IATA has toned down the rhetoric around its New Distribution Capability (NDC) since the launch in 2012, but some of the messaging still rings true.
In his speech at its World Passenger Symposium in Abu Dhabi in 2012, director general Tony Tyler said:
"Through the NDC...model, we also have an enormous opportunity to grow the revenue associated with every seat purchase - and thereby grow the pie for all, new entrants and incumbents."
Airlines Technology, based in India, did not exist when NDC was introduced. Fast forward four years and the 15-month old startup now has IATA NDC Capable Level III status, one of 23 tech providers which had this official seal of approval as of this August. The list does indeed, as Tyler promised, include new entrants and incumbents.
Before the Q&A with Airlines Technology, here's its "elevator pitch" video:
What problem does your business solve?
Today, between 70%-75% of airlines reservations are managed through travel agents. Airlines are paying fees for these reservations, even though the agents cannot sell ancillary services such as wifi, inflight food, lounge access, preferred seats, advanced boarding etc.
This results in huge revenue and opportunity loss for airlines.
Online travel agents find it difficult to handle modifications or cancellations as well. It is not feasible to do an individual contract with each and every airline for the access to this functions.
Consumers only see the fare and the schedule on the agents' portal and have to make a choice based on that alone. They don't know that if two flights are offering the same or similar price, which one is the best value in terms of on-board or ground services are included in the ticket or available and at what cost.
Loyalty card benefits are also limited for travellers booking on an OTA.
Airlines Technology is developing NDC-based aggregator services, where we will act as the middle layer between airlines and OTAs. We will help OTAs to showcase all offers and services available on-board and at ground level.
We think our solution will help airlines in many ways:
- Higher customer retention with personalized offers
- Accelerating sale by multiple channels presence
- Dynamically showcasing the offerings on travel agent portal with rich content
- Selling on-board services
- Better control on payments management
The traveller meanwhile will have option to pre‐book all on-board services with a better understanding of the differences between price points and airlines.
Names of founders, their management roles, and number of full-time paid staff?
The three founders of the business are:
Smriti Kumar -CEO and co-founder: leads the entire product development;
Paras Kumar - CTO and co-Founder: leads on process, technical and domain.
Varun Bansal - director and co-Founder: leads business development, financial controls and business operations.
Number of full-time paid staff - 10
Funding arrangements?
We invested initial $125,000 as seed money on our own. We have been part of Travel Startups Incubator since April 2016. It invested cash and their mentor team joined us on advisory panel.
Now we are looking for next round of funding and recently appointed investment bankers for that.
Revenue model?
Aggregation is huge. There are 400+ global airlines and in 2016 alone, 3.8 billion passengers will fly between different routes. As per IATA, these figures will go above 7.2 billion passengers by 2035.
We will charge fees on per transaction (booking) basis. If airlines and OTAs are willing to commit for longer durations we will offer them periodical subscription.
Apart from that, there will be great demand for IT services and data analytics and we think we can cross-sell these to our airline and OTA aggregation partners.
Why do you think the pain point you’re solving is painful enough that customers are willing to pay for your solution?
Travellers will demand better product offerings and want to see exactly what is on offer at what price. New technology such as NDC will help airlines sell more.
External validation?
Through our involvement in Travel Startup Incubator we have Matt Zito and Mike Coletta as mentors.
In addition we have as mentors:
Daniel Friedli - managing director of consultancy Travel in Motion.
Gary Doernhoefer - an airline industry attorney and consultant.
Tnooz view:
Airlines Technology is at the top table of travel tech, if being named as one of IATA's 23 certified providers is a prerequisite to attend.
It might want to sit next to the familiar faces such as the GDSs, or hang with the lesser known participants such as Red Apple Networks, Muareva or Indra.
The variety of businesses looking at NDC reflects the fact that, to paraphrase Tyler, the pie is big enough for lots of businesses to exist within the new distribution world order.
In theory it works, but to what extent can the less well known outfits - such as Airlines Technology - get in front of the airlines or OTAs to sell their wares? The bigger, established firms have relationships in place and have access to the decision makers.
Having said that, Airlines Technology is working with British Airways, which shows a willingness on the part of at least one major carrier to consider options other than the usual suspects. And that is a positive sign for Airlines Technology.