On the 24th of February 2015, an interactive webinar took place to provide the latest update on NDC. During the webinar, IATA presented the latest developments in the NDC program as it moves into its deployment phase. Furthermore, SWISS Airlines and their technology partner Datalex shared their findings from their NDC pilot project. More than 650 participants attended this webinar online.
The webinar was divided in 4 parts presented by the following speakers:
– Yanik Hoyles, Director, New Distribution Capability Program, IATA
– Emmanuel Carrier, Ph.D Data Science Consultant, Operations Research, Delta Airlines
– Alan Dunne, Chief Innovation Officer, Datalex
– Dr. Karl Isler, Senior Director, Head of Revenue Management Strategy and Operations Research, Swiss International Airlines
1. Update on NDC by Yanik Hoyles, IATA
Yanik Hoyles provided an update on NDC and the agenda for the rest of 2015 and 2016. He started his presentation with a brief timeline overview of NDC progress. The 1st scheme NDC 0.0 (Baseline) was created in April 2013. In November 2013, the scheme NDC 1.0 was developed to include shopping in the standard. In November 2014, the standard NDC 1.1 covered ticketing, booking, payment and servicing. For 2015, NDC 1.2 is scheduled and is intended to cover interline and airline profile. IATA expects to present NDC 1.2 during the IATA World Passenger Symposium on 19-21 October 2015 in Hamburg.
He further highlighted the preparation of the study together with the ‘Coalition of National Travel Agents Associations’ to demonstrate the involvement of the travel agents’ community in the NDC
development process. The pilots started in 2013 with American Airlines and Hainan Airlines. In 2014, Air Canada, Quatar Airways joined the pilots tests. In 2015 Aer Lingus, British Airways, China Southern or Heli Air Monaco are expected to join the pilots tests. For 2015, 4 key measures are scheduled to be adopted:
– New enhanced version is scheduled for September 2015.
– Certification Process: IATA is willing to implement a special certification process in order to make sure which companies are able to receive and process data obtainedvia NDC.
– Support for adoption: IATA is going to continue seeking more support from the travel agents’ and GDS’s community.
– Full adoption is scheduled for 2017.
2. ‘Future Retail Products’ – Emmanuel Carrier, Delta Airlines
The speaker pointed that the views expressed in his presentation are his personal views and do not reflect Delta Airlines marketing strategy. He explained that currently the major part of airlines’
revenues comes from ticket sales. For the moment, the ancillary services are the marginal part of global incomes and the airlines wish to focus on this part and increase their proportion.
Currently, the marketing strategy for ancillary services of the airlines is based on 3 major points:
a) Priority – skip the line
b) Flexibility
c) Comfort
Airlines collect data related to the ancillary services and tend to create the best possible offer. NDC’s intervention will affect the distribution. Zones of focus for airlines should be the mobile sector, as it will be the major component of the marketing strategy for ancillary selling. Airlines should focus in particular on the mobile sector, as it will allow reaching the vast range of customers.
3. ‘IATA NDC – as an enabler for Travel Retail Innovation’ – Alan Dunne, Chief Innovation Officer, Datalex
The speaker based his presentation on 3 major points:
a) NDC from consumers’ perspective: The omni-channel shopping experience is often mistaken with the multi-channel distribution. The omni-channel distribution requires the airline to put itself in customers’ shoes to find a tailor-made offer for the customer. He explained that the customer’s experience should be seamless as the customer progress in the purchase process through direct and indirect sales channels. According to him, product and offer should be the same from one channel to another.
b) NDC from marketer’s perspective: In this section, the speaker focused on what is called ‘Customer Segmentation’. Airlines were pioneers in pricing strategies segmentation at the macro level (Broad categories Business/ Leisure). Leading retailer now employ real-time segmentation at micro-segmentation level in order to properly evaluate customers’ value and develop a relevant marketing strategy. He further explained that the customers’ segmentation is based on:
– Customer context (Destination, Family travelling, Time of the purchase, Purchase History)
– Customer value (Frequency of the purchases etc.)
c) NDC from technologist’s perspective: Today, the airlines push the data into indirect channels, through Fares and Rules distributions. They provide the data. NDC will reverse this scheme. Airlines will receive data from the customers and will be able to directly display personalized offers in real-time.
To leverage all potential advantages of NDC, airlines will have to improve their capacity of handling such important of data (Big Data Analytics).
4. ‘How would revenue management look like if the Internet had come before the GDS?‘, Karl Isler, Head of Revenue Management Strategy and Operations Research, Swiss International Air Lines
Karl Isler focused on the advantages of NDC. The efficiency of pricing, thanks to NDC is expected to be huge and airlines are of course particularly in favor of this tool. He pointed out that the
customer will be provided with consistent pricing and simplification of travel documents.
The webinar ended with a Q&A Session: The 1st question referred to the implementation of NDC. Yanik Hoyles from IATA explained that every airlines, willing to implement NDC will be able to do it in an independent way. NDC is not mandatory so airlines are not obliged to implement NDC. Further questions referred to the data protection issues. Alan Dunne pointed out that segmentation is conducted anonymously. Karl Isler concluded that the customer will have the choice between anonymous and personalized shopping.
