It’s hard to gauge the current status of IATA’s New Distribution Capability, the airline distribution technology standard, and the twists and turns in its journey.
Step back from the announcements around who has achieved what level of certification, initial moves from airlines and changing commercial models, and it’s still early days.
An interesting snapshot was provided by Travelport global head of product and marketing Ian Heywood during a session at the CAPA Airline Leader Summit in Dublin last month.
He talked about “202020”, the catchy title he has given the IATA leaderboard of the airlines who have committed to having 20% of their indirect transactions booked via an NDC-driven API by the end of 2020.
The organisation is hoping for between 15 and 25 airlines to participate in the leaderboard and will track their progress.
According to Heywood, NDC is no longer an “if”- it’s now about the what, why, when and how of getting the technology standard out there.
The standards, he says, are “starting” to firm up but he adds that starting is the key word because it’s only with version 19.2 that there it will start to be more robust and there will be some consistency.
However, while IATA NDC program director Yanik Hoyles talked recently of 2018 as a “year of plumbing”, Heywood thinks it will be a bit longer, with 2018 and 2019 more realistic. He adds that 20% is a significant number and hardly anything goes through API currently.
“I think the plumber has opened the boards under the kitchen, had a look and taken a big breath in and said this is worse than we thought.”
He goes on to list the five main reasons for the move to API:
- Control – control of bookings and offers from within their own sytems
- Improving sales capability
- Reducing reliance on PSS and putting a merchandising layer in place which enables airlines to be more nimble
- Commercial models
He points to BA as one of the few airlines beginning to use API technology in a positive way through its short-haul pricing initiative.
He also touched on the how of getting to 202020 and encouraging the agent community to use APIs and whether it would be carrot or stick or, as he concluded, a mixture of both.
“At the moment a lot is the stick and part of that is because a lot of the technology is not in place to allow carrot to be used as effectively as it should be so you’re seeing the surcharges and content being pulled from ATPCO.”
And, right now airlines are experimenting with different methods to engage third parties such as surcharges from some carriers such as Lufthansa and BA and the American Airlines agents’ incentive.
“It’s the start of different things happening in the marketplace and around the globe. Some agents are desperate to get involved. Some are saying how can we stop this happening and others are saying ‘we will be a close follower’.”
Come 2020 however and Heywood believes the technology will have moved forward driven by the focus from IATA and the commitment from airlines.
And, while it seems to be taking a long time, let’s not forget IATA first announced NDC in late 2012, Heywood says there’s a lot to do. Airlines have to build the API, plenty have still not developed the technology. Then they have to put the merchandising capability in place and test it.
Some dissenters in the room including Ryanair chief operating officer Peter Bellew had strong views on how long it’s taking. Speaking as part of an airline distribution panel, he said:
“API is not new and it’s not such a big deal to do. I don’t know why it has been so slow. Elon Musk will probably have mean on Mars by 2020. The problem is we start thinking it is acceptable to have these things ready by 2020. If we don’t get our heads around it, everyone else from Amazon and Facebook to Apple, will eat our lunch.”
He also proposed IATA put a “disruptive team” in place to get things moving more quickly.
And, Mezi vice president of travel strategy and partnerships Johnny Thorsen pointed to the paradox of using the word “new” for a 12 year old technology.
“How can it be disruptive if it takes five years?”
Reporter’s attendance at the CAPA Summit was supported by Travelport.