As the industry moves ahead with implementation of IATA’s New
Distribution Capability (NDC), Travelport’s global head of product and marketing
for air commerce is optimistic the new data transmission standard will improve
outcomes for airlines, intermediaries and consumers.
But Ian Heywood says there is still much work to be done to
ensure airline systems are capable of handling the requests - that “the
plumbing is in place” - and that the content is differentiated to maximize
Speaking at Travelport Live in Las Vegas last week, Heywood outlined
several benefits of this new API-based system for connectivity between airlines
and travel agents.
Since API bookings are done directly in the airlines’ systems, the carriers know who is making the request and can create differentiated
offers - combinations of fares and ancillaries - depending on that booking
agent’s needs and the history of their relationship.
Heywood says he believes this enhancement to sales capabilities
is one of the primary reasons the airlines are pursuing API distribution.
Subscribe to our newsletter below
“For public fares, now all agents are treated exactly the
same. Going forward via APIs, that is unlikely to continue. The airlines will control
the offer and they can differentiate between agents,” he says.
“The airlines will have to follow certain rules and not just
discriminate against a certain agent or a certain booking that’s coming through,
but they will be able to differentiate.”
NDC will also facilitate greater personalization of offers
designed around traveler personas.
“If it's cruise traffic, you can work with the cruise agents
and say, 'I’ll give you an extra bag for free because we know your customers tend
to take a lot of luggage.' Or the golf set – you can work with the golf agents
and say, 'To be competitive, we can give you a free golf bag.' Things like that are
difficult to do today,” Heywood says.
While it will take time for the airlines to figure out how
to effectively craft offers to encourage bookings via the API and how to maximize
revenue, Heywood believes over time it will spur substantial innovation.
The API system also reduces reliance on traditionally “big, ugly and clunky” passenger service systems.
“There is a new layer being built that’s
a merchandising engine that sits on top of the PSS system, and it will enable
the airlines to be a lot more agile," he says.
He predicts the merchandising engine that will be developed
over the next several years will create efficiencies to manage multiple carriers
within a group, potentially sparking acquisitions.
“Now if you are a group of airlines … you manage them as
individual airlines,” Heywood says.
“This merchandising engine enables you to feed in your three
different PSSs to one merchandising engine. That will bring some real differentiation
into the marketplace. It may encourage more airlines to purchase other airlines
because they can start to bring in some benefits that will be possible going
forward that are not possible today."
This summer, Travelport is preparing to release it’s Smartpoint app, which will enable agents to access unsurcharged content. Heywood says
this is a temporary solution, and Travelport hopes to offer a more permanent solution
Currently, Travelport has 19 low-cost carriers connected via an
Meanwhile Heywood says the company is talking to more than two dozen carriers including most of the 20 on IATA’s NDC Leaderboard, which are those that aim to have at least 20% of their indirect sales powered by NDC API by 2020.
“They’ll have to learn how to revenue manage with 676 fare
classes, they’ll have to learn how to make the most of offer and not fares, they
will have to merchandise,” Heywood says.
“These are all new skills sets. And the traditional airlines are built in silos, and that isn’t the way you need to operate when you are into this new world. So
you’’ll be looking at new airlines structures moving forward. And they’ve got to become very effective
“We’ve got to work together. No one knows all the solutions,
no one knows all the answers, and no one is saying it’s not going to be a bumpy
* This reporter's attendance at the event was supported by Travelport.