The International Air Transport Association (Iata), the global airline representative body which has 240 member airlines responsible for 84% of world air traffic, is to examine the technical feasibility of its planned New Distribution Capability (NDC) standard during the first half of this year. Should all go well, Iata intends to launch NDC pilot projects before the end of the year.
“The project was launched by the [Iata] board of governors,” explained association senior VP: industry, distribution and financial services Aleks Popovich at a recent press briefing in Sandton, north of Johannesburg. “It’s a standard. What Iata does is standards for industry. “That’s our core business. Global standards are good – they open up competition and make space for new vendors.”

The challenge facing the industry is how to merchandise the full range of product offerings by all airlines across as broad a range of platforms as possible. At the moment, each airline can really only do this through its own websites, but this is not very convenient for the customer, as it makes comparative shopping rather time consuming.
“The NDC is a standard for airlines to sell their full products through travel agents,” he elucidated. “Far from bypassing the travel agents, we want to go through them. “The NDC is simply about doing merchandising through the travel agent channel and for customers to do comparative shopping for full airline products.” Benefit
The intent is also to benefit the existing Global Distribution System (GDS) enterprises which provide centralised travel booking services. “The GDSs are actually collaborating with us on this project. “They are participating very actively in this process,” he reported. The main GDSs are Amadeus, Galileo, Sabre and Worldspan and they were originally set up by major airlines, starting in the 1960s, to exploit advances in computer technology (then still based on mainframes). Later they were largely spun-off and are now independent companies.
The hope is that the NDC will increase transparency for the consumer, increase competition and boost revenue for all in the industry. The airline industry has suffered from low profitability for decades. Over the past 40 years, the average operating margin for the world’s airlines has been 0.1%. “This is not healthy,” stated Popovich. The NDC is intended “to unlock revenue and make it a win for every party”.
“The NDC will enable the airlines to directly manage their own products and distribute them as they want,” he stated. Personalised Products “It will also allow them to personalise products. But they will only be able to personalise products if the customer wants those products to be personalised. “The customer can compare and shop for the best airline for their needs.”

The NDC programme was launched by Iata after the World Passenger Symposium in October 2011. “It came from a dialogue involving travel agents and airlines.” In October last year, Iata member airlines agreed to the proposed Foundation Standard for the NDC. This is now being implemented.
“It describes what the standard will look like, but at a very high level,” said Popovich. “It comprises ten pages. We are committed to collaboration with travel agents, GDSs and [information technology] providers. It’s an open standard, developed with broad participation. Iata will not be writing the software. It’s a standard, a common language, enabling common communication with each other. These are XML (Extensible Mark-up language) standards because these are, right now, the most flexible standards around.” XML is now dominant, but not yet universal, in the air travel industry.