LEESBURG, Va. — Technical and commercial challenges alike are responsible for the halting progress that the three GDSs have made implementing NDC, IATA's XML-based distribution solution.
What's more, the GDSs and travel advisors who use them have no particular incentive to push NDC implementation, since it could result in less revenue for them.
Meanwhile, it's still just a guessing game as to when NDC-enabled shopping will be widely available within the GDS channel.
"Easily two to three years, maybe four," predicted Bob Offutt, senior technology analyst for Phocuswright. "You've got to remember that you have to change the way that 50,000 travel agents shop for air."
Executives charged with leading NDC implementation at Amadeus, Travelport and Sabre were more optimistic on an Oct. 3 panel at the ARC Travel Connect conference. Still, they predicted it would take between six and 18 more months to reach NDC scalability.
So far, the GDSs are still in beta-testing phases of their NDC-powered connections, working with select travel agency partners. Meanwhile, under the IATA NDC Leaderboard Initiative, 21 airlines have said they aspire to accomplish 20% of indirect sales via an NDC-enabled connection by the end of next year. Such sales could be through a GDS-enabled NDC connection as well as via direct connections with travel agencies.
At the IATA General Meeting in Seoul, South Korea, in June, the trade group's director of distribution services, Eric Leopold, predicted that those 21 airlines would meet that goal. The GDSs, though, are less optimistic.
Ian Heywood, global head of new distribution for Travelport, said he thinks at least some airlines will reach the 20% target next year, but he added that for the most part, the GDSs will be the key to their getting there.
Cindy Tonnessen, head of NDC for Sabre, was more skeptical.
"I don't think we'll have the scale in place yet; that will extend into 2021," she said.
The executives provided explanations of the technical problems that make NDC implementation a plodding endeavor. For example, Heywood displayed a slide depicting a 33-part road map for developing the Travelport Trip Services NDC API.
"There is just so much that's got to be done," he said. "What you are starting to see is solutions going out in the marketplace. They are basic, and they are going to have to be built on."
The GDSs also said they can only go as fast as the airlines enable them to. Heywood said Travelport has had to wait on airlines to release schemata for various components of its NDC integration.
Tonnessen showed a video of an NDC-enabled search query response on the Sabre Red 360 desktop interface. The response populated slowly, which Tonnessen said was due to technological shortcomings from airlines that aren't ready for the number of users they will get.
Offutt said response speed is sure to be a major hurdle for the GDSs to overcome. The legacy GDSs were designed to handle 5,000 messages per second, he said. These days, they are handling 20,000 messages per second, and that number is growing. In addition, XML code is far wordier than the legacy GDS platforms.
The GDSs will also have to solve a variety of other challenges as they implement NDC-enabled connections, including how to retain dynamic prices in the memory system. But those problems could be secondary to challenges that deal directly with dollars and cents.
Stewart Alvarez, Amadeus' head of industry affairs for the Americas, said, "There's still uncertainly and a lack of clarity around what exactly is the commercial model."
Michael Strauss, CEO of PASS Consulting, which provides IT services to numerous major travel industry companies, said that while airlines do have an incentive to push NDC forward, GDSs and travel agencies do not.
Airlines lose out on approximately $16 to $20 per roundtrip on a GDS booking, according to estimates put forward in recent years by Lufthansa and British Airways parent IAG. But GDSs, to which the airlines pay segment charges for those bookings, and travel advisors, who end up receiving a portion of those segment charges from GDSs in the form of incentives, earn more if they use GDSs to do bookings.
Strauss said he expects airlines to pay smaller segment fees for NDC-enabled GDS connections. So, while the GDSs have realized they need to be prepared for an evolution toward NDC, which promises improvements in display and ancillary sales functionality, they don't have any particular reason to hurry.
Absent commercial agreements that would preserve their revenue stream, neither do travel agencies.
"None of the agencies I spoke to have any desire to book from the NDC channel, because they are losing out from NDC, from the commission override," Strauss said.