NDC: 5 questions an airline should ask – 3/5
After 3 years of hard work and tough discussions, the IATA NDC (New Distribution Capability) program is now proposing actual tools for implementation. As early participant to the NDC workshops, Conztanz proposes you a serie of questions that an airline should ask (internally or to its providers) before moving forward.
It is time for an airline to consider how to take advantage of this initiative. Where to start?
CHAPTER THREE: WILL YOUR CIO FOLLOW?
At this stage, your decision is becoming mature. You have your new strategy and products in mind, the right departments are on board. They are ready to change their processes. In a few words:
- You aim to manage your airline offers yourself
- New processes will replace the current ones
- All your systems will talk a new language standardized by IATA
- You will most probably need new tools
Your next step is to go and see your CIO: will your IT department follow?
Rough question. The answer you will get depends on your CIO personality, and even on your country culture: “NO”, “YES”, “maybe”?
But without any surprise, it will end up with a “YES, but”, especially if budget constraints are not yet considered.
Let’s get into details.
Questions on your IT capability depend on your current architecture and on your IT partners‘ involvement in the program.
WHERE DO YOUR SEAT OFFER COMPONENTS STAND TODAY ?
Legacy airlines usually file basic components of the offer, such as schedule or seat fares. Those are then stored on large databases, as ATPCO or OAG.
For indirect sales, GDS connect to those databases in real-time to propose the airline’s offer to the travel agents: the airline is not involved anymore at that stage. For direct sales, in most cases, the airline reservation system (or booking tool for the web) does the same.
The airline still controls availability through its inventory or calculated on demand by the Revenue Management tool. At best, distribution systems (internal and external) access to this information in real-time.
- For pricing and schedule, choose either to keep the outside storage as it is and connect it with the airline internal offer tool, or to build your own internal databases (they might already exist for the airline website).
- For availability, keep it as it is. You may even choose to have it tailor-made depending on the request.
Starting point: set a table listing current basic components and their source depending on the channel.
ANCILLARIES: WHERE ARE YOUR SOURCES?
Two main changes affected the “all standards/all filed” model legacy that airlines were following a few years ago:
- Development of the airline website and necessity to go for simpler fare rules (see above) and
- Enlargement of the offer with ancillaries products and different types of packages using them.
Ancillaries (and branded fares) distribution is complex and not entirely covered by legacy systems. Therefore some airlines have already developed specific tools and processes.
In practice: Study your current situation and determine what you have to simplify. Most airlines implemented such workarounds on direct channels. (online only most of the time ), where they benefited from some leeway, and worked on items such as: flows of information, internal prices tables, hard coded parameters and rules. At the end, those won’t be necessary anymore for NDC channels, as new standardized messages allow easy ancillaries distribution.
Starting point: Analyze existing workarounds : today they are a first step for the airline independence, but as they might blur your current offer creation process. You need to identify them and decide : keep them or leave them.
HOW REACHABLE IS PERSONALIZATION?
Personalization in distribution means being able to send offers as adjusted to your customer needs as possible.
With NDC schemas, your customer can give you information on his identity.
That does not mean that you know his needs, nor that you can adjust your offer accordingly.
In practice: Store and update your customer information. You will need to be able to use this information when building the offer.
Starting point: Clarify current status of customer information and usage need: CRM and sources, customer value calculation and usage in PSS…
SHARE YOUR POSITION TOWARDS YOUR IT PARTNERS
[headline tag=”h4″ color=”color1″]MAKE SURE YOU UNDERSTAND THEIR NDC STRATEGY[/headline]
Like most legacy carriers, you have outsourced part of your IT tools. You now share your PSS (plus maybe your booking tool, your revenue management system) with many other airlines. You have one or many IT partners, this of course in exchange for toughly negotiated fees!
Those systems (PSS at first line) are central for offer creation. NDC schemas usage will indeed involve large changes.
Most PSS providers (and others) have participated to IATA NDC workshops, have invested in pilots, and presented plans for improvement. But keep in mind that NDC aims at “opening up” the game: new comers have appeared and propose larger or more efficient coverage : ancillaries platforms, integrated tools using NDC schemas, offer builders.
In practice: clarify your strategy with your IT partners: is change of partners an option? In any case: discuss their roadmap.
Starting point: clarify status of IT partnership and propose face-to-face meeting (s). Study the opportunity of a pilot.
RESPONSE TIME: WHAT IMPACTS ON YOUR HARDWARE?
Websites (airline’s website, but also OTAs and metasearchs) currently set the response time standard higher and higher when providing answers to shopping requests.
Even worse: the general trend of the industry is to go to shorter response time together with better accuracy.
Today, third parties distribution usually includes a GDS. Shopping requests are internally analyzed and answered : most of them don’t even reach the airline (except maybe for the availability part). With NDC, rules are changing : the airline is in charge of building the offer. Hence the airline will receive the request and provide the answer. On its NDC scope, the airline will receive ALL requests.
In practice: Get prepared to very high level of access … the airline will receive MANY REQUESTS and provide MANY answers. Even receiving requests might be tricky if not carefully looked at. Proposing offers with a good response time might involve specific tools, depending on the requester.
Starting point: Check where the “contact point” of requests will be, how the direct distribution messages flow currently work.
Three out of Five: your NDC project is taking shape!
But are you ALLOWED to carry on? Existing partnership contracts, legal constraints will be our focus in our next article.
Meanwhile, we would welcome any comment/live experience on this one. Do not hesitate to send questions (see address below).
About the Author:
At that time, she had gained 20 years’ experience in the airline business in the AFKL Group, mainly in RM, Sales and Distribution departments.
She has participated to NDC DDX, since the start in June 2012, first as AFKL’s representative and then as Conztanz’.
Please do not hesitate to contact us if any question or comment.