Questioning the travel industry status quo, one blog post at a time

Posts Tagged ‘GDS’

Now that DOT has cleared the storm clouds over NDC, airline conference rooms around the globe are being booked for meetings about NDC.  These meetings range from a simple, internal exploratory discussions on the NDC topic to serious “next steps” planning sessions on whether the airline will buy or build its own NDC API, while also prioritizing which GDSs and aggregators are ready to accept the airline’s NDC XML API when it’s ready.

© agsandrew - Fotolia.com

© agsandrew – Fotolia.com

Now before we get into whether to NDC or not NDC, I think a few clarifying facts and terms are in order. Along with the term “NDC,” one will quickly have to deal with terms and concepts like “NDC Solution Providers,” “Aggregators,” and “NDC Schema.”  So let’s start with some basic definitions.

NDC Solution Providers are generally technology companies, including those operating a PSS (Passenger Service System), that have both the capability and interest in building out airline NDC XML API connectors inclusive of comprehensive integration with the airline host and other systems, such as merchandising and pricing.  (In case you were wondering, Farelogix fits into this category). I like to call this group the Makers.

NDC-Capable Aggregators are generally distribution-related companies or travel technology companies that possess the capability to accept and integrate an airline’s NDC XML API with other airline content from one or more sources.  Obviously the GDS companies are the biggest of these aggregators, but there are a growing number of others making a name for themselves in this space.  I call these folks the Takers.

NDC Schema is the actual technical connectivity roadmap that is being standardized by IATA and airline/3rd party workgroups.  NDC Schema version 1.1 is anticipated to be finalized and published in Q4 of this year.

This version 1.1 schema will officially be the first technical “rules of engagement,” if you will, for those NDC Solution Providers and NDC-Capable Aggregators.  The Solution Providers (the Makers) will build out the airline connectivity, most likely starting with the NDC-shop, as this defines the offer/pricing creation at the airline level – the essence of NDC. The NDC Solution Providers will follow the NDC Schema so that the NDC-Capable Aggregators (the Takers) will have a reliable and consistent set of connectivity messages.  In other words, if an NDC-Capable Aggregator connects to two or more airline NDC XML APIs (even if for shop only) where those airline XML APIs were built by different NDC Solution Providers, they will send and receive consistent and expected data.  This makes the life for an NDC-Capable Aggregator a heck of a lot easier and enables them to scale and perform multiple airline connectivity for their customers in the most efficient manner.

Up Next… the real questions around “To NDC, or Not To NDC” because you know we just love to Ask the Question!

ZeusLast week’s PhoCusWright Conference in Hollywood, Florida, with its record-breaking attendance, had the theme “Cult of Context.” When prepping for the event I thought to myself, hey, it’s been quite some time since I have joined a cult and most of the scares and horrible nightmares have gone away from my last cult-joining experience, so what the heck, join the “Cult of Context.” How bad can it be? So I joined!

Session after session, innovator after innovator, offered up profound, or at least novel, examples of travel product personalization, content-relevancy generating algorithms, and example after example of delivering the right product to the right person at the right time. I’ll bet I heard that last expression 50 times throughout the Conference. By the way, as an aside, I thought the Conference was one of the better PCW Conferences I have attended. It was also Tony D’s coming out event as PCW’s new ring leader. Well done, circus-master TD, as you and the PCW team once again demonstrated how a thought-leader conference can be super-professionally run, inclusive of opinion and perspective, and even have a few streaks of fun. I suspect Mr. D will bring in a bit more of the latter, in his next PCW appearance.

Back to the “Cult of Context.” I had the wonderful opportunity of participating on a panel titled, “Flights of Fancy” with Kurt Ekert, COO of Travelport, and Bob Kupbens, VP Marketing and Digital Commerce at Delta. Tony D did his usual yeoman’s job of navigating us through thought-provoking questions about airline distribution, personalization, customer engagement, etc. We had a somewhat spirited discussion about the differences between Direct and Indirect airline distribution channels ending with what I thought to be a fairly profound general consensus that the lines need to blur and the gap needs to close between the two channels – even to the point of a suggesting that we (the industry we) lose altogether both the terminology and the notion that there is any difference between the two, at least from an airline’s customer engagement, brand differentiation, and product(s) delivery point of view. With the notable exception that travel agents or corporate booking tools may play a “proxy” role in product display and transaction delivery on behalf of the airline, thus adding their own value in the process but not impacting the actual airline offer for that particular customer or corporation. Read the rest of this entry »

In case you missed last week, IATA’s Alexander Popovich wrote a great piece in Tnooz explaining some of the fears and angst surrounding NDC. Definitely worth the read!

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NB: This is a viewpoint by, Aleks Popovich, senior vice president for financial and distribution at the International Air Transport Association.

Providing customers with more information and choice, enabling agents to sell a wider range of products and opening up a new realm of services more closely tailored to customers’ needs.

This should be a welcome development in the travel industry.

However, IATA is well aware that many in the travel agency community are concerned about IATA’s Resolution 787, the foundation document for the New Distribution Capability (NDC) project.

Yet despite the filing of 400+ comments and motions for or against Resolution 787 with the US Department of Transportation, there has been almost no attention paid to what is really driving travel agent angst over the NDC project: fear of the unknown.

Read the rest of the article at Tnooz.

I reread Sabre’s DOT comment on IATA’s Resolution 787, and what I really think it boils down to is them saying there is no need for a new standard because they can already do everything the airlines are asking for! Seems like they believe the world revolves around them. What about all those other aggregators, GDSs, and airline distribution partners that would benefit from having an airline connectivity standard?

According to Sabre, it appears like the only thing airlines have to do is purchase (I’m assuming they won’t give it away for free) some route-based advertising in Sabre Red’s “Graphical PromoSpot” and boom—product differentiation completed. Don’t worry airlines, you can also get a Text PromoSpot for agents still using the cryptic screen. Funny thing is, we believe airlines want more than just highlighting amenities and services. It’s about transacting dynamic, personalized, and relevant offers at time of search and throughout the travel process, like many airlines already deliver on their website.

At any rate, Sabre sums up their position well here, “That assertion [Resolution 787] is that new technical standards, to be jointly agreed and jointly controlled by airlines under the auspices of IATA, are needed because, it is claimed, GDSs, such as Sabre, will not otherwise be able to support efforts by airlines to highlight their amenities and services and to make “personalized” offers to consumers. This assertion is not true.”[1] Read the rest of this entry »

I had the privilege of presenting to the fine folks of the FBTA last week. This is not my first time with the group, and knowing they can be a little feisty at times, I came prepared to bare all. There is no holding back with this group. They remind me a lot of the group from LABTA.

My presentation was all about airline ancillary services and the impact these might have on corporate travel managers and their travelers. Whether it’s a new bundled airline product freshly negotiated by savvy travel managers or a set of company-authorized a-la-carte optional services based on trip type or duration, a whole new world has opened up for today’s corporate travel managers… if they want it that is. I bet most will, but I suspect some will run for the hills because navigating in this new world where the corporate travel managers are negotiating the travel experience is new territory. The days of simply negotiating a discount in return for volume are long gone.  And simply getting your travelers an entry-level frequent flyer status just won’t cut it.

As is typical with this group, presenters only get through their first three slides before the “Hands of Challenge” arise. No different this day, but I expected and prepared for it. In reality, this is really what I love about this group—dialogue! Ok, maybe more like pointed questions, but I love it anyway. At first they seemed very school-like by raising their hands and politely waiting their turn to ask, but that only lasted a few minutes. We talked about how airlines are working hard to create an “experience” for their travelers rather than just a trip, and how travel managers now have the ability to influence their travelers experience by engaging airlines to customize product bundles based on type of travel—say a training venue versus a sales trip halfway around the world for the top salespeople in the organization.  Read the rest of this entry »

Empty_Box_Person_Looking_InOk, sometimes I am easily confused, but this one is taking the cake. I am totally confounded because in the last several months practically everyone I have spoken to—travel agencies, corporate travel managers, and even GDSs (well, Sabre and Farelogix aren’t really on speaking terms lately, so not all GDSs)—has expressed interest in having viewable, transparent, and bookable access to the various airline merchandising and ancillary services many airlines have on their websites. Everyone wants it, which makes perfect sense. Having access to more options that are relevant, up-to-the-minute, accurate, and maybe even personalized for the individual traveler making the request is clearly good for consumers, corporate travelers, corporations, travel agencies, OTAs, and GDSs. It’s good for everybody!

Enter IATA. IATA, through its standards-setting body, has developed its optional NDC initiative. This standards initiative was developed with input from various travel supply chain players. They worked long and hard to define a technology integration and workflow standard that enables an airline to deliver relevant, up-to-the-minute, accurate, and maybe even personalized offers to travel agencies, consumers, corporate travelers, corporations, OTAs, and GDSs. So, essentially IATA is enabling more airline content to be delivered and more is good, right?  Read the rest of this entry »

We couldn't think of a good picture for this blog, so we went with a classic gif: Monkey Washing Cat.

We couldn’t think of a good picture for this blog, so we went with a classic gif: Monkey Washing Cat.

I read Mr. Pestronk’s recent response to the NDC question with fascination and bewilderment. Clearly some education and clarification is needed, so I thought it best to go through parts of his article and add my comments. They are in bolded italics.

Think of NDC as like American’s Direct Connect except that, instead of being pushed by just one airline, it is going to be backed by all 240 IATA airlines, including all U.S. legacy carriers, at the same time. When you say, “think of NDC as like American’s Direct Connect,” are you referring to American’s Direct Connect to Travelport, whereby Travelport will connect to American using the NDC standard with the only difference travel agents will notice is that they have all the ancillaries that American offers and can therefore provide their customers with up-to-the-minute, authenticated, and perhaps even personalized offers? Because that is truly what accepting NDC means. It means an airline can use one modern, flexible pipe to connect to all distributors. No longer would there be a need for multiple pipes with separate and different standards on how to connect. Instead everyone would connect in the same way.

IATA has asked the Department of Transportation (DOT) to approve the agreement setting up the rules for NDC, and interested parties have until May 1 to file comments. True, and if you are a travel agency, I think you should encourage DOT to approve NDC as soon as possible so airlines that choose to adopt this new connectivity standard can get on with delivering that precious content travel agencies and their corporate and leisure customers want.
Read the rest of this entry »

In my opinion, Global Distribution System (GDS) companies wield significant horizontal and vertical market power over the airline ticket market serviced by travel agencies. The GDSs have three primary customers—airlines, travel agencies, and third-party technology providers. Over time, the GDSs have intentionally crafted their relationships with their customers to build and solidify a market structure impenetrable to competition. This deliberate process was put in place as each commercial relationship came up for renewal.

The net effect of having a “tied-up marketplace” is harm to consumers. They find themselves having fewer airline product options and paying higher airline ticket prices than they otherwise would, given an open and competitive ticket distribution market. Additionally, the ticket distribution market suffers with a higher-than-necessary cost structure due to the GDSs blocking innovation and lower-cost distribution alternatives.

The Circle That Ties

To preserve their market power and block competition, the GDSs have implemented contractual hooks into each of their commercial relationships with airlines, travel agencies, and third-party technology providers.  Read the rest of this entry »

© govicinity - Fotolia.com

© govicinity – Fotolia.com

It was recently reported that the Business Travel Coalition’s We the People petition—advocating for needless government regulation of airline ancillary products—failed to garner the required signatures. The petition was just over 20,000 short of the required 25,000… not a very stellar performance. Still, we give BTC credit for attempting to raise awareness about the importance of transparency in our industry and wanted to take the opportunity to offer some feedback and even a suggested next step.

As we see it, here was the problem with the BTC petition: it was focused on a false transparency problem and ignored a real transparency problem. Let’s face it, it’s time to let go of the illogical premise that airlines are withholding ancillary information from travel agencies as part of a master plot to bilk the consumer. Not true! The real problem is that the GDSs lack the technical prowess to sell airline ancillaries in the flexible and dynamic way the airlines want to sell them while protecting their brand—just like any retailer would want. And by blocking new technology entrants in the world of distribution, the GDSs seemingly have no real incentive to improve their technologies in a way that would solve these challenges and allow for the sale of ancillary products in the personalized, dynamic way sought by airlines and consumers. Read the rest of this entry »