NDC Program Director Yanik Hoyles: Buyers Are Open To Change

• What is NDC anyway?
• How it could change the role of GDS providers
• Benefits for travel buyers and travelers if the industry embraces NDC

In a recent Carlson Wagonlit Travel survey, one-third of travel managers identified the International Air Transport Association’s New Distribution Capability as having a significant impact on their travel programs in 2016. Yet many don’t know much about the standard, which enables each airline to control and curate the fares and ancillaries it sells through various channels.

BTN: There’s a lot of talk about NDC being a standard, not a solution. What does that mean?

Hoyles: NDC is a way to transport data with data fields. The goal of the messaging standards is to help all the different parties trying to communicate—in the case of NDC, that’s airlines, GDSs, self-booking tools, travel agencies, etc.—to use similar ways of exchanging messages.

BTN: Airlines initiated the creation of the NDC standard. What are the carriers wanting to do?

Hoyles: The world of distribution today is really commoditized. Airlines essentially can only push out a pricing schedule; it’s very limited. In an NDC world, they can include rich content, product descriptions, options and ancillaries, etc. The standard enables this.

BTN: It’s the technology provider—a GDS or an Online Booking Tool—combined with the commercial strategy that gives the new capabilities practical application?

Hoyles: When an airline has the ability to expose all this content, one airline may decide that its commercial strategy or distribution strategy is to do fare families—something that includes a seat, a bag, change fee, for example. Another airline might just expose flights, the price to go from A to B; then, if people want to purchase ancillaries, they do that themselves. Today, it’s too difficult. In an NDC world, the airlines will be able to decide what their own distribution strategy is.

Let me take it one step further to a corporate. Airlines offer [preferred corporates] an X percent discount. In an NDC world, the opportunities could be twofold. They’d be able to negotiate an overall package for a company’s travelers—for example a flight rate that includes one bag or maybe a flight price and a couple of ancillaries. Alternatively, the airline and corporate could agree to just a flight price for most travelers but maybe there are one or two categories of travelers to whom the company would like to offer lounge access. The corporate establishes to whom access should be given, and the airline can expose that content to those travelers.

BTN: So Will the GDS fit into the NDC picture?

Hoyles: In today’s indirect distribution, the GDS actually constructs the offer: the GDS goes to [the Airline Tariff Publishing Co.], to OAG, then to the airlines for availability. Then, [the GDS] constructs the offer. In NDC, the GDS plays a role similar to their role with a low-cost carrier like Ryanair today. Ryan doesn’t file fares with ATPCO. Instead, it exposes an [application program interface] where the offer is already constructed and Amadeus or Travelport consumes that offer and displays it all back.

We see the GDS as really well placed to play the role of an aggregator in an NDC world because they’ve got the connectivity of the travel agent, because they’ve got great skills and great know-how, so they’re very well placed to play the role. Some of the new players could do [so] as well, but the GDS is very well placed.

BTN: What you just described—consuming pre-constructed Offers and Targeting Content—suggests a departure from standard full-content GDS contracts. Is that coming?

Hoyles: I can’t answer that. That’s really up to the airlines; it’s their commercial relationship with their partners.

BTN: IATA has been working to engage travel buyers on what NDC could mean for their travel programs. How has that been going?

Hoyles: We’ve got 10 major European buyers who meet with us [twice a year] for a day and a half. I’m sure that you know that community. They’ve got way better things to do if they didn’t see any value in spending a day and a half at IATA. They also help us by spreading out to their networks and bringing feedback to us.

BTN: What benefits are rising to the top as IATA engages with the buyer group?

Hoyles: No. 1 is policy enforcement. [Travelers] go out of policy because they can’t buy the options through the corporate portal. In an NDC environment, all the options and ancillaries can be a part of the framework. Second is cost control. Today, you can only negotiate a flat price because the airlines can’t really deal with this stuff. Tomorrow, the airlines can push out many more ancillaries, and that gives buyers more negotiating levers. They will also be able to forecast and report better on what is really happening. And the last one is better process enforcement because all the information is coming through the same portal. It’s just simpler.

BTN: How would NDC benefit travelers?

Hoyles: We hear more companies concerned about the well-being of their travelers. NDC puts more traveler benefits within the buyer’s control, and therefore [the corporation] can negotiate better and provide a better experience. Also, the payments process for the traveler. We go through an online booking tool and it’s just pricing seats. If I want to buy any ancillaries, I’ve got to get on the airline website, get on another website, and then I’ve got to reconcile my expenses. It’s just painful. [And] loyalty recognition. If you’re happy for your frequent travelers to be recognized by the [preferred] airline, that can flow through your control, as well.