new distribution capability (ndc) -...
TRANSCRIPT
Simplifying the Business 1 © COPYRIGHT IATA 2012
New Distribution Capability (NDC) Andrei Grintchenko IATA
Simplifying the Business 2 © COPYRIGHT IATA 2012
Agenda Ö What NDC is about Ö What’s changing Ö What it looks like Ö The NDC value proposition Ö Who are we engaging with Ö Next steps Ö What NDC is NOT about Ö Deep dive into governance and workstreams
Simplifying the Business 3 © COPYRIGHT IATA 2012
Simplifying the Business 4 © COPYRIGHT IATA 2012
Ö NDC = New Distribution Capability = Industry standard
Ö Balanced view, win-win-win equation
Ö GDS, IT providers and agents are participating
Ö For passengers – more choice of products and services, more personalization, and more transparency
Ö Fill the gap – Direct vs. Indirect
Ö Revenue opportunity – Increased sales of ancillary products and services, product differentiation, personalized offering
What NDC is about
NDC in a nutshell
Simplifying the Business 5 © COPYRIGHT IATA 2012
What is Distribution
Ö How the airline product gets to their customer
Ö All the processes are connected
NDC will first focus on building standards that impact the shopping process
Airline Distribution Life Cycle
NDC focuses on this aspect of the process
What NDC is about
Simplifying the Business 6 © COPYRIGHT IATA 2012
Introduction to New Distribution Capability Ö What IATA member airlines are saying:
Ö Need ability to differentiate through innovation and personalization
Ö Need ability to sell what they want to whom they want through more channels
Ö What is IATA going to do about it: Ö Setting Industry Standards to support airline distribution capability:
developing a standardized method for airlines to describe their products and the options available.
Ö The new standards aim to stimulate competition, innovation and offer more choice to consumer
What NDC is about
Simplifying the Business 7 © COPYRIGHT IATA 2012
The Problem Today Ö Airline pushes the data – GDS constructs the offer
Ö The “push” has limited interactivity with the airlines Ö Constraints with ancillary trend, sophisticated dynamic pricing
revenue management and increasing data mining usage Ö New technology: More agile, faster and more cost effective
What NDC is about
Simplifying the Business 8 © COPYRIGHT IATA 2012
So… What is NDC About? Enabling the capabilities that exist on the airlines’
website through Indirect channels
Ö What NDC is about
Simplifying the Business 9 © COPYRIGHT IATA 2012
So… What is NDC About? Enabling the capabilities that exist on the airlines’
website through Indirect channels Ö There are 2 basic requirements
Ö Developing a standardized method for airlines to describe their products and the options available - A standard way of connecting - common API
Ö Product differentiation, Personalisation through Authenticated Shopping
Ö The initial scope is the shopping process Ö In tomorrow’s new distribution, airlines will have greater ability to
interact with who is requesting and provide tailor-made product offers
Ö Product innovation / Differentiation / Personalization
What NDC is about
Simplifying the Business 10 © COPYRIGHT IATA 2012
• It is critical airlines construct/own their product. Need to connect to customers through indirect channels with interactive relationship
• Should use modern messaging. XML based protocols and web services as an example
• Must not to be constrained by backward compatibility with existing legacy messages
• Standards must facilitate authentication of customer identity, enable personalized offers through the whole distribution supply chain
• The new model will be able to cope with changes and support a shopping basket approach (to add and remove product)
• The ways to display product attributes will be standardized to facilitate comparison on sites such as fare comparison sites
Key Principles New Distribution Model
What NDC is about
Simplifying the Business 11 © COPYRIGHT IATA 2012
Airline Distribution Tomorrow The Airline builds & owns offer, personalized for consumer
What NDC is about
Simplifying the Business 12 © COPYRIGHT IATA 2012
Schedule
Airline
Fare Filing
Availability
Airline Distribution Today Push content via 3rd parties to GDS
Builds content
Agent
3rd
Parties
GDS
Cus
tom
er
What’s changing
Simplifying the Business 13 © COPYRIGHT IATA 2012
Airline Distribution Tomorrow Dynamic Airline Shopping
Airline
Product
Price and Availability
Engine
Dynamic Airline
Shopping
Interface
Agent
Cus
tom
er
Aggregator
Agent
What’s changing
Simplifying the Business 14 © COPYRIGHT IATA 2012
Shopping for air travel today
Ö Search by city-pair and date
Ö Compare on price or time
Ö Limited product information
What it looks like
Simplifying the Business 15 © COPYRIGHT IATA 2012
Shopping for hotel today
Ö Search by ratings and deals
Ö Compare on value to consumer
Ö Rich product information
What it looks like
Simplifying the Business 16 © COPYRIGHT IATA 2012
Shopping for air travel tomorrow with NDC Is it possible?
Ö Yes. Airlines already offer today much richer content than what consumers can find on travel agent websites which use GDS data.
What it looks like
Simplifying the Business 17 © COPYRIGHT IATA 2012
Shopping for air travel Tomorrow with NDC (IATA mock-up)
Ö Search by affinity and value
Ö Compare on value to consumer
Ö Rich product information
Ö Transparency and choice
What it looks like
Simplifying the Business 18 © COPYRIGHT IATA 2012
NDC value proposition
Ö Consumers Transparency (all-inclusive), choice (full-service & LCC), personalization
Ö Airlines Differentiation, innovation, customization, time to market
Ö Travel agents More content, better customer information, in one place
Ö Aggregators More content, incentive to innovate
Value Proposition
Simplifying the Business 19 © COPYRIGHT IATA 2012
Value proposition for agents
Ö Broader access to airline products: one stop access to ancillaries and other airline services will enable agent innovation and potential new revenue streams
Ö Better service for clients: ability to present broader value added to clients via customized offers - if the customer chooses to be identified
Ö Increased relevance of travel agent in comparing complex product offers
Value Proposition
Simplifying the Business 20 © COPYRIGHT IATA 2012
Ö More choice Ö More complete product offers Ö More places to shop for travel Ö More ability to comparison shop on complete
offer Ö More ability to get personalized offers based on
your preferences if you choose to do so
Value proposition for customers
Value Proposition
Simplifying the Business 21 © COPYRIGHT IATA 2012
NDC STAKELHOLDERS
AIRLINES
ACADEMICS
LCC IATA
REGULATORS
EC
US DOT
GBTA
ETTSA
ASSOCIATIONS
ECTAA
ACTE
WTAAA
SBT
AIRLINE IT
FILING
3rd PARTIES
GLOBAL TRADE MEDIA EVENTS
IT PROVIDERS
KDS Concur
ATPCO OAG
Easyjet Jetstar
Air Canada Air France/KLM Delta United BA Emirates Cathay Pacific Singapore Korean Malaysia Small &Medium Carriers
Navitaire SITA Amadeus Sabre Travelport Travelsky
DISTRIBUTION CHANNELS
RETAIL TRAVEL AGENTS
GDS
TMC
MAJOR OTA
Sabre Amadeus Travelport Travelsky
Expedia Priceline Hipmunk Priceline
HRG AMEX CWT BDC Travel
META-SEARCH
Skyscanner Google Flight Kayak
Independents Small networks
Who we are engaging
Simplifying the Business 22 © COPYRIGHT IATA 2012
The NDC Roadmap
Next Steps
Simplifying the Business 23 © COPYRIGHT IATA 2012
Misperceptions about NDC Ö NDC is an airline effort to circumvent agents and go direct to the customer
Agents continue to offer significant value to customers navigating complex offers Airlines will rely on agents more in a more cost effective and agile distribution environment
Ö NDC is a GDS bypass GDSs part of NDC development team GDSs, like other IT companies, will be able to aggregate expanded airline content and offer comparison shopping
Ö NDC will mandate customers provide personal information to buy tickets Customers can provide personal information for customized offers or remain anonymous (no different to other shopping experiences)
Ö NDC is an airline driven solution to meet only airline needs NDC is an industry collaborative effort across the entire value chain that benefits the entire chain
What NDC is not about
Simplifying the Business 24 © COPYRIGHT IATA 2012
Ö Resolution Ö Governance Ö Working Groups
Deep Dive Time for a deep dive
Simplifying the Business 25 © COPYRIGHT IATA 2012
Governance and Resolution 787
Simplifying the Business 26 © COPYRIGHT IATA 2012
Ö Set up under Passenger Distribution Group Ö Chaired by Lufthansa with vice-chairs from Air
Canada and Advantage Travel Centers Ltd (UK) Ö Objectives
Ö Detail NDC business requirements and deliver first release of XML schemas to be adopted as the NDC Standard
Ö Produce and maintain NDC Implementation Guidelines
Ö Identify NDC impact across distribution value chain
DDX Working Group
Simplifying the Business 27 © COPYRIGHT IATA 2012
DDXWG Workstreams
Ö Strategic Workstream: define the business requirements and the overall architecture of the new distribution capability using the top-down approach
Ö Tactical Workstream: focus on the details of business
requirements for authenticated shopping with a view of building the first version of the reference implementation (i.e. a bottom-up approach)
Ö Impact Assessment Workstream: identify the impact of the new
distribution and provide recommendations how other impacted standards may need to be modified
Simplifying the Business 28 © COPYRIGHT IATA 2012
DDXWG 2 Highlights Ö Over 60 participants representing:
Ö 16 airlines Ö 7 travel trade organizations Ö All major GDS Ö IT Providers and other industry entities (ie ATPCO,
ARC) Ö Group exercises addressing various aspects of NDC:
Ö Formulate and reviewed expectations and guidelines for Industry Pilots to be launched this year
Ö Impact in other segments of the distribution value chain Ö Creation and review of use cases under NDC scenarios
Simplifying the Business 29 © COPYRIGHT IATA 2012