“Working closely with the industry, we realized that there was a fundamental technology gap due to a lack of industry common infrastructure causing challenges for airlines to present their offers consistently in all sales channels and for sellers to get airline content easier and in a way that doesn’t require la lot of development work and maintenance,” says ATPCO’s Cheikh Fall.
In October 2017, the NDC Exchange launched with the promise of creating an online marketplace where airlines, travel management companies, online travel agencies, corporate buyers, global distribution systems, and other technology platforms could conduct direct transactions for anything that fell under the heading of “airline retailing.”
In essence, the NDC Exchange enables API connectivity between airlines and sellers using the New Distribution Capability (NDC), an XML-based data transmission standard introduced in 2012 by global aviation industry trade group IATA with the goal of unifying and simplifying unwieldy, convoluted airline retailing processes.
The marketplace that the NDC Exchange represents allows for the seamless buying and selling of airline bookings, ancillaries, change bookings, change orders, cancellations, says Cheikh Fall, product owner, NDC Exchange, at ATPCO.
The NDC Exchange was founded as a way to address what was recognized as a “fundamental technology gap due to a lack of industry common infrastructure,” Fall told Kambr Media.
Because airlines and the various channels they sold their products through had different retailing systems, the process was cumbersome. Given the comparison to what Amazon was doing in e-commerce, Google was doing in online advertising, and what Uber and Lyft were doing in ride-hailing, the airline industry appeared to be standing still.
NDC Exchange represented the direct, clearly arranged pipelines that would allow airline retailing commerce to flow more freely.
The lack of a single system was “causing challenges for airlines to present their offers consistently in all sales channels, and for sellers to get airline content easier and in a way that doesn’t require la lot of development work and maintenance,” Fall said.
The other basic promise of the NDC Exchange was that airlines and channel partners would not have to invest in yet more technology; for a “nominal fee,” ATPCO would set of the technology and ensure sellers and buyers would be able to connect effortlessly.
“Airlines and their channel partners don't have to have a deep knowledge of the schema and upgrade their technology to keep up with every new NDC schema – we do that for them,” Fall said. “That way, we address any resource constraints that may exist, enabling faster time to market.”
There are 2 main parts to the exchange, Fall said:
On the seller side, if you’re a travel agency or a TMC, or an OTA, or a carrier looking sell interline partners’ products, once you connect to the Exchange, you now have access to every single carrier that is already connected to the Exchange without the need of doing any technical work, Fall added.
“All you need to do as a seller is establish your commercial agreement with the preferred airlines, but the technical aspect is already in place,” he said. :On the carrier content side, of course, the marketplace extends the carriers’ NDC connection; but it can also enrich the carriers messages with rich content, baggage data or other data; it can manage connections, and support interline ancillary sales across carriers.”
The NDC Exchange is seeing “quite an increase in inquires and industry interest,” Fall said, noting there’s been an uptick in signups over the last three-to-six months. There are currently 85 airlines and sellers that are in various stages of onboarding. About 25 of those NDC Exchange members are major airlines, or sellers either currently connected and/or live and nearly “production-ready.”
This past summer, Southwest Airlines and Air Canada became the latest airlines to join the NDC Exchange.
“There are several benefits of working through the Exchange,” Rob Brown, senior director of B2B Strategy at Southwest, told Kambr Media at the ATPCO Elevate conference in October. “For Southwest, number one, it allows us to connect to multiple partners without having to do one to one connections with all of those various partners cause it can be expensive and inefficient in terms of the time it takes, in terms of speed to market.
“By connecting our API to the NDC Exchange, that's just one connection for us,” Brown added. “With the Exchange, we can manage how many partners we want to allow access to our content. So to make that clear, it helps us from not only a cost perspective, in terms of one connection versus many. It also helps us from the speed-to-market perspective because we're not spending time onboarding each individual partner. Once they've connected to ATPCO, via NDC Exchange, we can flip them on or not flip them on. In the end, the Exchange expands the breadth of our API partner portfolio.”
The adoption of NDC Exchange has a positive ripple effect, Fall said: once a new airline is connected, the more sellers are coming onboard and vice versa. For example, once Southwest connected to NDC Exchange, travel management company AmTrav was able to connect to Southwest via the platform in under a month, Fall said, “which is extremely quick.”
More recently, corporate travel platform TripActions is connected to Southwest via the NDC Exchange, “enabling Southwest customers to enjoy the same great offers via more booking channels,” Fall added.
New Zealand corporate travel management company Serko started its NDC Exchange journey with SITA initially about 3 years ago and then with ATPCO for 2 years.
Bob Shaw, co-founder and chief product officer of Serko, cited the ATPCO’s and SITA’s “mutual goal of changing the corporate travel experience and focusing on the traveler,” especially the NDC Exchange’s ability to personalize transactions within corporate travel policies.
Serko has been cited by ATPCO as an “NDC Champion with our early adoption and insight to where the market is heading e.g., our (two-year-old) Zeno platform delivered the experience and ability to enhance an airlines ability to promote their content the way the airlines intended,” Shaw said.
As a travel management company, Serko’s Shaw listed the NDC Exchange’s benefits as:
If IATA’s NDC standards is the pathway to untangling the unconnected tech systems between airline retailing players, why is ATPCO’s NDC Exchange necessary?
The adoption of NDC has been slower than originally expected, Fall said, but he and other analysts, such as Atmosphere Research Group’s Henry Harteveldt, who has observed more steady growth of the data format.
“NDC has brought a lot of attention, but there's a lot of misunderstanding of how NDC works,” Fall said. “Our deep expertise in airline distribution and neutrality puts us in a position where we are able to educate the industry at large and make sure that everybody understands the value of what NDC offers. We help airlines expedite their strategies and are able to bundle other offerings, such as with Routehappy’s rich content, and with the NDC Exchange to maximize their cost and time-to-market.”
IATA doesn’t do the development aspect of the solution; they are focused on providing guidelines for NDC standards, Fall noted.
“We developed an NDC solution utilizing IATA’s standard,” he said. “We've been extremely supportive of IATA’s NDC standard and have continued to look at ways to help airlines adopt it more quickly. We're on each other's standards boards, and we have close relationships that help benefit our industry stakeholders.”
By working within the NDC Exchange framework, airlines are able to extend their reach so their product will be displayed in more channels.
As the byproduct of a system that coalesces all parties into a single marketplace, the NDC Exchange offers the added value of scale and reach. In a way, a good analogy to the NDC Exchange is an airport currency exchange.
“For example a Canadian airline, has an easier time connecting to Canadian agencies than it does to sellers in other countries,” Fall said. “With the NDC Exchange, that same airline would have access to a global network of travel agencies. If we have a travel agency in Australia that is already on the NDC Exchange, that OTA will have access. That Canadian carrier also brings its Canadian network to the Exchange, which opens those players up to the other carriers on the NDC Exchange as well. It’s like that old shampoo ad, ‘I tell two friends and they tell two friends, and so on, and so on…’”