Travel Analytics Blog
NDC Standards – the route to industry success
Posted by Jonathan Boffey on Friday, July 29, 2016
In a recent article on Airline Information’s Ancillary blog (a great place for an insightful read on the topical challenges airlines face in growing ancillary revenues), the writer, Ritesh Gupta, points to the pitfalls of airlines going it alone when adopting API technologies to enable their merchandising e-commerce platforms. In the article Jim Davidson of Farelogix points out that “proprietary APIs are not always scalable for widespread adoption and repeatability can be difficult.” So to bypass these limitations when using third party distribution channels, the recommendation here is clearly to adopt “centralised and standardised APIs that can be consumed by all the different channels – web site, kiosk, GDS, mobile, etc”. In other word adopt the NDC standards without varying them to much case by case.
It is true that embracing APIs as part of their merchandising platforms does propel an airline’s indirect sales channel developments in the right direction. After all APIs are the plumbing that helps airlines reach travel agents with their rich content and more flexible offers. Indeed the whole online travel industry is underpinned by a complex web of distribution APIs. But therein lies the crux of the matter. Lack of standards adoption or cross-industry XML schemas by some of the early pioneers (intermediaries for example) has given rise to a spaghetti of proprietary APIs which can make connectivity and development more costly. A drawback that airlines at this juncture can and should avoid by adopting a more standards-based approach.
IATA, of course as the industry’s trade body, has been busy defining and promoting a New Distribution Capability (NDC) based on XML communication standards. Indeed NDC represents a unique opportunity to modernise air travel distribution ultimately giving airlines back control of their customer relationships. In distribution this essentially means giving travel agents access to the same functionality available on airline websites (i.e. the ability to pick and choose from a menu of ancillary options – at the time of booking, or later if preferred). NDC promises to deliver a dynamic vibrant marketplace that is not possible with today’s closed proprietary systems. The basic idea is that searchers including travel agents can get a fuller picture, of what airlines have on offer. This opens up greater possibilities to make purchase decisions based on value and not just on price, or convenience of route.
Standardised APIs also allow airlines to more easily leverage API analytics across all channels thereby gaining deeper insight into search and booking transactions useful for deeper analysis to get wide ranging insights into customer shopping behaviour, conversions into actual bookings, appetite for ancillaries or destinations as well as the performance of these different channels to an airline’s bottom line.
IATA’s NDC is a great opportunity to build an open market that will truly help the airline sector address their customers’ needs. The lack of a single XML standard such as NDC will lead to a fruit salad of XMLs. For example, the Hotel Distribution sector features hundreds of commercial XML schemas. There are tech companies who just offer ‘gateway’ services converting one XML schema to 50 others just to mitigate the financial costs and technical problems of supporting multiple XML standards. Unfortunately they can also increase response times in the supply chain unless they deliver advanced caching techniques and caching can lead to out-of-date data and disgruntled prospective customers. So it goes on.
Fortunately, NDC provides the opportunity for airlines to bypass this type of mess and participate, potentially directly, in a very open market with one major investment – an NDC API. Plus there is the growing NDC Eco System – it provides the opportunity to take advantage of off-the-shelf technologies to help deliver websites, portals, loyalty schemes, Revenue Management, apps or real-time BI insight and analytics.