It's been said that nuclear fusion will be a revolutionary
technology, but the revolution is at least 20 years away. The problem with the
statement is that it's been "20 years away" for the last 50 years - or
more.
New Distribution Capability (NDC) arguably suffers
from the same affliction. It has the potential to disrupt, if not revolutionize,
current distribution practices and improve airlines revenue generation
capabilities.
Yet, it's been painfully slow to take off, even before the global
pandemic turned the airline industry into a survival exercise. A while ago, I
asked an airline CEO, "Are you keeping your head above water?" His
one-word reply: "Nostrils."
Where month-to-month or even week-to week-survival is
the name of the game, airlines have neither the bandwidth nor the inclination
to consider "jam-tomorrow" IT projects, especially projects requiring
considerable IT resources when those IT resources are likely to already be
furloughed or recently unemployed.
So what's changed? We are starting to see faint signs
of light at the end of the pandemic tunnel. Yes, the virus is still wreaking
havoc across much of the world and will likely do so for months or, in some
cases, years to come.
Vaccination rollout is progressing unevenly but with
increasing speed across most developed countries, though how long it will take to
provide equivalent protection in the developing world remains unclear.
Airlines
are beginning to think about what comes next. Domestic traffic in many
countries is recovering well, and intra-regional flying is starting to pick up.
Even if a broad long-haul recovery is still some time away, airline commercial
management is daring to think past tomorrow.
Fewer routes but more partnership opportunities
The day after tomorrow is likely to look quite
different to yesterday. There have been airline failures, and there will be
more. Many network carriers have scaled back their operations; for some, that
has meant cutting thinner long-haul routes, and for others, reducing their hub
feed.
Meanwhile, the more robust low-cost carriers (LCCs) stand to gain more
market share as their predominantly short-haul networks will be among the first
to benefit from any recovery. The network carriers witnessing their partnership
and interline opportunities narrow are thinking hard about generating more feed
traffic and maximizing revenues once they return to the skies. What potential
partners might there be?
Well, there are certainly LCCs, but how can LCCs and
network carriers work together?
As millions of passengers have already discovered over
the last few years, it's possible to save money or find a better flight
selection by self-connecting. Self-connection is the booking of two or more
separate tickets, often where at least one is on an LCC.
Some online travel
agencies (OTAs) have become "specialists" in the self-connecting
market, but if prices are lower, the passenger often gets what they pay for.
The connections aren't guaranteed, ancillaries like baggage allowances aren't
aligned between carriers, and that baggage must be collected and rechecked at
the transfer airport. From the network carrier's perspective, the passenger
experience is poor.
Sunsetting legacy processes
That's where "third-generation interlining"
comes into its own. The term refers to a more integrated solution enabling all
carrier types – full-service carriers, LCCs, and surface transport providers –
to interline together, without the need for acronym-heavy and LCC-unfriendly
legacy processes like MITA or IATCI.
At the same time it, affords the passenger
a seamless journey, including through-checked baggage, disrupted-connection
protection, and harmonized ancillaries. Crucially, third-generation interlining
is compatible with both network-carrier and LCC processes. Now that's a party
everyone can come to!
For the first time, these virtual interlining
itineraries are available via NDC. NDC-native solutions like Air Black Box's Air
Connection Engine (ACE) not only source content directly from airline PSSs and
NDC interfaces but also make the resultant interline itineraries available to
airline booking engines and through NDC to multiple distribution channels.
The beauty of NDC within an interline environment
Let's imagine a large network carrier wants to sell
connecting itineraries with a ticketless LCC. The network carrier provides its
inventory to ACE using NDC, ACE combines it with the LCC's inventory, and in
turn uses NDC to respond to search requests from the booking engine, from OTAs,
or from metasearch, to deliver a combined interline itinerary with full
NDC-enabled rich content.
The network carrier gets its connecting feed without changing
its processes, and the LCC doesn't have to worry about rude words like prorate
or settlement.
The passenger gets a wider choice of good value itineraries, and
as they would expect on a network carrier, they're able to check their bag all
the way through to the destination. That is NDC being used to deliver virtual
interline.
To judge from the level of airline interest, it's an
idea whose time has come. And unlike nuclear fusion, it's already on stream
today.
About the author...
Patrick Edmond is chief commercial officer at
Air Black Box.