the connectivity is fulfilled via an Internet based standard which makes the market place much more open to competition.”

2.     Separating the core PSS capabilities: As much as it is important for carriers to plan, deploy, manage and upgrade APIs for all stakeholders to capitalize upon, airlines’ internal systems also should be in a position to pave way for API-based distribution. A senior IT executive working with a carrier in the Middle East mentioned that rather than writing off PSS, airlines need to work around their IT set up by fostering harmony between IT and other departments. “Getting rid of the “Mainframe” is not the answer. Working with the mainframe, using the immense processing power, high reliability, throughput and recovery, to let the mainframe do what it does best is the way forward,” said the executive. Offload as much data as possible.  But keep the mainframe for its phenomenal message processing capability.” An e-commerce executive suggested that FSCs need to focus on real time PSS data reliable interfacing to an external contemporary system where the proper data aggregation could be maintained. This would result in a mirror of PSS database outside of PSS, which could be used for generation of the accurate offer for individual passengers. “We are seeing airlines increasingly opt to control their own merchandising, e-commerce and API technologies, using platforms that enable airline control, faster speed to market, and flexibility – and move away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel,” shared a specialist based in the U. S. Of course, who is delivering these new-age modules, is an interesting race, but as of now it seems “out of the box” solution is being favoured.  

3.     Managing “version control”: The first official industry standard was launched 12 months ago. Further versions of the schemas are 16.1 and 16.2 while previous versions (1.1.1 and similar) are candidate releases. The evolution of the standard is captured within the different versions, with each new version incorporating improved functions reflecting the feedback from pilots and users. The best way to understand the evolution of the standard is to consult the Implementation guide V3, shared Hoyles.  

Airlines have different objectives and there are different versions of schema varying from 1.1.1, 1.1.2, 1.1.3, 15.2 and then 16.1 and 16.2.

As Jim Davidson, CEO, Farelogix explained: Messages may change and improve with new versions thanks to the addition of new elements (e.g., sending video images) or enhancements to existing elements (e.g., split PNR improvement). “Airlines will adopt new versions based on whether or not the newer versions address a required business need or if they simply want to update their version usage. In today’s world of deploying an NDC API between airline and intermediaries there will be evolving versions of the schema that will impact the specific XML messaging, in that messages themselves will change over time – new ones added, existing ones modified, etc.,” shared Davidson.  

So if an airline has deployed NDC schema version 15.2 and a newer version becomes available (15.4), then the airline would need to work with all their intermediaries that deployed version 15.2 in making the upgrade to 15.4. 

 

Where is NDC headed in the next 12 months? Hear from senior industry executives at the upcoming 7th Mega Event Worldwide 2016, The Event for Loyalty, Ancillary & Merchandising & Co-Brands, to be held in Toronto, Canada. (25 -26 October, 2016).

Twitter hashtag: #MegaEvent16

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