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
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
The ATPCO and SITA aren't the first companies to release an
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
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
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."