Aug 13

NDC: 5 questions an airline should ask – 5/5

After 3 years of hard work and tough discussions, the IATA NDC (New Distribution Capability) program is now proposing actual tools for implementation. As an early participant to the NDC workshops, Conztanz proposes a series 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 FIVE: PLAN YOUR NDC PROJECT

You have spent the latest weeks better understanding NDC.

You know better how it fits your airline strategy. You know better where to go and who to take on board for the journey. You have of course checked whether you can launch the project or not.

In a few words, you have a good NDC overview for your company.

Ready? Time to get basically practical, convince your sponsors and get on project mode.

DEFINE YOUR FIRST STEP SCOPE AND PARTNERS

What your airline will use in NDC is clear. But how you will get to that operational stage is still to be defined.

Several questions will help to define your scope:

how deep your first step will be: shopping only or up to ticketing?
which channels will be involved: only your favorite TA next door, with a direct, connect link, your website or all your TMC partner agencies?
are you looking for an operational process from the start -with actual sales- or can it be pilot mode?
can your first step apply to a part of your network only? To one or two ancillaries only?

In practice: you need to clearly define the scope, cost, planning of this first step to get your management agreement. Then you will able to move forward.

Starting point: check whether a pilot could be your first step: 17 airlines have already decided to go that way with IATA, a good start to learn NDC specifics and benefit from the others’ experiences.

WORK YOUR BUSINESS CASE OUT

Unless your management is already completely pro-NDC, the business case will be key to convince them.

Cost is, of course, dependent on the size of your airline, its markets, and the type of contracts with your IT providers.

Some benefits are obvious and easy to forecast: additional revenue you can expect from selling a new ancillary that you don’t offer today, services offered by a partner (car rental or hotels, parking), the revenue you might get when using a new channel.

Some are as obvious, but their measurement is much more tricky: increased revenue when attracting more customers, by showing how different you are, by offering personalized packages.

Some can count “side effects” as NDC benefits: revenue integrity checking and debit memos suppression; revenue accounting interline simplified processes.

Then cost savings can also be expected: NDC allows direct relationships with stakeholders hence less intermediary costs (GDS, banks for credit cards…)

In practice: The list as stated above will only be partly applicable for your own case but try not to limit your study to the most obvious: implementing new ancillaries cannot be the only motive, as there are other ways to do it.

Starting point: talk with your IT partners and distribution department for cost and your marketing department for revenue.

FIND YOUR TEAM
…And your sponsor!

Who will lead the way? Business or IT?

Will your NDC project be transverse or will it have a dedicated team?

There is no ideal organization of this project, it will, of course, depend on your internal processes.

Nevertheless, be sure that this project will require:

A GOOD SPONSOR: convinced, ready to defend the idea at the executive level and to take part of the cost. Even better: this sponsor would take part of high-level IATA meetings with other airlines (like PDG: Passenger Distribution Group) to express his (your airline’s) opinion at the industry level, and give good external exposure to the project.
HOURS: ensure that the persons involved are not doing it “on top of” everything else: NDC presents some very new positions, which stand out from the current distribution landscape. The learning phase is mandatory and time-consuming.
KNOWLEDGE: ensure that your team has the right basic tools from the start: business (marketing, distribution, link with TA, link with distribution stakeholders: GDS, metasearch, new players…) and IT (architecture, security, XML, API…)

In practice: since we are talking human resources here, it would be ideal to have representatives from the different departments in your project. But you will have to deal with reality: do not hesitate to get external help to train your team.

IATA offers support, videos, and their representatives can help you start.
some consulting companies have been involved in NDC from the start and are very likely to be on your side, understanding concepts and dealing with your business partners. They are few, but yes! Conztanz is one of them,
IT companies with good XML knowledge will support your IT department.

Starting point: find your sponsor! (or decide to be one…)

DEFINE YOUR PERSPECTIVES

Your first step will hopefully be a success! Even if you don’t go down to all details, you should have perspectives in mind when presenting the project, among which:

the final goal: business scope, geographical perspective, complete innovation. Think of the latest moves from IAG (offering NDC API for any new stakeholders willing to use them in their solution and propose their offer) or LH (picturing a business model where distribution costs are different from one channel to another)
the planning: when do you plan to reach this ultimate step and what are the levels you have in mind, the difficulties ahead you foresee?

In practice: perspectives will have to follow your airline ambition and situation. You will have found ideas when thinking of your product, will have found limitations or resources in your current organization, your IT, your contracts.

Starting point: decide whether you can afford to be an innovator or are satisfied with following the general move. Be practical and realistic.

This was the last article of the series! As usual, we welcome any comment/live experience on this one. Do not hesitate to ask questions in the comments below.

We hope you found those five articles useful and are already on your way with your NDC implementation!

Do not forget that Conztanz is at your disposal to be on your side in this difficult task! Contact us!

NDC Questions for Airlines – One: the Offer

NDC Questions for Airlines – Two: Impact on internal processes

NDC Questions for Airlines – Three: Will you CIO follow?

NDC Questions for Airlines – Four: be aware of your legal context

About the Author:

Hélène Millet joined Conztanz in November 2013, soon after the company was founded, as part of the initial team (so called “Pioneers”).