New Distribution Capability

I will take you through an update on the progress we have made over the past 2 years and also
provide some insight into what you should expect for 2015.
We will begin with a short video which describes what the air travel shopping experience could look
like with an NDC standard in place. This is not about IATA building a system for a travel agent! This
is about illustrating how a travel IT provider could use the NDC standard to create exciting and
comprehensive shopping interfaces for a travel agent or online travel site.
The video shows how the NDC standard can help Online Travel Agents, Business Travel Agents and
also Corporate travel departments (corporate booking tools).
These mock ups were designed in consultation with focus groups of travel agents and corporate
buyers over the last 18 months.
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Reminder: This is not about IATA building a system. This is about illustrating how a travel IT provider
could use the NDC standard to create exciting and comprehensive shopping interfaces for a travel
agent or online travel site.
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NDC is in effect the modernization of 40-year-old data exchange standards for ticket distribution
developed before the Internet was invented.
IATA was created nearly 70 years ago to set industry standards that facilitate safe and efficient air
travel (e.g. e-ticketing, bar coded boarding passes, common use airport kiosks, etc.
In the case of NDC, once again, IATA’s role will be to deliver the standards that enable such
capabilities for our industry partners so as to be able to offer the passenger the opportunity to have a
consistent shopping experience, wherever they shop for travel. The approach consists of using XML
(Internet) language to support the delivery of rich content in travel agency and other third party
systems, such as the ability to buy additional products and services and to be recognized and receive
personalized offers, or shop anonymously, as they choose,
It is important to note that GDSs are already working towards making it possible for airlines to
merchandize their products via travel agents in a manner more consistent with airlines’ own websites.
IATA welcomes these developments. However, each GDS is working on its own proprietary solution.
In contrast, NDC like all IATA standards, will be an open standard available to any and all who want
to use it, including GDSs.
The primary driver for NDC is the revenue opportunity. NDC will unlock value through the travel agent
channel by providing it with features and content it cannot (or is difficult to access) access today.
Key revenue drivers:
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•
Product attributes (differentiation): ability to show competitive features that may be
unique to the offer and therefore drive purchase decision
•
Fare Families: displaying multiple price points, with increased value, may drive “up
sells”
•
Ancillaries: Displaying additional products (eg lounge access) may drive purchase
decision
The latest study carried out by IdeaWorks, suggests airline ancillary revenues are projected to leap to
US$49.4 billion in 2014, up more than 15% over 2013 .
NDC will provide the capability for all these features to be pushed out to the travel agent channel,
which today represents up to 60% of total airline sales.
Of course, there are some potential cost benefits (but once again not the main driver).
Key cost drivers:
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Moving from a 40-year old legacy infrastructure to an internet environment will make
change much more cost effective
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NDC should facilitate new entry, which should increase competition and drive down
costs
•
NDC also provides the airline with the opportunity to consider cost reduction
opportunities in the areas of ticketing, payment and revenue accounting
But what are the key criteria for success?
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To develop and ensure industry implementation of the NDC standard, there are 3 key success
factors.
Standard development is the core to the entire program.
Airline adoption is of course the basic driver behind the program and we have seen very strong
support, from testing, in the early stages of the program, to deployment, which we expect to be
gradual, from 2015 and 2016 onwards.
Market validation is simply travel IT providers and GDSs, travel agents and end users buying into
NDC because of the benefits they see.
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As you can see, since NDC was formally launched in October 2012, there have been some
significant developments on the technology side:
1. In April 2013 we acquired the OpenAxis schemas that were to form the ‘baseline’ of the NDC
schemas. Since then, the NDC 1.0 and 1.1 schemas have experienced significant evolution
owing to industry input.
By the way, when we talk about standards at this level of detail, we will refer to schemas which
reflects the technical language a programmer would use to bring the standard to life.
2. A first set of shopping schemas was delivered for testing in 2013. Phase 1 of this pilot migrated to
production in November 2013 and Hainan Airlines, with their GDS partner, Travelsky, issued the first
live e-ticket based on these schemas at the end of that month. Shandong Airlines and Travelsky also
deployed Shopping 1.0 during early 2014.
3. In September 2014 we published a revised set of shopping schemas 1.1 which benefitted from the
2013 testing and already have seen significantly improvement.
4. We published the first version of “end-to-end” schemas in Oct 2014, allowing any airline to test the
“end-to-end” NDC vision and allowing any travel technology company to start building their road map
for their next generation of NDC-based airline, agency or corporate booking solutions.
These schemas are the outcome of the working of a group of 80+ experts representing
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airlines, agents, GDSs and technology companies. This is typical of the approach to delivering
an industry standard and what makes it unique. And given this level of engagement, this speed
of delivery is quite remarkable
As of today anyone who wants to implement NDC can do it. The full set of schemas are available at
www.iata.org.
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Prior to airlines engaging in pilots, on most occasions we carry out ’airline alignment sessions’. This
does not mean the airline will adopt NDC but it means all relevant stakeholders in an airline are fully
briefed on NDC and not only understand the NDC shopping components, but also are able to assess
the opportunities that arise throughout the end-to-end process, such as the airline’s ability to carry out
booking, payment and ticketing, for example. In the last 10 months we have delivered 30 of these
sessions.
2013 Pilots with 2014 activity
1. Endeavor – American Airlines, JR Technologies (JRT), US-based consolidator: AA Preferred
Seat and Main Cabin Extra not available in a non-NDC channel
2. SkyCouch – Air New Zealand, JR Technologies (JRT), US-based consolidator: Ability to easily
describe the qualitative aspect of specific seat products
3. SkyDreamer – Travelsky, Hainan Airlines, CTBA (travel agency): Verify that the NDC schema
can support shopping for domestic travel in China. First pilot to produce an e-ticket, for a real
passenger in November 2013. Now focusing on rich content, international travel and migrating to
NDC Shopping 1.1
4. Sunshine – Travelsky, China Southern, Ctrip (travel agency): Focus on basic shopping using the
NDC shopping schema
5. Alpine – Swiss International Air Lines, Datalex, PROS, HP: High traffic volume (performance
testing) of shopping and pricing requests, flexible date shopping / sub-second responses. It will
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also use an agency GUI. – Now using NDC Shopping 1.1
2014 Pilots / Deployments
1. Shandong Airlines, Travelsky, Qingdao Huajun Air Service and Shandong Century Aviation:
Using NDC to offer aviation insurance ancillary sold through 2 online travel agencies (OTAs) only
available via NDC. Deployed to production in June 2014.
2. United Airlines – This live deployment distributes UA’s extra legroom seat product to US-based
Amadeus agents using the NDC shopping schemas. Deployed to production in June 2014 and
announced in August 2014.
3. Airline Profile Pilot – Air Canada, ATPCO, OAG, FareCompare: testing the implementation of
an Airline Profile created by Air Canada, stored and distributed by ATPCO and used by
FareCompare.
4. Heli Air Monaco – APG, Orchestra: pilot goal to create and distribute personalized offers through
their web site and mobile apps, using customer profile & advanced search criteria.
5. British Airways is building a pilot to evaluate the v1.0 release of the NDC shopping schema with a
travel partner.
6. Qatar Airways – in collaboration with Amadeus, this pilot will focus on showcasing the airline's
premium product across all cabins to travel agents.
7. Air China – just kicked off their pilot for 2015 with an expected delivery by December 2015. Pilot
details will shortly be posted on the website.
A consolidated pilot report and case studies are planned for early 2015
Since 24 October when our end to end schemas were published on the website, we have had over
220 downloads from IT providers, GDSs, Agents and airlines.
Details of delivered and underway pilots can be found in the IATA NDC website http://www.iata.org/whatwedo/airline-distribution/ndc/Pages/default.aspx
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2014 also has been a very positive year in terms of stakeholder engagement.
August 2014, The US Department of Transportation Approved Resolution 787, the foundation
document for NDC. This is excellent news as it validates what NDC is trying to achieve. DOT’s
approval decision cited the pro-consumer attributes in what was a strong vote of confidence for the
initiative.
The 3 major global distribution system providers endorsed NDC at the World Passenger
Symposium in San Diego, 15-17 October 2014 and committed to use the NDC XML-based
standard should their airline partners ask them to, showing that NDC has become mainstream.
Today we are announcing our collaboration with a coalition of national travel agent
associations on a study to look at options that could benefit the travel agents as NDC is now widely
accepted across the industry communities. This is a very exciting development and caps a very busy
year.
And last but not least, in October we announced the launch of the NDC Innovation Fund in
partnership with Travel Capitalist Ventures. This is a stand-alone strategic investment fund. It will
make investments in small and medium size companies seeking to develop solutions which support
airlines and agents as they leverage the enhanced distribution capabilities enabled by the NDC
standard. For more information please go to http://www.ndcinnovationfund.com
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1/ During 2015 we expect to see a greater number of pilot and deployment projects to be
initiated by airlines around the globe, in partnership with their travel technology partners and selected
agency partners.
It is also essential that more and more airlines develop APIs (Application Protocol Interfaces) that will
enable the distribution of their unique content in a rich and dynamic manner, using the solutions that
their preferred technology vendors will launch to market – based on the NDC standard/
To facilitate and speed up this transition, in 2015 a great deal of our efforts will be dedicated to:
2/ Monitoring and improving the performance of the schemas in order to ensure that they meet
market expectations in terms of scalability, security and ease-of-use of implementation; as a result,
we plan to release one new, major version of the schemas next year;
3/ Establishing and managing a certification process in order to ensure there is transparency and
visibility for those who have implemented the NDC standard
4/ And finally, producing the material required to help get started with NDC. We have recently
published the airline implementation guide and we plan to provide further tools such as ‘business
case simulator’ or a standard project roadmap to support airlines and their partners when embarking
on the NDC journey.
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The IATA NDC page contains up to date information and links to more information about NDC,
including the NDC blog (http://www.ndc-blog.iata.org). You can also sign up to receive the NDC Hub
monthly e-newsletter. Follow us on Twitter at #AirlineNDC.
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