Is IATA replicating GDS system with NDC?
NDC is a travel industry-supported programme for the development and voluntary market adoption of a new, XML-based data transmission standard for communication between airlines and travel agents. It will be open to any third party, intermediary (like a GD
Q Will it work in the same way as the GDS Booking system and some of the XML based solutions offered by GDS's to agents and online IT booking companies?
While some GDSs have already begun to use some XML-based communication protocols, they have each developed these using proprietary standards rather than the open global standard offered by NDC. However, some GDSs have begun using the NDC standard as well. For example, last summer, Amadeus announced it was deploying the industry’s first NDC 1.0- enabled connectivity for travel agency distribution in North America to support the sale of United Airlines’ Economy Plus product.
Q Will it be free of cost for agents, IT providers etc. or will it come at a cost?
NDC is an open standard and available for downloading from the IATA website. It is not a system for distributing tickets, it is a data transmission standard. There will be costs associated with the transition to the NDC standard but IATA does not have an estimate. As more and more airlines, travel technology providers, GDS and agents participate in the ongoing and future NDC pilots and tests, we should get a better sense of transition costs. At present, more than 14 airlines have conducted pilots or have announced plans to do an NDC pilot.
Q If there is a fee, will it be segment based or is there a new business model?
NDC is not a business model or a system. It is an XML-based data transmission standard. Users will decide their business models for themselves.
Q Please give more details about the Innovation Fund.
Airlines and agents will require tools and applications to manage the rich content the NDC standard will enable. While we have every confidence in the abilities of existing players to use the NDC standard to develop solutions and capabilities, IATA has also partnered with Travel Capitalist Ventures, a leading travelfocused investment firm, to create the NDC Innovation Fund. The NDC Innovation Fund is a stand-alone venture capital fund. This fund will support innovation in airline distribution by investing in small- and
IATA’s NDC aims at addressing limitations in agency distribution by providing capability for travel agents to be able to sell products and services
medium-sized companies seeking to develop solutions which support airlines and agents as they leverage the enhanced distribution capabilities enabled by the NDC standard.
QWho
will benefit from this? The users or the airlines?
Air travellers, travel agents and airlines all will benefit from the adoption of the NDC Standard. Currently, an estimated 50-60% of airline tickets are sold via brick and mortar travel agencies and online travel sites, so this is a very important distribution channel for airlines. However, the vast majority of ancillary products and services are sold directly by airlines on their own websites, where cus- tomers are able to view detailed product information that may not always be easily accessible on systems used by agents. Furthermore, travellers can receive customised offers on airline websites.
IATA’s New Distribution Capability (NDC) is intended to address these limitations in agency distribution by providing the capability for travel agents to be able to sell these products and services as well. This will equip agents with more tools to better serve their clients, and as a consequence, air travellers finally will have access to full and rich air content and a transparent shopping experience when they shop with a travel agent or online travel site. Travellers will have the ability to have their status recognized or to shop anonymously. And air- lines will be able to give travellers a consistent shopping experience wherever they choose to purchase air travel.
QAnything
else you would like to share?
It is true that NDC had a bumpy start in terms of industry acceptance, but over the past 12-18 months we have seen a major shift as the benefits of the NDC standard have become more widely understood. At the World Passenger Symposium in October 2014, Amadeus, and Sabre Travelport each endorsed NDC and said they would use the NDC standard if their airline partners asked them to. And in December, IATA announced an agreement with a coalition of national travel agent associations to look at options that could benefit travel agents as the industry transitions to NDC.