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Amadeus' Ludo Verheggen (left) and American Airlines' Neil Geurin discuss:
Amadeus this month published a report dubbing 2021 as "the year of scaling" for the International Air Transport Association's New Distribution Capability standard, citing airlines' development and release of bundles and travel management companies going live with NDC content. Amadeus director of global air content acceleration Ludo Verheggen, along with American Airlines director of distribution strategy Neil Geurin, recently spoke with BTN transportation editor Michael B. Baker about the progress each have made with NDC and what to expect when IATA releases its newest schema for the standard. An edited transcript follows.
BTN: How has progress with NDC advanced during the pandemic?
Ludo Verheggen: We're 100 percent committed to drive NDC forward together with our partners in collaborating with the whole industry. We're very excited where we are today. With American, we started the rollout of NDC worldwide at the beginning of this year, and we're already live in 50 markets around the world. Over the next few months, we'll be going live in all of the Americas. By the end of this year, we will make sure the whole Amadeus travel agency community can at least get access to the NDC content so they can start making their first steps as well. The more of us who start making the first steps, the more we can really bring this to the volume that we like to see and rebuild travel in a better way thanks to that technology.
Neil Geurin: We are spending a lot of time getting ready for our corporate customers to come back, starting late this year or early next year. What I've been focused on in the distribution space for the last five years is to get to the point where we never have to talk about NDC anymore, because it's just distribution. It finally feels like, thanks in a huge part to the work Amadeus has done, that 2022 will be the year where we don't have to talk about NDC anymore. It's just the content that customers want, and it's available to them in their channels. After that, what we talk about is product. We are now finally on that path.
BTN: Did the pandemic alter your course?
Verheggen: The strategic importance of NDC has not changed, and if anything, it probably has only increased. Now that we're gearing up for the recovery of our industry, for hopefully much more travel to start soon including the much-awaited corporate travel, we want to highlight how NDC can help all of us—airlines, travel sellers and corporate travelers—to rebuild travel in a better way, a more personalized way, a more dynamic way and a more modern way. There are still some areas where work needs to be done, and collaboration is especially key.
Geurin: It's been an unusual last year and a half for us, but we've all had an opportunity to take some of this time and get ready for corporate travel, which is going to come back. We look at what we're doing with Amadeus and with NDC in general as the foundation for how this is going to work for the next 10, 15 or 20 years in all likelihood. We announced earlier this year a few NDC-driven products, Main Plus being the most notable of those, a product available for a customer so they can get access to a slightly better seat in the coach cabin, preferred boarding and an extra bag. The idea as a test was that we have corporate customers who today are buying all of those things in disparate ways, jumping through hoops to do that. What if we put it all together and made it really easy for them to transact with? We are big believers in testing and learning, and this year, running that out to see how it would go and work through the process of bringing this into new channels every day, coming very soon to Amadeus as well. We found it's an incredibly popular product. We sell a ton of it, so we're really happy with how it's gone through the first year. Because that's been great, at American right now we're building more products that will come out late this year and early next year. We will have a number more products available and work with the partners we have at Amadeus who want to book via and agency or [global distribution system].
BTN: Are those initiatives still focused on corporate travel, or are you targeting leisure travel, since that is what is recovering at the moment?
Geurin: We don't limit ourselves. We look at all the opportunities on the table. One of the things that Covid has done for us is opened our eyes to the possibilities for NDC in the leisure space as well. You're going to see huge growth in leisure NDC options through the course of the next year for sure, but we also see opportunities to bundle up different packages for corporate and small business customers, too, so we're working on all of it.
Verheggen: It's these types of initiatives, the new types of bundles that can only be distributed through NDC thanks to that technology, that's really helping us to make those steps we now need to make. One of the missing elements over the last few years was that it was often more about certain fares by some airlines being taken out of the regular GDS channel and put into NDC. That doesn't necessarily create the traction we need. It's these types of new products that create traction because they are a way to showcase the possibilities of NDC, and we're only at the beginning of that. Talking to travel sellers across the world, and especially with corporate travelers, that this type of new product of new bundle, it's what they're looking forward to and what's going to drive adoption.
BTN: Have the lower travel volumes during the pandemic offered any advantage on getting new products rolled out?
Geurin: One of the interesting things that this pandemic period has done for the industry is while the corporate travel has been light, leisure has not. What that means is that customers who typically might have been corporate customers prior to the pandemic and will be after it's over have been making bookings but not through their corporate booking tool. One of the challenges of NDC all along has been to get it from us to the corporate customer. We've needed a connection from a GDS that's NDC-capable and a [travel management company] that's-NDC capable and a booking tool that's NDC capable. There were a lot of parties that had to hold hands and come together on this, and many corporate customers did not have all of those parties on the same page at that time. What they have had in the last year and a half, they've been using airline direct sites, OTAs, metasearch engines that are very NDC-capable in many cases, so they've seen the possibility of these tools. When they come back to corporate travel, if their corporate travel tools don't have those capabilities, they will recognize right off the bat that there are things that are missing that they want, and they can help drive adoption across the industry.
Verheggen: One of the main advantages of NDC is that it allows our industry to reach a new level of regularity, in terms of the type of offers being made and also the information around those offers that can be interchanged between the airlines to the corporate traveler, thanks to that new level of granularity. It's being much more clear around the information of what's included, what's included, the benefits of the different offers, it's really going to help corporate travel, because it's going to create so much more clarity for all of the stakeholders.
BTN: What will the upcoming new schema for NDC from IATA mean for progress?
Geurin: We've gone through the last few years dependent on the schema of the 2017 time period. While I don't envision a world where we're making these changes all the time, every so often it's good for everyone to come to agreement on a base level of schema so we can work collectively and much more easily on products going forward. We don't want to do this every year for sure, but every few years or five years to step back and re-level the playing field for everybody is a good idea. We're thinking about how we can help our partners do that, because it is a lift for them to do so, but with new partners coming onto that standard, they're going to start off in a really good spot. It does feel like we've hit the right time. We have enough progress made since that 2017 standard was put in place to have a new baseline that works for everybody.
Verheggen: What we all need to be conscious of is that we've been learning over the last few years in our NDC journey. A lot of airlines started their NDC journey in the 2017 version, others started in 2018 or 2019. Many of them started at a different point and with a different version, which has created clear differences in the way they were implemented and interpreted by the airlines or IT providers behind it. With the new version, 21.3, all these learnings from the last four years are being used to create a newer, more complete and clearer version with clearer guidelines of how it should be implemented. There, the collaboration piece has been key, because we've been working closely with our airline partners and IATA, being the owner of the standard, to see all the things we can improve. We are very hopeful that with the 21.3 and subsequent versions, we can create an environment with more standardization, and that will be to the benefit of all of us.
Geurin: I'm actually excited about this because one of the challenges that NDC addresses is that the technology underlying at least air travel didn't really change at all for a period of about 25 years, so getting to a rhythm to where we can update the way we do this every handful of years is the right thing to do. If you look at any other technology, that's what's happening, and we just didn't do that over the last three decades in the air space to any degree. Getting to the point where we have a reasonable transition period where we actually get up to speed with the newest technology every so often is a sign that we're much more healthy than we used to be.
BTN: Where are your TMC partners on this journey right now?
Verheggen: Within our NDC-X program, we've been working closely with all the large global TMCs from the beginning, so it's been great to see the progress that has been made in that space over the last few years. For TMCs, NDC is bringing the biggest change, because the whole TMC environment and ecosystem is very tightly integrated with the GDS world and all the processes the GDSs have been developing over the last 30-odd years, with the EDIFACT standards. That means for a TMC to become really efficient with NDC and be able to give the same level of service all the corporate customers are used to, it's a huge undertaking for them. It was great to see they joined the journey from the beginning and especially was exciting that we are piloting with pretty much all of them, and all of them are really gearing up to be NDC ready by the end of the year. It's not enough for online booking tools to have the NDC content integrated, which is an important step, but the TMCs also need to make sure that all their downstream processes and all the tools they are using need to be adapted as well.
Geurin: If we do our job well here and develop products and services that customers like and appreciate, that means they'll be more satisfied, which should lead to the whole ecosystem being happier, healthier and better partners going forward. We open up new opportunities for partnerships between TMCs and airlines, between TMCs and booking tools and between TMCs and their GDS partners. This gives them an opportunity at being experts on servicing these new tools, which is going to be an area your average customer isn't an expert in. It is an opportunity for the TMCs to prove their worth even more so to customers. All of us recognize to do this well in the corporate space, we have to be hand-in-hand with the GDSs, the TMCs and the booking tools, so it creates an ability for all of us to really see each other as partners, and we can all join in on the journey together to make a much better experience for customers in general.
BTN: With corporations focusing more on sustainability in their travel programs, are there any potential ways for NDC to help advance that?
Geurin: There were some months here in the Covid time where we didn't have as much going on as we'd like to within our NDC development team because a number of our partners had to slow down, so we chose to use that time productively and coded an NDC solution for our carbon-offset partner. That's not the end-all, be-all of sustainability, but it's a sign that we can go do things like that that will make it easier for our corporate and business customers to offset their carbon if they'd like to, and we can make that easy for them in the long run. That's something that could end up in a bundle or a la a carte in a booking tool.
Verheggen: More of our airline partners are looking at carbon offsets now as a first inroad to combine NDC and distribution with more sustainability, so that's a very good example and it's great to see the progress that American mad there. One of the main advances of NDC is that It gives so much more flexibility and dynamism to all of us. If Neil at American tomorrow comes up with a completely new product, with NDC, we can make that available on the global scale in a very short term. That is very different from the old world, where that type of innovation was a much more lengthy or cumbersome process. The fact that there now is technology that allows information to be interchanged with pictures and other types of graphic information, it opens up all those possibilities.
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