There was a time not so long ago when GDSs resisted IATA's
New Distribution Capability (NDC), viewing it as a technology of
disintermediation that would cut them out of airline booking channels.
How things have changed.
A flurry of recent announcements arising from GDS efforts to
develop and test NDC-enabled solutions -- and the promise of more to come --
signaled that the industry is ready to bring NDC into the light of day nearly
six years after the technology was introduced.
At its core, NDC is a set of XML standards designed to
replace the existing Edifact standard. NDC promises to be more flexible than
Edifact, enabling airlines to personalize offers and to sell all products,
including ancillaries, through travel agencies.
Bob Offutt, senior technology analyst at Phocuswright, said
that actually implementing NDC solutions has exposed a number of hurdles, but
NDC presents great opportunities for the industry, especially when combined with
One Order, an IATA initiative to merge passenger name records, electronic
ticket receipts and electronic miscellaneous documents into a single order.
"I think the best way to look at it is that the barrier
to entry is much lower," Offutt said. "To put an Edifact solution in
place took six months and somewhere around a quarter of a million dollars. With
NDC, the implementation is measured in weeks, not years."
Last week, both Sabre and Amadeus announced relationships
with several major travel management companies, naming them partners in their
respective NDC initiatives, Beyond NDC and NDC-X.
Sabre's Beyond NDC is an effort to develop, test and integrate
technology that will process NDC offers and orders. Sabre recently announced
its launch partners: American Airlines, American Express Global Business Travel
(Amex GBT), Carlson Wagonlit Travel and Flight Centre Travel Group.
Kathy Morgan, Sabre's vice president of NDC, called the
program "a huge step forward for the industry" and said Sabre "is
very focused on bringing NDC-based solutions to life at scale."
"As part of their commitment to the program, each of
our launch partners will participate with Sabre in the solution design process,
leverage beta-testing capabilities and establish their global leadership
position as drivers of NDC," she said on a call with reporters last week.
Morgan said she expected that more Beyond NDC partners will
be announced going forward.
Amadeus last week announced that both Amex GBT and Carlson
Wagonlit had joined its NDC-X program, aimed at driving practical use cases for
the technology. NDC-X was announced in February; its previously announced
partners included Qantas, Travix and Flight Centre Travel Group. Amadeus said
more announcements regarding NDC-X partners were expected shortly.
Ilia Kostov, Amadeus' head of business travel in the
Americas and global key accounts, said of NDC's development, "It has been
an evolution. It has been a process for some time now. As you see, Amadeus and
some of the other large players in the industry are putting their full support
and resources and energy behind it. It's starting to get real traction."
On Sabre's media call, Vince Chirico, senior vice president
of global network and technology partners at Carlson Wagonlit, said GDSs offer
travel management companies the best opportunities when it comes to NDC
solutions; he made a similar comment in a statement about joining Amadeus' NDC-X.
"We have yet to see a full end-to-end solution that can
scale to help a global [travel management company] like Carlson Wagonlit, so we
believe the GDSs are actually the fastest path to market," he said on the
Sabre call. "We think they are the only ones who can deliver a full
end-to-end solution at scale."
John Bukowski, Amex GBT's director of global content and
distribution strategy, agreed that partnering with GDSs is an important move
for travel management companies.
"We think that there's a lot of innovation out there,
and I think a lot of it is still to be determined," Bukowski said. "To
bring it across all of our corporate clients and all of our different [points
of sale], it's going to be really important to partner with the GDSs."
Amex GBT and BCD Travel are also working with Travelport to
implement new ways of selling using NDC, according to a Travelport spokesman.
Travelport is also working with several airlines, including Qantas and Air
France-KLM, on NDC initiatives.
"NDC is a significant change, but it is an important
opportunity not only to bring airline distribution into the fast-paced digital
world, but also to build a different relationship between all the parties, a
relationship that recognizes the value provided by each component," the
Travelport spokesman said.
IATA is encouraged by the GDSs' NDC efforts.
"We're excited to see these initiatives toward
transforming airline retailing in the travel agency channel moving forward,"
said Yanik Hoyles, director of IATA's NDC program. "The GDSs and [travel
management companies] are key partners, and we look forward to supporting these
efforts."
Phocuswright's Offutt said the GDSs' focus on NDC is
motivated by several things.
"It's happening now because of the development cycle,
the budget cycle and all the things that drive a large company to develop
software," he said.
On the other hand, he said, it could also be a defensive
move on behalf of the GDSs, since several major carriers, including British
Airways and Lufthansa, are working to facilitate direct NDC connections between
themselves and travel agencies. Given that, Offutt said, GDSs had "very
little choice" but to embrace NDC.
"That train left the station, and they [had to decide]
either to fight or get on it," he said. "And they got on it."
Industry analyst Henry Harteveldt, president of Atmosphere
Research Group, agreed that GDSs had been reluctant to adopt NDC, including as
recently as last year in some cases. But he said he'd noted "a sincere and
tangible change in the attitudes on the part of the GDS companies" about
the standard.
"What's important about this is that it shows
commitment among the larger industry leaders, and where the testing needs to be
done," Harteveldt said. "Because if NDC standards aren't going to
work effectively at one of the top 50 or so airlines and with the top GDSs and
the leading travel agencies and travel management companies, NDC will benefit
no one."
A number of hurdles initially stood in the way of NDC coming
to life, Harteveldt said, including the initial reluctance on the part of GDSs
to participate and confusion among agencies and travel management companies,
but that attitude has shifted.
"There is no longer the talk that NDC doesn't matter,
that NDC is hocus-pocus," he said. "You now have commitment."