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Carrier vs coalition

IATA’s New Distribution Capability has triggered a heated debate in the industry. While airlines are keen to embrace new technology to support their own ticket sales and ancillary offerings, there is loud opposition from industries such as travel management companies and global distribution systems. Here, IATA’s director of passengers, Eric Leopold, fights it out with Kevin Mitchell of the Business Travel Coalition, which represents the interests of the managed travel community

Eric Leopold, director of passengers, IATA

Consumers love shopping on the web because it lets them compare large amounts of product and pricing information on a single page and choose the merchant that offers the best overall value. But shoppers also prize personal interactions and the ability to visit brick and mortar retail locations. Successful businesses are able to offer both experiences: the incredible variety and comparison shopping enabled by the internet, and a personal high-touch experience for those who desire it.


Yet when it comes to shopping for air travel, consumers may feel short-changed. They have access to all of an airline’s products and services if they go directly to its website, but they often have trouble finding the same products when they use an online travel site or visit a high street travel agent. And if they want to compare prices while shopping, it usually involves a tedious back and forth among different airline websites. How ironic that – at a time when competition among airlines is driving huge service innovations – consumers are finding it more difficult to make informed decisions about what products are of value to them.


The reason is that most of the distribution technology used to bring airline content to travel agents was developed before the internet existed, and it lacks the flexibility of XML, a programming language designed to transport and store data. The solution is the New Distribution Capability (NDC) – an initiative from IATA to develop an open XML-based standard for communications between airlines and travel agents.


NDC will facilitate the modernisation of air travel distribution to become a customer-centric retail experience. XML is indisputably a superior means for transmitting more robust choices and options because it’s more flexible, more easily understood by programmers and enables transmission of non-text data such as graphic illustrations of an airline’s products.


Establishing an open, accessible and well-understood XML standard will pave the way for new solutions and innovation on a broad scale in the travel agency channel, rather than the painstakingly slow ‘one-offs’ that have occurred to date. Standardisation provides an inherently more efficient method and platform to encourage modernisation.


NDC will help carriers offer more ancillary services in the travel agent channel. Statistics show that in situations where air travellers have a choice, the majority of them don’t book the lowest fare but go for the best value. They are willing to spend a bit more if, in doing so, they can receive greater flexibility or desired services. And the level of service and amenities they desire varies from traveller to traveller and from trip to trip. 


NDC is a broad industry initiative with input from all participants in the travel value chain. Like any major change programme, it has also attracted strong opposition from certain vested interests. They’re either opposed to an industry standard, or opposed to bringing more choice and value to the travel experience – if more choice also means more competition in the distribution business. And unfortunately some of those opponents are not telling the truth about NDC.


So here are some facts about NDC:


  • NDC will not contravene privacy laws and regulations. Nothing in the NDC standard requires passengers to supply personal information to receive an offer. But it does provide the opportunity for customers to identify themselves – if they so choose – in order to have their loyalty recognised by the airline.
  • NDC will not bypass travel agents. It will enable them to sell all products that airlines have on offer.
  • Lastly, NDC will not eliminate comparison shopping. It will give customers better information on which to make decisions. NDC will support photographic product descriptions so that people can see what they are buying. And it will enable passengers to compare the base fare as well as the cost of all the options that are available.


IATA is moving forward on NDC. The foundation standard was agreed at the Passenger Services Conference in October 2012. It’s been submitted to the US Department of Transportation for approval (as is required of such resolutions coming out of IATA conferences). IATA XML schemas to support NDC pilots are now available for download at and live pilots will be underway by the end of the year.


Travellers deserve a better shopping experience than they have today. An XML standard will facilitate the comparison and sorting of base fares plus add-ons for other services and products. The new standard will increase transparency in the shopping experience, which is good for travellers, agents and airlines. >>

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