Travelport touts opportunities, challenges of NDC

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 value.

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. 

“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.”

Personalization

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.

Agility

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."

Looking ahead

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 in 2019.

Currently, Travelport has 19 low-cost carriers connected via an API.

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 merchandisers.”

“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 road.”

* This reporter's attendance at the event was supported by Travelport.