Skift Take

It's ironic that new distribution capabilities got to the cusp of becoming real at the precise moment everyone stopped booking flights.

Many airlines and travel agencies are rethinking their technology spending plans amid tighter budgets. At the same time, they also want to get ready for when a sustained rebound in travel appears.

Airline executives have talked for years about how the sector should embrace novel ways of selling airfares. But change has been dripping slow. Countless airlines, agencies, and vendors have said they need to adopt new technologies, processes, and commercial models, yet most have been finicky about actually doing those things.

The best-known, overarching effort to improve how agencies sell tickets is the new distribution capability (NDC) — a set of standards for how computers talk to each other. The effort has run into stiff headwinds. Different airlines and agencies are running different versions of the NDC standards.

So some organizations have debuted “NDC Exchange” services. These services help normalize the data. That normalization is a bit like a voltage converter for electric current. An exchange lets airlines and agencies can talk to each another even if they’re on different versions of the technical standards.

Air Canada, for example, has since August 2018 been sending its data to agencies via an airline-backed effort is by ATPCO, the airfare clearinghouse formerly known as the Airline Tariff Publishing Company.

Other efforts have come, to varying extents, from travel tech giant Amadeus (see “Amadeus to Scale Up Its New Distribution Effort in 2021“) and its peer companies Sabre and Travelport.

The crisis has forced a scaling back of efforts. ATPCO has prioritized some other “essential” airline industry tech needs.

So, where do things stand with distribution tech now?

A More Modest Pursuit of NDC

Up until now, ATPCO focused on getting airlines like Air Canada, Southwest, United, and Virgin Atlantic up on its NDC Exchange. On Wednesday, ATPCO announced more agency partners that have begun to consume content through NDC Exchange.

For example, since July 1 Air Canada employees have been able to book so-called friends and family tickets via the exchange, thanks to connections powered by Montreal-based agency and tech company FareNexus Group. The company launched in May the advanced version of its nexusWIND product that is in production with Air Canada. The product aims to be a solution for travel management companies, travel agencies, and travel consolidators.

“Nexus solutions will give TMCs [travel management companies], travel agencies, and consolidators an option to generate bookings outside of many global distribution system processes and the related fees,” said Ravi Kumar Panwar, CEO of FareNexus Group. “This in turn has promised versatility.”

FareNexus Group is now connecting to other airlines participating in the ATPCO NDC Exchange, with Southwest and British Airways being the next to go live.

“Our solution has tangibly reduced the cross-platform connection time,” Panwar said.

Looking Ahead

An ATPCO goal for 2021 is to see how it can make use of the data connections for rich content it already has with corporate travel agencies, global distribution systems, and other partners. It aims to get those sales channels onto the exchange with the least amount of software development effort, said Jonathan Savitch, ATPCO’s chief commercial officer.

“We see a bifurcation of the market,” Savitch said. “There are those airlines that see NDC as an accelerant to recovery. They’re ring-fencing resources for this effort. But, airlines that are later to the party or had been getting started have paused.”

Having come close to perfecting the booking of basic tickets and content, development work has shifted focus to the exceptions that can come up, such as handling waivers, interline tickets, and code-share flights. Onboarding more airlines and agencies also remains a critical task.

“But for the next year, we’ve had to de-emphasize some things, like new methodologies for dynamic pricing,” Savitch said. “We’ll focus on leveraging capabilities we’ve already built.”

By the end of this year, ATPCO will support so-called next-generation storefront displays championed by American, Delta, and United, Savitch said.

Overall carrier expectations have changed due to the crisis.

“We’ve gone from a phase of adding branded fares and exploring new optional service,” Savitch said. “Now we’re in a phase that’s more about recognizing that this pathway offers a faster way to get updated and relevant messages to travelers about changing circumstances.”

The crunch in revenues also means that airlines are more likely to want to lean on a single path to connect to many sales channels, such as ATPCO’s NDC Exchange, rather than build lots of one-off connections via vendors.

An Easier Off-Ramp to Blockchain-Powered Distribution

Winding Tree, a company that offers distribution services powered by blockchain technology, connected in July to ATPCO’s NDC Exchange. The new process lets airlines and agencies connect to each via Winding Tree’s marketplace thanks to a proverbial flip of a switch, the company said.

“We launched a distribution marketplace on July 1, and we have built a bridge between that and Air Canada using ATPCO NDC Exchange,” said Winding Tree CEO Pedro Anderson. “It’ll be faster and easier for new airlines to come on board our platform.”

Winding Tree has built an open-source aggregator on its marketplace to sync its decentralized world of blockchain with airlines and agencies’ legacy systems.

“For airlines like Air Canada, the advantage is to have only one interface with all their sales channels, so to speak,” said Mathieu Tahon, a product manager at Winding Tree. “For us, our time is limited, so we can’t implement 10,000 different APIs, so connecting via NDC Exchange lets us easily connect with everyone else in the Exchange’s portfolio with least investment.”

The airline-owned ATPCO will, in the next year or so, look at gaps in the exchange’s core capabilities.

“NDC had focused heavily on point-to-point retail,” said Graham Wareham, director of business development and partnerships at ATPCO. “Consolidator fares, group bookings, and interline ticketing are areas we’re exploring. But the crisis has impeded our progress.”

For now, the much-heralded new ways to sell plane tickets remain a kind of corporate skywriting, divorced from how most agencies book travel. Yet the direction of travel for the industry continues to point toward innovation.

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Tags: ATPCO, ndc, new distribution capability

Photo credit: An interior image of a business class cabin on an Air Canada Boeing 787 jet. The carrier has been perhaps the most eager adopter of ATPCO's NDC Exchange. Air Canada

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