New Distribution Capability is defined on the International Air Transport
Association’s website as “a travel
industry-supported program launched by IATA for the development and market
adoption of a new, XML-based data transmission standard. The NDC Standard
enhances the capability of communications between airlines and travel agents
and is open to any third party, intermediary, IT provider or non-IATA member,
to implement and use.”
The use of such terms as “travel industry supported” and “standard”
are absurd descriptives of a decade-long initiative still longing for not only
a final solution, but a baseline understanding of the value proposition. IATA
goes on to say that the three values for NDC are:
- For full-service and
low-cost airlines, to “differentiate their products and services” - For travel sellers, to “access full and rich air content of the airlines,”
and - For customers, to “benefit from a transparent shopping experience.”
None of the constituents on this list are currently realizing a fraction
of these benefits, sans a few airlines who may claim differently. Here is my
view on counting down the top four reasons that the NDC initiative in travel
can be compared to the famous Rubik’s Cube.
4. Longevity and resurgence. While it was
invented in 1974, the Rubik’s Cube was not inducted into the National Toy Hall
of Fame until 2014. Hundreds of millions of these toys were sold over these 40
years, but it did not finally reach the notoriety it deserved for decades. In
fact, after the initial launch and two years of phenomenal sales in the 1980s,
the cube took a back seat to electronic games until a strong resurgence in the
early 2000s.
IATA introduced NDC in 2012 with the intention of it being a reasonably
quick and easy solution for commercial modeling for airlines. We are over a
decade into the conversation, and it appears that the development, although
sped up after Covid-19 by the chess moves of American Airlines and others, will
remain a part of our vocabulary and industry for decades to come.
3. It’s all in
(understanding) the name. Erno Rubik, a Hungarian design teacher, invented this wildly successful
toy and originally named it “The Magic Cube.” It was not until its
global launch in 1980 did it become “Rubik’s Cube.” Arguably the name
Rubik’s Cube offers no more accurate of a description to the end user than its
original name. However, only after its successful launch by Ideal Toys in 1980,
who understood the correct way to market it, did the name recognition take off.
At a recent industry conference, I did an informal poll and asked over 100
travel buyers and suppliers to tell me what the acronym “NDC” stood
for. Only two in 10 professionals were able to get it exactly correct—20
percent! When I pursued further and asked them to explain NDC, there were a
myriad of answers, all hovering around the truth, but none understanding it
completely. Can we, as an industry, do a better job of educating all
constituents, before the train continues to speed down the tracks?
2. Consider all sides. Studies have shown
that less than 5 percent of the population can solve the Rubik’s Cube.
Millions, maybe even billions, have tried. And (as I’m throwing out the “illions”)
there are more than 43 quintillion possible combinations for the cube. The
complexity can in fact create a variety of the six different colors represented
amongst the nine squares on just one side. Over 95 percent of the population
can solve for just one color, or one side. But the game gets increasingly more
difficult when you attempt to solve for multiple sides, let alone the entire
cube.
Similarly, there are many, many sides to NDC: airlines, global
distribution systems, travel management companies, online booking tools,
corporate travel, leisure travel. These many different facets (colors) are
operationally and fundamentally intertwined in the industry. It is perhaps easy
to solve NDC for one side of the industry (cube) like leisure travel, however, what
does that do to the other sides? It does not automatically bring them into
alignment, as some will state. In fact, it absolutely creates greater
complexity when a supplier makes their move and looks at the solution as “one-sided,”
instead of considering everyone involved.
1. Which came first? So, as it happened,
our friend Erno created the cube without having a solution for it. He actually
designed and built a complicated toy (concept), with over 43 quintillion
possible solutions—yet he did not know how to get the cube to its desired end
state. It took the creator months to finally figure it out, and admittedly he
couldn’t recount the steps he had taken to get there. Fast forward, many
individuals have mastered the solution in amazing speed, and the record time
for solving the cube is now 3.13 seconds. The record-holder is Max Park from
California.
Does this sound familiar? The New Distribution Capability initiative,
launched by IATA in 2012, entered the industry with no solution in place. We
sit here today, over a decade later with a lot of attention and noise around
solving for NDC, and not one completed cube. There are several proud
participants who pound their chest in a boastful roar when they solve for one
side (their side), but perhaps, like the cube, less than 5 percent of our
industry will be able to solve for it. Who would you put your money on? I’m
thinking that the GDSs and their technology partners are the odds-on favorites!
I agree with Zane Kerby, president and CEO of the American Society of
Travel Advisors, who stated in response to American Airlines’ decision to pull
content out of the global distribution systems: It “will have a serious
negative impact on the traveling public.” Despite technology partners,
online booking providers and travel agency partners all making it clear that
their systems, and the industry, are not ready for the segregation of content,
airlines are still pushing forward and flexing their NDC muscles.
Finally, as chair of our Corporate Advisory Board at World Travel, Inc., I
was able to recently witness firsthand a room full of influential travel buyers
all shake their heads in disgust with the current climate of NDC, most electing
to not participate in any display of NDC content to their travelers. Why?
Because it completely breaks a systemic process that works well for them.
For
these reasons, I not only find it important, but borderline imperative, for the
GDS technology gurus and their partners to become the Max Park of NDC.
Michael Farrell
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