FORT WASHINGTON, Maryland -- ARC is working toward offering
customized settlement services as it prepares for a future with an increasing
number of air transactions using IATA's New Distribution Capability (NDC).
The initiative, called Distribution: Evolved, will enable
ARC to handle the broad array of negotiated transaction terms between travel
agencies and airlines, whether via NDC-enabled direct connects or the NDC-certified
GDSs.
"As you are going through your own transformation, we
want to work with you," ARC vice president of product Doug Mangold told
agency and airline back-office executives during a presentation at the ARC Travel
Connect conference Friday at the Gaylord National Resort. "Don't make an assumption that as you're going
through your own transformation that you're working with the same old ARC."
This year, ARC completed a technology upgrade to allow for
automatic settlements of NDC transactions. NDC, which is a set of XML standards
developed by IATA, enables airlines to sell their full array of ancillary
products via the agency channel, rather than exclusively through direct
channels.
Through the Distribution: Evolved initiative, ARC will still
offer its standard settlement model. But it will also develop NDC models for
airlines and agencies that can be customized. For example, Mangold said, a
traditional GDS transaction enables agencies to void a ticket anytime through
the next business day. But in an NDC-enabled relationship, the airline and
agency could agree that transactions must be voided within 24 hours, even if
that 24-hour period runs into a weekend. Through Distribution: Evolved, ARC
intends to be able to tailor its settlement service to handle such specialized
terms.
Mangold said that it is thus far unclear whether ARC will
charge a premium to agencies that require custom settlements. Upgrading ARC's
technology to support the custom settlement model will take two or more years.
"As someone said, we're changing out the engine of the
airplane while we're still at 30,000 feet," Mangold quipped.
In 2017, ARC settled $88 billion in transactions between
airlines and travel agencies.
Currently, 65 airlines around the world are NDC-certified,
meaning they have NDC deployment in production, IATA spokesman Perry Flint
said. He added that the volume of NDC transactions is difficult to track but is
low.
Twenty-one airlines are participating in the NDC leaderboard
initiative, which means they've set a goal of having 20% of sales facilitated
by NDC by 2020.