Two weeks ago in
Bangkok, IATA’s 2019 Airline Industry Retailing Symposium conference was packed
with incredible speakers and breakthrough presentations coming from 12
airlines, 12 suppliers/aggregators and a whole cohort of experts and
Too often in the industry, travel retailing is narrowly associated
with digital and leisure.
Thankfully, IATA’s retailing conference took a much broader
view of retailing, encompassing an
omni-channel distribution approach, covering
both leisure and corporate travel and involving all distribution and IT
conference included a number of surprising reveals and tangible demos. For
those who missed it, I’ve compiled my list of the three biggest insights
of the event.
volume is on track
The 21 IATA
NDC leaderboard airlines have committed to processing 20% of their indirect sales
through an NDC-powered API by 2020, aka the 202020 objective. This ambitious
and lofty goal is no small feat, but it looks like all are well on track to
At the conference, the Lufthansa Group stated that “NDC volumes for
Swiss [Air Lines] are today over 20%,” while IATA revealed that the interim target of 8%
was not only reached, but exceeded. In September 2019, 9% of all indirect consolidated
leaderboard bookings were NDC-powered.
the key hurdles to this adoption are consistently being lifted. So far, there were
three major barriers to NDC adoption: servicing, interlining and the ability to
scale. As of September, 60 travel companies (airlines, IT providers and
aggregators) are now “Level 4” certified (read: addressing full servicing).
Moreover, strong progress is being made on interlining, as showcased by an
end-to-end proof of concept featuring Swiss and Edelweiss Air using
settlement with Orders. Finally, six airlines have been certified on the
demanding NDC@Scale requirements.
NDC, One Order is also getting good traction.
United Airlines highlighted that
simplification with One Order (de-specializing IT, currently weighed down with legacy
tickets, PNRs, EMDs, coupons, SSRs and more) is not only intended to improve
travelers’ experience but also to help current and future employees manage
Lufthansa added that, based on their proof of concept completed in April
with 200 passengers, customer-focus and revenue potential could potentially
become the most important business drivers.
Airlines and Transportation at The Phocuswright Conference 2019
Hear from Lufthansa
Group, Sabre, TravelFusion, CWT and Amex GBT. Network with many others
including United, Skyscanner, Virgin Galactic and All Nippon Airways.
is the name of the game
featured a number of innovative startups, who marked a stark contrast from
traditional global distribution systems through one key metric: delivery time
The former used days, while at least one player in the latter group tended
to use years. This small difference acted as a larger metaphor: New entrants
were omni-present and main drivers in disrupting the industry and accelerating
change. In the same vein, this year’s aggregator panel included both GDSs and another
corporate travel side, an airline also noticed this market stimulation with an
increasing number of potential providers: the traditional players (GDS/travel management companies/online booking tools), the new
entrants (NDC-enabled TMCs such as TripActions or AmTrav) or consumer brands
(e.g., Google, Booking.com).
The capital available for these players and their
interest in entering this market may make the difference in the long run.
interesting is the impact that platforms can have. Speakers such as Facebook,
Trip.com Group (Ctrip) and Hopper were quick to point out that retailers need
to be where customers are, when they need it.
Natively user-centric and mobile-driven
(or mobile-only), they highlighted the importance of a conversational commerce
approach on the entire journey and especially the day of travel.
airline speakers featured the offer and order creation at shopping time, these
native players focused on the end-to-end experience. For example, with 20
billion messages a month, Facebook messaging systems could represent not only
as a service channel but also as a companion sales channel.
“platform” could co-create more value for airlines – albeit with less control –
an area to keep watching.
actively contributed to this acceleration with its “Accelerate@IATA.” IATA has
already ran over 14 hackathons and delivered 25 minimum viable products as
well as five artificial intelligence proofs of concept.
Now, in collaboration with Plug
and Play it has launched an accelerator with three batches per year. Without a doubt, IATA remains
one of the main drivers pushing this transformation forward.
but lacking simple business cases
the fact that over two-thirds of leaderboard airlines
are either in line or exceeding their ROI target with NDC, the concrete business side of
NDC and One Order remained a bit blurry during the event.
Most speakers had strong
expectations on increasing revenues through a combination of dynamic and
continuous pricing and cost/complexity reduction.
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However, one thing remained lacking:
tangible business cases, which could be copied by other players without
disclosing sensitive information. This retailing show focused a bit too much on
capabilities and not enough on accountability.
That doesn’t mean, however, that the potential is not there. IATA
introduced a report from McKinsey (“Where is the Value in Airline Retailing”)
which defined retailing as a combination of NDC, One Order and Dynamic Offers.
Based on the assumption that large airlines need make a one-off investment of up
to $15 billion and could emerge into travel platforms, the value created could
amount to a gigantic upside of $40 billion annually.
should be slightly tempered by the fact that some of the “value capture
actions” seemed to overlap with ongoing retailing and ancillary-related
strategies already planned by airlines, it is nevertheless an excellent start
to assess the true value of NDC and complementary capabilities for the overall
All in all,
the conference was very educational, insightful and uplifting as to the future
of NDC and its complementary domains (e.g., One Order and payment).
While it may
not have prioritized some interesting dimensions such as conversational
commerce, tighter collaboration among all corporate travel players, tangible
multi-channel business cases and the impact of data and its derived
business models, it was a huge step forward compared to last year.
definitely be at the IATA Retailing event in Vancouver October 27 to 29, 2020, to see how my above wish list gets
covered – but most importantly, I hope to be there to celebrate the achievement
of the 202020 objective!