Airlines move closer to speaking the same sales language

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IATA’s Resolution 787 – which will serve as the foundation for a new XML-based data transmission standard for the airline industry – has received final approval from the US Department of Transportation, after gaining tentative approval on 21 May.

The so-called New Distribution Capability (NDC) aims to modernize the marketing and sale of airline products by enabling all market players – airlines, travel agents, global distribution systems (GDSs), and consumers – to “speak the same language” in their communications with each other through a common data transmission standard, said the DOT in explaining its decision.

With the path now cleared to begin implementation of NDC on a voluntary basis, “the next step is the release of the first comprehensive set of NDC end-to-end schemas, so the travel industry can start defining how to best take advantage of the new capability”, said IATA director general and CEO Tony Tyler.

“We look forward to working with all stakeholders to advance the standard for transmission of airline product offers. This will enable travel sellers and consumers to have access to all of an airline’s products and offerings and to compare the full value of the product offer, not just the base fare.”

Responding to today’s news, Atmosphere Research Group travel analyst Henry Harteveldt told RGN, “All we’ve seen today is the expected regulatory green light. Now the hard work has to start. IATA, the airlines, and their technology partners have to turn NDC into something real and relevant. That’s easier said than done.”

As part of its tentative and final approvals, DOT accepted the conditions proposed by IATA and Open Allies for Airfare Transparency to ensure that no traveler is required to supply personal information to receive an airfare offer; that the standard remains voluntary and that each airline is free to choose its own data exchange methodologies. These stipulations were made after the Business Travel Coalition (BTC) and others sounded the alarm that NDC would require customers to give up substantial personal information – name, age, nationality, contact details, frequent flyer numbers, martial status, purpose of the trip and travel history.

Following the DOT’s 21 May tentative approval, BTC said, “DOT has protected competition and consumers by imposing several important conditions on its approval of Resolution 787.”

Harteveldt believes the adjustments requested by the DOT “will be good for consumers and, thus, airlines”. He noted that airlines have to be “channel neutral” in how they deploy NDC, meaning that GDSs and travel agencies “will have the ability to compete with airline direct channels”.

“Protecting consumer privacy will help sustain traveler confidence when using digital channels to plan and book their flights,” he added.

Meanwhile, future IATA agreements involving the application of NDC would be subject to separate DOT consideration.

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