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IATA ‘Leader Board’ Airlines Get Ready To Push Real NDC Transaction Volume

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IATA ‘Leader Board’ Airlines Get Ready To Push Real NDC Transaction Volume

Mar 23, 2018

For all the talk about the International Air Transport Association’s New Distribution Capability, transactions flowing through the agency channel in accordance with the distribution standard are minimal. “The transactions are extremely minute today; that is absolutely true,” IATA NDC program director Yanik Hoyles said this week during a panel at UATP’s Airline Distribution 2018 conference in London.

Yet, IATA is establishing a program for what it called Leader Board airlines engaged with NDC. These carriers each will commit to delivering at least 20 percent of their volume through NDC-capable application programming interfaces by 2020, said Hoyles.

Already, between 15 and 25 airlines are expected to participate in the Leader Board. Those carriers represent between 20 percent and 30 percent of all IATA passenger volume, said Hoyles.

“These guys are going to push for volume, for critical mass by 2020,” he said.

According to IATA’s NDC registry, 53 airlines are NDC capable at some level, and 42 of them are certified at Level 3, the highest. Still, there are 280 IATA airline members. There will be first movers, and there will be followers.

“Amongst the 53 airlines that are live today, 12 of those have actually applied a commercial strategy on top of their NDC implementation,” said Hoyles.

Those would include American Airlines by way of its incentive program for NDC adoption, as well as the largest European airline groups that have levied surcharges in part to spur NDC adoption.

To date, NDC activity has been about laying the foundation. The next couple of years are about meaningful penetration.

In addition to progress with airline buy-in, the three major global distribution systems have committed to achieve Level 3 NDC certification. Travelport is already there. Last year’s launch of the 17.2 version of the IATA NDC schema is viewed as stable and scalable enough to support volume.

“2018 is a year of plumbing,” said Hoyles. From mid-2019 to 2020, he expects to see “really strong growth in volumes.” He added that IATA also plans to measure transaction volumes for Leader Board airlines to monitor progress.

“If we can have 15 to 25 airlines who by 2020 have got 20 percent of their volumes using an NDC API, they will have done a lot of work” to lay “the plumbing” and to work commercially and technically with GDSs, aggregators, travel agencies and corporates.

“Then, for the followers, their speed to market will be a lot faster and their barriers to entry will be a lot lower,” said Hoyles.

Air Canada is among Leader Board airlines, senior director of global sales corporate development and operations Anthony Doyle confirmed during the panel.

“Today, we have an API that’s in market,” said Doyle. “Over 57 percent of our market in the domestic North American environment comes to us in the direct channel. So we will be transitioning partners into the NDC environment through the [ATPCO/SITA NDC Exchange] and that will catapult our reach into a number of markets, not only in Canada but also outside our home base.”

During the panel, Amadeus VP of the NDC-X program Gianni Pisanello agreed that significant adoption is approaching.

“Last year, we did a lot of studies at Amadeus to understand what was the level of maturity on both sides of the market—on the airline side, on the travel agency side—as well as the maturity of the NDC versioning, etc. We came to the conclusion—after talking to a lot of airlines, a lot of travel agencies and with IATA—that we have reached the tipping point in terms of certain basic elements to be in place in order for us to start thinking about industrializing NDC.”

Pisanello added: “It’s going to take a few years. We have to put the plumbing in place, but it’s inevitable; it’s going to happen. There’s no: ‘Is it still going to fly or not?’ The processes in the background are set and are in motion, and they are going to deliver NDC.”

To view the full article, click here.






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