If New Distribution Capability will transform how airlines offer their services to corporate travelers, One Order will transform how airlines and others manage and fulfill those offers. As NDC inches closer to real-life practice, we look at the other cross-industry technological communication standard the International Air Transport Association has been working on.
Order Management
What It Looks Like Now
Passenger services systems, the majority of which are provided by IT providers like Amadeus and Sabre, are the engines for airline transactions. They host inventory, meaning an airline's flights and available seats; departure control system, or DCS, meaning check-in; reservations, via the passenger name record, or PNR, which contains passenger name and flight information; and ticketing, both the electronic ticket, which contains pricing and payment, and electronic miscellaneous documents, or EMDs, which contain pricing and payment for ancillary purchases.
Currently, airlines reconcile and synchronize each traveler's PNR, e-ticket and EMDs, and thus updating an itinerary or even changing a seat is complex. "For one simple request, the airline needs to take an action on three different records, and they need to make sure these three records are being kept in sync, " said Oana Savu, adoption manager for IATA industry distribution programs.
What Could Be
Under One Order, a single record would replace the PNR, EMD and e-ticket. "All the passenger information, the flight, the payment and service information will be stored in one single repository, and they can retrieve [that information] using the order ID reference," said Savu.
Airline Accounting
What It Looks Like Now
Airlines don't recognize the revenue from a purchase until the customer consumes the service. "At some point after the flight has departed, [airlines] will receive the information from the DCS [which processes check-ins], and they will be able to recognize the revenue," said Savu. "But until the moment, when you are not using the flight, the airline—even if they took the money form you—cannot recognize the revenue."
What Could Be
Under One Order, revenue would be recognized in real time by airline accounting systems. This is a huge value-add for airline operations, she said.
Service Delivery
What It Looks Like Now
Ancillaries and itinerary changes similarly are hard for airlines to follow in real time. "From a buyer point of view, this is really a frustration today because they don't have the visibility of their customers in terms of who changes flights, what they consume or may not consume or use the lounge access or the fast track, " said IATA director of industry distribution programs Yanik Hoyles.
What Could Be
Putting One Order into Practice
One Order is one or two years behind New Distribution Capability, but the two will start to converge around 2021, as more airlines become One Order certified, said Yanik Hoyles, International Air Transport Association director of industry distribution programs. "Airlines will be, at that time, in the position to benefit from the full suite of opportunities that retailing will bring to the industry."
In the past two years, seven One Order pilots between IT providers and carriers have been publicly reported. Among those that get IATA's OK, airlines are considered One Order certified, while delivery providers, accounting systems and order management systems are considered One Order capable.
In January, became SAP the first IT solutions provider to become One Order capable for order management for its SAP Commerce Cloud solution. Starting the previous September, SAP and International Airlines Group had conducted eight test cases, covering such variables as booking and accounting flows, both flight and ancillary purchases, card purchases and purchases by a combination of card and frequent-flier miles.
In late February, Sabre was certified as a One Order capable order management system and delivery provider for flight transactions, excluding ancillaries, which will come next, said Celis. And in April, travel content aggregator TPConnects became certified as a One Order Capable order management system.
One Order, though, employs XML messages to enable airlines, delivery providers like check-in agents and ground handlers, the airline's accounting systems and other airlines that are partners to communicate—not just after service but before and during. "The airline will intelligently inform the delivery provider about the passenger, about the flight and about the services that need to be provided to the passenger, and it will be provided in real time," said Savu. And the airline also will be informed when the traveler has consumed such services. Additionally, One Order is agnostic about delivery providers, and thus the players that can join that XML conversation also can include taxis, the airport and lounge operators.
Interlining between low-cost carriers, which don't use e-tickets and EMDs, and full-service carriers would be simpler, as well, as One Order would ease interactions and the combination of offerings, such as short-haul service from a low-cost carrier with long-haul service from a full-service carrier.
Transparency
Travelers, too, will be able track whatever they've purchased from the airline in one place. "The whole value chain, even the passenger, can know in real time what's happening with the different services that have been purchased, " said Savu.
Travel management companies and travel managers also would have an easier time seeing what services a traveler has purchased. "One Order would also be to simplify a lot of [TMC] back-office accounting systems, and [they'll] have one view of the experience that was purchased by the business traveler," said Sabre SVP of product management commercial solutions Rodrigo Celis. As a travel buyer, Hoyles said, "you'll have much more reliable information of the usage your travelers make of the different options of ancillaries."
Who's Invited to the Party?
Hoyles expects change in the aviation industry to accelerate as airlines shift from their decades-old, cumbersome processes to an e-commerce environment. "One Order puts the airlines and the other players that are engaged with it in an environment where they are much more agile and will be able to adapt and react faster," he said. Opportunities will open up for solution and service providers that don't rely on PNRs, e-tickets and other airline specialized records and systems. "People can come and play and build solutions, and [we'll] see new stuff, more competition, more innovation."