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‘We should start seeing significant volumes coming through NDC by 2021’

Ludo Verheggen Ludo Verheggen

Ludo Verheggen, Director of Global Air Content Adoption Strategy, Amadeus Travel, shares his perspective on NDC.

New Distribution Capability (NDC) is IATA’s new data standard for XML-based data communications, which will give airlines the ability to distribute their content through third parties. Since NDC is based on XML technology, it will allow airlines to offer descriptions, more flexibility in terms of offers to travel agency chain.

How is the pace of adoption of NDC by industry?

As NDC is technology change, it will take time. Over the last 18 months, we have seen that many more complexities come into play. We have seen that NDC standard has been maturing quite a bit but we are not fully there. Until 12-18 months ago, most of the NDC API stats only cover the first part of the travel agencies need i.e shop and book. But, it did not cover yet the post booking functionalities that are absolutely essential for travel agencies. Hence, it makes it very difficult for travel agencies to start using this new standard. Now, over the last 12 months, we have to realise that NDC needs to go well beyond what was envisaged and there is a need to start putting the functionalities in place in order to be able to work well with NDC booking.

Currently, the foundation of NDC is being laid in the industry so that travel agencies can start working with NDC content and can start doing some fresh bookings but the whole servicing including booking part needs to mature much more in order for travel agencies to be able to work with the NDC content in the same way that they can work today on the GDS.

Ultimately, NDC needs to bring benefits to all of us in terms of new contents and new types of offers.  This is being currently put in place. IATA has put two new certification levels to address the topic of servicing i.e post booking functionalities. During 2019, we will start seeing the airlines are taking basic servicing through NDC and in 2020 we can see that airlines can handle the volumes and they can meet the need of the response time to make all of these contents available.

The 2020 Leader board initiative of IATA is done together with 21 airlines. There objective is to reach 20 per cent of booking by travel agencies to be based on the NDC protocol.

Given the current scenario where only 20 per cent airlines will be on NDC platform by 2020, how do you see the NDC gaining momentum over the next 2-3 years?

2018 was the year of building our NDC-enabled solutions and 2019 is the year for deployment of as we are open for business through our platform. We see 2020 as a year where there will be more convergence of the servicing. There will be further optimization of service. One of the challenges today we have is that servicing that has been implemented through NDC platform by various airlines is quite different from one to other. It also makes difficult for agencies to adopt it as there are different flows and different process and it also makes us difficult for us as aggregator of the content to have one flow.

One thing that GDSs have proved very strongly over the last 40 years is the fact that we are harmonizing all of the airline contents in one way and we allow with the same transaction to book, change, refund etcetra. By 2021, we should start seeing significant volumes coming through NDC as the industry should have reached to a mature level of the NDC standard not only for shopping but also for servicing part. Then it will gradually further take off. Even though we are convinced that NDC will start picking up soon, it will still go very gradual the majority of the airlines will still be distributing all of their contents through the traditional channels based on the traditional protocol.

How Amadeus is strengthening NDC program?

Amadeus has been advocating a lot that the industry needs to maintain the same level of performance. Amadeus is already Level 4 certified as an IT provider. This is a clear testament that we indeed are very much focused on our servicing part. 2018 was the year of building our NDC enabled solutions, 2019 we see as year of deployment through Amadeus Travel Platform. We have been live with NDC since November last year with our pilot customer in Europe. Our solutions are robust and scalable enough. So, we are currently starting to roll out our NDC solutions for travel agencies in the market and we expect that after summer, we will start making our new NDC enabled solutions to also available to the travel agencies in India. So, travel agencies those are using today API for flight content can start using our new NDC enabled web service for bookings and servicing customers. We will be enabling NDC content through same tools. This means that travel agencies around the world can start working in the same environment as they have been working today with NDC content.

There are already so many APIs available in the market. Does not it making the overall system more complex as same contents are available at different platforms and interfaces?

It is right. It is very fare to say that the content landscape has become much more complex over the last years with new players like low cost carriers coming in and growing globally. These carriers are already making content available through their XML based APIs.  This is a clear change that we have been seeing since several years. We see that content from the same carrier is available through traditional and NDC protocol. So, we see more complexities to the picture. We also see it as our job to simplify again for travel agencies. It is very difficult  for travel agencies to be able to support all these different APIs and Connections. Travel agencies are not technology companies; they are very good at servicing of customers and making sure that they recommends the best offer and service once the booking has been made.

We have been in the industry since last 30 years and we have the investment capacity to bring all of these together again. And, our strategy is all around over the Amadeus Travel Platform.  Our Travel Platform is the evolution of our global distribution system. So, we are a GDS with more than 100 thousands travel agencies connected worldwide and more than 400 airlines distributing their content. We have been enhancing our GDS to make it much more scalable than what it used to be and especially flexible. The flexibility comes from the fact that our distribution system is now fully based on open systems. We are the first GDS to have fully migrated out of ‘The Main Frames (TPF)’   into an infrastructure that is fully-based on open systems which allows to bring our application systems to the cloud and also allows us to have much more flexibility that we used to have. This new flexibility is allowing us to also be able to integrate much more different content from the technology point of view.

What NDC brings to the industry?

The most important thing with NDC is that it can source the content from the different source in a very easy and seamless way. This means that we can source the content through existing protocol from airlines and at the same time source through NDC and any other APIs that are doing low cost carriers. Then by brining all of the content together again from all different technology sources into the Amadeus Travel Platform what we can offer travel agencies worldwide is that by accessing one platform still, they will have access all the different content types and their sources. They will have automatically access to all those different APIs that we connect in the background by using our connect platform.

Airlines are offering most cost effective tickets. Is this a situation where airline is directly competing with GDSs that have been supporting them on distribution front since last 40 years?

Currently, everyone is investing heavily in NDC and all of us still need to see the return on investment. Airlines are developing their NDC platform. As Amadeus, we are the leading IT provider to airline’s NDC systems. Many airlines are and will be using our technology, our NDC system. Airlines are investing, GDSs are investing. GDS is even today a very efficient and cost efficient distribution channel for any airline.

The main reason for airlines doing NDC is because how can we make the pie bigger. All players will be benefitted if we manage to generate more revenue. Airlines, intermediaries and agencies will benefit from this as it allows them to make more personalized offers, bundled offers. This needs to be focused because if the focus is on cost only, this is not going bring the scale. If we want NDC to fly, it needs to bring benefits to all of us.

So, all players such as intermediaries, agencies, NDC will remain in the distribution chain?

GDSs have been investing a lot in ancillary services. We are also investing heavily in branded fares that allow airlines to up sell their offers inside the agency community. So, we already came quite a long and we still can optimize much more. There is a merit in NDC. If we want to make airlines offering a digital retaining experience, there is a need for technology to evolve. It needs to happen at right pace.

Airlines have been arguing that NDC is brining transparency, personalization and e-commerce experiences. What is your take on this?

It will be unfair to say that GDSs have not evolved over time. Ancillary services and fare family is available. Multimedia pictures are also available. We keep investing in making the visual experience more compelling. We have been heavily investing in these. One of the main differences between when it comes to personalization that works today and will work with NDC is that in today’s GDS set up when a travel agency does a search, the offers that are being provided to travel agency are the combination that a GDS has put together. We act as a buffer between the travel agencies and airlines and we process all options and combinations available to them and they can choose from there. With NDC, there will be a significant change because with NDC all offers are made available at airline’s site. We, as an intermediary, will make these offers to travel agencies.

Airlines can decide to make a very special offer to a particular travel agency. So, personalization is easier to do with NDC than GDSs. Transparency is already available at GDSs. GDSs are today unrivalled in terms of transparency. We are empowering all metasearch engines. So saying that GDSs cannot offer e-commerce is not fare.  

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