A marketplace launched last week for sales of airline products supported by IATA's New Distribution Capability (NDC) is likely to serve as a bridge that carries travel agencies into the future, according to Phocuswright technology analyst Bob Offutt.

"This is going to be big unless NDC falls on its face, and I don't see that happening," Offutt said.

Known as NDC Exchange, the marketplace was developed jointly by the Airline Tariff Publishing Co. (ATPCO) and the air transport technology company SITA. The partners say the marketplace will enable airlines and travel sellers to adopt NDC more quickly and less expensively while supporting sales of complicated itineraries, such as interlining, which have thus far proven difficult.

A key challenge is a lack of compatibility among application program interfaces, or APIs, the sets of rules by which different programs communicate with each other. NDC Exchange will translate messages sent between APIs that were built on pre-NDC platforms and those built on NDC.

NDC Exchange does not offer aggregated itinerary searches as the GDSs do, but should it attract enough airlines, it would still serve as a facilitator for agencies searching for ancillary product offerings such as bag fees and bundled fares. Those are products that NDC capability supports but that are largely unavailable at present in GDSs.

Graham Wareham, the ATPCO's director of product portfolio, said that as of last week, seven airlines were already on NDC Exchange, though no leisure or corporate agencies had signed up yet. The service has been successfully piloted by several major airlines, including Air Canada and British Airways, the ATPCO and SITA said.

Wareham said that NDC Exchange's ability to translate messages among different platforms answers one of the complexities for airlines, GDSs and agencies that are developing NDC-supported direct-connects, since those enterprises have developed their APIs using a variety of often incompatible programming structures, known as schemas.

IATA, which developed the first NDC standard in late 2015, has since released four new schemas.

The marketplace spares users the effort of developing their own NDC-supported APIs.

"The work left with the seller and the airline is the commercial arrangement," Wareham said.

The ATPCO and SITA aren't the first companies to release an NDC-supported marketplace.

Among their competitors are Ireland-based OpenJaw and German startup Flyiin, both of which offer several NDC products that provide shoppers with offers from multiple airlines.

Wareham said that the ATPCO, which is owned by several airlines, believes it is especially well positioned to develop such an exchange since it already works with 430 carriers, collecting and distributing fare data.

Offutt agreed, noting that company IT directors are likely to favor an exchange run by ATPCO over one developed by a startup.

Both Offutt and airline industry technology analyst Henry Harteveldt of Atmosphere Research said that by developing NDC Exchange, the ATPCO is making a move to remain relevant in the future of airline distribution. Today, airlines provide fare data each night to the ATPCO for distribution to external sales channels, notably the GDSs.

But as they look to the future, airlines are contemplating the adoption of more complicated revenue-management models, including pricing that is made available continuously through the day and pricing that is tailored to an individual, depending on factors such as one's fare-shopping history and loyalty status. Such models could diminish the importance of ATPCO's existing business model, Offutt said.

In addition, Harteveldt said that as airlines have begun selling more ancillary products, some have become loath to provide all of their pricing data to the ATPCO.

"In a sense, this is a Hail Mary for the ATPCO and SITA to remain relevant to the airline industry," Harteveldt said.

He added that NDC Exchange could pose a threat to the Amadeus, Sabre and Travelport GDSs, which are in various stages of developing their own NDC capabilities. Success, Harteveldt cautioned, will depend on whether NDC Exchange offers quality functionality and good economies to airlines and travel sellers.

Offutt said that although NDC Exchange doesn't offer the kinds of aggregated searches provided by the GDSs, which are crucial to the workflow of travel agents, that could become less relevant in the coming decade if airlines move to continuous pricing, and therefore stop preloading fares to the ATPCO.

Though Wareham acknowledged that NDC Exchange could be a competitor to GDSs, he downplayed the notion.

Instead, he said, the marketplace is useful for the GDSs themselves. Joining NDC Exchange would enable them to more quickly develop NDC-supported connections with airlines, thereby ramping up their abilities to sell a more diverse offering of ancillary products.

The GDSs could do this, Wareham said, even as they fortify their internal NDC infrastructure.

"We're not here to infringe on anybody's business," Wareham said. "We're here to facilitate connections to the NDC standard."

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