This is a viewpoint from Alexander von Bernstorff, director of airline solutions at InteRES.

At the start of 2018, we entered year seven of NDC. As seven is a special number (and seven years quite a long period to run a project), I’d like to share my thoughts around the state of health of NDC.

I’ve been engaged with NDC since the outset, wearing an IATA hat, wearing an airline hat and also wearing the hat of an IT provider. I want to see this project mature, to see the airline industry catch up with what online shoppers have come to expect from other online retailers. This was one of the main drivers of the NDC project to begin with.

Let’s be honest – the way in which flights and flight related products are still being shopped today (in many to most cases at least) is outdated. There is too much (artificial) complexity that confuses consumers and frustrates employees of airlines, agencies and other stakeholders alike.

It is worth having a look to see if NDC is working in the way IATA originally intended it to.

Is NDC still on track?

We’re still standing.

To clarify, “we” refers those who argue that the industry got stuck with complex legacy technology instead of simplifying processes, and that the industry confuses customers instead of giving them more choice and better usability. “We” are convinced that NDC can foster innovation, lower market entry barriers and increase competition. But not everybody wants this and this is why it is an achievement on its own that “we” are still standing.

Although the industry has lost two-to-three years (my rough estimation), with IATA fighting political battles and trying to keep the NDC baby alive in the middle of the storm, it is quite an achievement that millions of bookings per year are today processed using NDC schema although we’d like to have seen a much higher number by now.

Furthermore, the fact that the project has reached the stage where the newest NDC version yet – 17.2 – is the most functional and convenient confirms the project’s success, despite strong opposition.

IATA says of 17.2:

“This new version features significant enhancements in terms of robustness and consistency, which will make NDC implementations for airlines and technology providers more effective and faster to market.”

With 17.2, IT providers such as ourselves at InteRES are to a large extent in a position to enable airlines of all kinds to start retailing. That is, selling more relevant products and services, in a more convenient way, to an increasingly informed and demanding consumer. Former shortcomings in the NDC schema will not serve as an excuse for not moving forward anymore.

It is important to note that a significant number of airlines have now engaged with NDC. The scale of airline engagement with NDC proves that thinking around distribution has moved beyond GDS costs.

But equally important is what I have learnt talking to more and more third parties, such as intermediaries of flight related services, airports and even aircraft manufacturers. Many of them are looking at NDC and ONE Order as a way to get their products and services to be offered by airlines, because as we know the flight shopping process comes first, and it makes sense to make the consumer aware of as many of his or her options as early as possible.

In other words, all kinds of service providers are beginning to see the benefits of what’s behind NDC.

That being said, we should already have the potential of ONE Order in mind, an inseparable complement to NDC as the enabler of simplification of processes and reduction of costs.

So, I think yes, “we” are on track with NDC, although “we” and the wider industry could be going faster.

Could more be done?

The scope of NDC addresses all functionality required to enable airline retailing and the theory behind NDC is sound. But our industry created the complexity – sometimes deliberately and sometimes by following the mechanics of legacy – that has to be overcome. The more of the old way of doing things we leave behind, the better. This is clearly where we can do better. Wherever there is room to improve consumer experience, new players will jump in and potentially disrupt an industry. Airlines may shortly see the next wave of disruption, 15-20 years after the low-cost carriers entered the market. Let’s simplify!

What some seem to have missed, though, are the implications of IATAs mantra that NDC is neither a system nor a database. There are numerous discussions dealing with the NDC schema, its messages, formats (XML vs. Json vs. REST is an often-used one) or the progression of the different versions of NDC. I believe these conversations largely miss the point because they somehow imply that once the standard is state-of-the-art (according to their own definition) mass adoption will commence immediately.

Since the beginning of NDC, I have been watching some stakeholders waiting for something magical to happen, for IATA to deliver something that can simply be adopted in a plug-and-play way. May the force be with us, but as far as I know IATA is not working on a supercomputer.

The point is that it takes all of us (or at least those who wish to improve selling capabilities to earn more money and get happier customers) to contribute to the project in order to shift from a 1970s approach to one fit for purpose today. We have to define our objectives, build strategies, invest in tools and services, to adopt test and learn. There are fascinating things going on, but it is for the service providers, with airlines leading the way, to leave the comfort zone and enter the unknown in order to learn what could work for them, and what not.

If we want – sorry, buzzword alert – a truly modular architecture and best-of-breed set-ups, airlines need to have capabilities that allow them to give IT providers the opportunity to demonstrate their products and how they can add value to whatever business model the airline has chosen. And while this is starting to happen, the point I am making is that this could have been talked about earlier. A part of the human condition is to wait for others to fix one’s own problems – IATA has suffered to an extent as a result by being held accountable for something which is not their responsibility.

Taking a different approach

The most important thing is for airlines to really engage with NDC and with the follow-on initiative ONE Order. Airlines are the ones who need to understand and shape the value chain. Airlines need to work closely with partners to find how value can be added. Tackling this from a distribution cost perspective is wrong. I have worked under a “cut distribution costs” brief several times and it has always proven to be a temporary solution, with some gains, but also with pains.

A better stance is to approach NDC from a customer perspective. How do our current and future customers expect us to sell what, and where? Modern retailing is largely about increased relevance of offers. Wearing the hats of our customers is the only way NDC can be approached.

ONE Order, in contrast, has to be approached with the desire to simplify all procedures along the value chain for better usability and lower cost. Airlines need to understand all aspects of this and oversee the introduction of ONE Order end-to-end.

Last, but not least: If “modular” and “best-of-breed” is an objective for IT departments to achieve more flexibility and reduce time-to-market, airlines must be in full control over their technological setup. They also need to be able to sketch their business processes and map them to solutions of several different vendors. A note is that these tasks are best carried out by enterprise architects, a species rarely seen within airlines. Airlines must gain a better understanding of modern (and not necessarily airline-specific) technology. With this in place, a much faster and more solid adoption of NDC and ONE Order is likely.

Be prepared for content differentiation

Remember: content drives distribution. As next-generation offer management systems are getting more mature, airlines begin to embrace new possibilities of delivering content in a more speedy, segmented and comprehensive manner. What we can see when talking to our airline partners around the globe is that the established and somewhat habitual way of delivering air content – which is content designed largely to accommodate the technical limitations – is slowly being replaced thanks to the conviction that things can be done differently, in a more simplified and retail-like manner.

With this in mind, not too much emphasis should be put on current purely financial actions taken by some airlines to incentivise the use of NDC-enabled channels. Airlines will be adopting a short-term test-and-learn attitude and build capabilities to manage their offers in a very flexible manner, taking advantage of the speed-to-market modern NDC-based software – such as our InteRES Retail Engine – can deliver.

The commercial model underpinning the moves by airlines to penalise non-NDC bookings may change quickly. Other than in the past, content differentiation introduced by airlines will not be removable through financial agreements.

Hence, the time for a wait and see strategy has gone. NDC allows traditional airlines to match or even exceed low-cost carriers when it comes to the creation of content, speed-to-market and using data analytics to find out what customers actually want and deliver relevant offers. Such offers will, as for the low-cost carriers, simply not be (fully) available through existing channels.

In the interim new intermediaries may enter the market, free to fully embrace the new technology, get closer to the customer and gain market share.

The potentials that NDC and ONE Order bring to the industry are massive. My team and I are committed to build airline retailing, from design to delivery of air content, tailored to the vision of NDC and ONE Order. InteRES covers the whole value chain from the supplier down to a travel agent’s desktop and all parties involved, airlines, tour operators and travel sellers should talk to us and find out how NDC and ONE Order can enable increased customer satisfaction, higher revenues and simplified processes.

This is a viewpoint by Alexander von Bernstorff, director of airline solutions at InteRES. It appears as part of the tnooz sponsored content initiative.