In the 70s and 80s airlines were technology pioneers with their creation of Global Distribution Systems (GDS) based on EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport). But today, EDIFACT as the messaging system is constraining the airlines’ merchandising and customer personalisation ambitions to corporate customers who purchase travel using travel management companies and agencies that largely use the GDS. These are precisely the customers most responsive to ancillary upsells or loyalty offers such as the extra legroom, seat choice, on-board Wi-Fi, food and entertainment options, etc. It’s not just about charging passengers for checked bags and other services that used to be included in the fare. It’s also about creating new products and services that passengers will want to purchase and merchandising them effectively.
To be fair, the GDSs have been adopting some XML to try satisfy airline demands and there are some examples of good airline / GDS projects using XML, but the pace of change in creating fare structures and ancillary innovation is so great that IATAs NDC initiative is designed to be the industry catalyst for that radical and badly needed overhaul of airline retailing.
Traditionally EDIFACT delivers information in the form of a static display, showing prices and flight times with limited product information for comparison. Today, airlines are keen to adopt modern e-tailing practices in what invariably has come to be known as merchandising, retailing, unbundling, a la carte pricing or simply charging for things that used to be part of the fare. XML which airlines already use for selling fares and ancillaries through their own websites is the enabling technology that will bridge this gap.
XML is very flexible and powerful allowing airlines to display content rich details about their services. NDC is really about extending this flexibility across the airline distribution value chain. NDC is based on the Open AXIS XML (Extensible Mark-up Language) schema which is an open data standard and available for use by the entire industry to set the parameters for transmitting data between partners. Open AXIS XML ensures that NDC is an open, robust and transparent internet-based data exchange standard – just what the airline industry needs in its quest to embrace e-retailing.
The essential difference between the two can be summed up by imagining a small window next to a larger door. Smaller chunks of uncomplicated bits of data go back and forth from requester to supplier through the window. That’s EDIFACT. The door, on the other hand, represents a bigger opening that allows more complex content to flow back and forth, which is XML. We’ll touch more on the differences between EDIFACT and XML messaging in another article.
Travel industry adoption
Online travel companies, especially the intermediaries connecting with multiple suppliers, have been heavily using XML APIs for sharing data among various system. Search requests get wrapped up in XML documents –and responded to similarly with content rich offers, confirmations and bookings across the supply chain.
XML technology is the facilitator for seamless connectivity and syncing between different systems in real-time. As the ‘information exchange standard’ between disparate channels, it plays a critical role in strengthening the systems of travel suppliers and connect data held in different silos.
For hotels, XML technology has played a crucial back-end role to facilitate the move to a new-generation approach to revenue management and real time updates across all channels and platforms. For other suppliers, like car rental companies, XML is playing its part improving reservations and rentals for customers. Mass adoption of XML among airlines promises similar efficiencies.
Travel companies have embraced XML standards because of some of its very practical attributes:
Simplicity – XML is easy to understand, doesn’t require great programming knowledge. You create the Tags and overall structure of documents is controlled by the user reflecting the organisation’s needs.
Organisation – XML makes sure data stays well organised and is segmented from the formatting rules.
Accessibility – XML helps compartmentalise data which makes it easily accessible coding when changes or updates are needed which helps save time (and probably money).
Standardisation – XML is an international standard – hardware and software agnostic, meaning anyone from Amsterdam to Zurich and all places in between can decipher the message and understand its contents.
Ultimately, XML is a language designed to keep documents organised and easily communicated. It doesn’t require masses of technical knowledge and can save time (and probably by definition money!). When you think about it, why wouldn’t a travel company wish to use XML?
Why does IATA want to create an XML standard?
Essentially for all those reasons listed above. IATA recognises that B2B communication across the online travel supply chain has been transformed by leveraging XML open standards as a web services communication framework enabling the sharing of more complex messages including pictures and videos. So IATA wants to collaborate with the industry to develop a set of open XML standards that will enable airlines to take control over the distribution, pricing and merchandising of their product and services. It sees the need for airlines to embrace this technology, take the bull by the horn, and benefit from it too.
XML can prove to be as transformative for the airline industry as it has proved to be for online travel agencies and their suppliers. Adopting NDC based on XML means airlines could become less reliant on the global distribution systems, because in future they would bring together the fare, schedule and availability within their own systems to create an offer instead of the GDS performing this task. The GDS stranglehold on the airline corporate sales channel would be finally broken. The offer could still be routed through GDSs, but the door of options and opportunities would be wide open. So to sum up, IATA is putting energy and resources into promoting NDC adoption so that airlines can benefit from:
Common standards shared by all to increase connectivity between partners
Re-using communication APIs across partners and reducing costs
Open, transparent way of selling products across all channels
Ability to innovate products and fares – to differentiate and be competitive
Agility to respond to market conditions with quick introduction of new services or withdrawals of poor performers
“The NDC data transmission standard will open up the airline distribution market to much needed competition and new entry, which could lead to lower distribution costs,” says IATA on its website.
NDC is the genie out of the bottle that one way or another will make this vision a reality.
(Article originally published by triometric)