Jorge Diaz, Founder and CEO at AirGateway. at Travel Tech Conference Russia (http://traveltechcon.ru/eng).
"NDC brings a huge architectural change with it: A whole transitioning from the indirect distribution model to the direct distribution one, returning the control and ownership of the supply chain to airlines".
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2. The indirect distribution model
2
Airlines GDSs
OTAs
TOs
Consos
TMCs
• Airlines depend entirely of GDSs in order to deploy new products or ways of commercialization
• Airlines don’t control (at all) the booking flow which is proven to be part of the customer experience
• Airlines can’t engage its final consumer in their B2B channel (commonly bigger than B2C for legacy
carriers)
3. The new model: NDC (New Distribution Capability)
• Standard created by IATA
• Brings the distribution channel ownership to airlines
• Facilitates fast deployment of new products across
channels, regions, and consumers
3
Airlines
Amadeus
Altea
OTAs
MS
TOs
Consos
TMCs
• Enables airlines to control the booking experience in B2B channel
• Facilitates dynamic pricing, personalized shopping, ancillaries
distribution, and a unique booking/PNR owned by the airline.
NDC
Sabre
Sonic
Farelogix
Datalex
4. 4
Why Direct Distribution is happening?
Ancillaries B2B Distribution
Dynamic Pricing
Personalized Shopping
Distribution Costs
Channel Ownership & Differentiation
5. Airlines involved with NDC direct-distribution
5
IATA expects +90 Airlines to be delivering NDC APIs in 2020.
Same airlines who created the GDS’s 30 years ago (Lufthansa, British
Airways, Iberia, American Airlines) are leading the change to direct
distribution.
In June 2016, Lufthansa announced a 16€ surcharge for every single
ticket sold through GDS’s systems. Amadeus shares went 22% down next
day in the morning.
IAG recently followed this steps and it’s expected a domino effect in the
whole industry. Traditional carriers are challenging the GDS oligopoly
6. NDC in production
6
“Skyscanner’s Direct Booking solution, which
seeks to provide a flexible, optimized retail
experience, has seen an across-the-board
increase in conversion of 20% among the airlines
and online travel agencies that have adopted it.
In the mobile channel, where Skyscanner has
worked to bring the right options to the top of
the search in an increasingly small space,
suppliers have seen up to a 50% increase in
conversions.”
7. AirGateway in the new layout for the industry
7
GDS
(PSS)
MS
OTAs
TOs
Consos
TMCs
AirGateway
NDC GTWY
Air
Air
Air
Air
Air
8. Aggregation as a Marketplace
8
OTA OTA OTA
AIR1 AIR2 AIR3 AIR4 AIR5
AirGateway
Offer
Demand
As an aggregator we have
a very privileged position
to become a market
scouter.
NDC is a conversion-
oriented retailing
workflow.
Performance is the KEY.
We can get the
big picture of market
in terms of data workflow
We can estimate conversion
prices per route, cabin, class,
and type of passenger(s)
9. Status
9
We have been working for 2 years in our aggregation platform
with special focus on:
- Flexibility to support all existing NDC implementations in the
industry and different capabilities among airlines.
- Pure Real-time vs. fare caching. The airlines DON’T WANT to be
skipped
- Our NDC Gateway can deal with Scalability better than
traditional aggregators because we used a technology
specifically intended to support extreme concurrency situations.
Currently we are the only B2B Airline aggregator
specifically focused on NDC