Time to get realistic with what to expect from NDC in 2015
NDC is not a “magic bullet” that will decipher every problem, but it will help to solve, or allow to be solved, many of the cross-platform issues that we encounter today, writes Ritesh Gupta, Airline Information Correspondent
If there is one harmonious way in which various stakeholders look at airline distribution, then it has to be the same being described as an intricate and interconnected business. But is the industry finally on verge of a major overhaul? A clear answer to this would largely depend upon how IATA’s XML-based data transmission standard (NDC Standard) shapes up in 2015 and beyond.
As IATA recently stated, airlines need to work on APIs that will pave way for dissemination of their distinctive content in a rich and dynamic manner, deploying the offerings that their preferred technology vendors will launch to market – based on the NDC standard. For its part, IATA is also planning to evaluate and enhance the running of the schemas, and craft a standard project roadmap to support airlines and their partners for NDC.
For airlines, each one of them has its own challenges and a lot of what those hurdles are depend on their size and resources, says Ryan M. Harris, e-commerce and ancillary products manager, InselAir and InselAir Aruba.
Citing an example, he says if the entity is a large legacy airline, then there would probably be a large IT staff that has already solved the problem of how to offer ancillaries through all of direct channels and are looking to get full distribution into your third-party channels, such as GDS and interline distribution. On the other hand, if it’s a small regional carrier, you probably don’t even have an IT staff dedicated to your distribution and have to work with your system provider to even make ancillary sales a possibility through the direct channels, and may have excluded even considering the third-party availability at this time.
When it comes to the internal management of the ancillary products and services, there is no question that it must be centralized to coordinate the product mix and ensure consistent message and expectations to the passenger.
“In most airlines, the organizational structure to support this product line is already in place, at least from a high-level,” says Harris. It then requires the business and technology processes to support the end-to-end product lifecycle to be implemented. For those companies without a current ancillary program in place, the biggest difficulty is likely the transition in thinking of a product, such as seat selection, as an intangible product to placing a tangible value and life-cycle management approach to it.
NDC and indirect distribution
So what do airlines need to take into consideration as they focus on utilizing an XML path for distributing ancillaries in the agency channel?
Firstly it’s important to recognize that XML is a coding language, not a technology. It just happens to be an open language that is very useful at achieving some of the goals that we as an industry are looking to solve by allowing different systems that speak in different languages to speak in the same language. As Harris points out, it also helps that it is not limited to proprietary communication methods, which opens up connection options such as TCP/IP, or Internet, as opposed to the legacy point-to-point communication lines, such as leased lines.
“It is not a “magic bullet” that will solve every problem, but it will help to solve, or allow to be solved, many of the cross-platform issues that we encounter today,” says Harris. “That being said, I can’t imagine considering any core system that does not at least hold the capability, whether standard or optional, to allow bi-directional XML interfacing.”
The openness of the Open Travel Alliance XML standard is a multi-functional standard that will not only become a powerful tool in helping to resolve the cross-platform and cross-channel issues we are talking about today, but also becomes a development asset for internal access to the core systems, such as confirmations, loyalty program, check-in and even extending to more integrated e-commerce functions, asserted Harris.
Since it is a standard, it also opens up the availability of third-party applications to these interfaces without the heavy customization that is required today.
The availability of XML interfaces should expand the potential client pool of companies that develop these front-end interfaces, which should in turn result in driving innovation into the industry while minimizing cost to both the developers and the airlines while increasing the lifecycle of current airline host systems.
Being in control
Airlines would have the freedom to decide to what extent they are going to utilize NDC. It would be a function of the way their business is being done or their IT competence.
According to IATA, a carrier may deploy NDC processes end-to-end, managing offers, ticketing and settling straight with the agency. Alternatively, a carrier may deploy, perhaps as a supporting step, only the NDC-shopping route and carry on with all their fare-filing, fulfilment and integrity procedure.
Some carriers may opt at some point to run all their indirect sales using NDC based channels. On the other hand, carriers may decide, if only during a transition period, to use a combination of NDC based and non-NDC based processes.
The NDC Standard is agnostic as to whether a set up is structured entirely on NDC processes or NDC based processes used in conjunction with some other processes. It’s for airlines to decide to choose which offering would be most suitable for their operations.