Graham Wareham has been in the thick of airline distribution evolution, at Air Canada and now as global director of ATPCO’s distribution portfolio. In this guest column, Wareham provides a history lesson on how airlines brought sales and distribution into the digital age, explains current industry efforts toward standards and urges players in the chain to build out the infrastructure.
In his guest column in The Company Dime, Jeff Klee called for a pivot in the airline industry’s approach to enhancing distribution capabilities, and I agree. But it should be a pivot that moves us toward creating infrastructure that closes the gap between product offerings in different distribution channels.
The New Distribution Capability initiative driven by the International Air Transport Association has done more than align the industry toward a common standard. It has served as the platform for an industrywide conversation on the evolution of airline distribution. Airline distribution has been evolving for a long time, much longer than we’ve been talking about technology standards.
Some 25 years ago carriers started experimenting with direct distribution via the web. As technology evolved, so did airline product offerings. Airlines started experimenting with APIs in order to establish further direct methods of distribution.
Airlines spent much of the next decade exploiting new digital capabilities and innovating their product offerings to respond to changing consumer demands. Early efforts in what we now call merchandising popped up around the world.
In the late 2000s, a group of carriers partnered with Farelogix to try to develop standards that would facilitate the adoption of this new direct connect model. The Open Axis standard emerged from those efforts. In parallel, carriers continued to innovate their product offerings and services. Unbundling services and adding new product options afforded customers with more choices and the ability to customize their travel experience.
The Open Axis Group continued to evolve the standard but struggled with broader adoption. In an effort to increase the global reach of the new standard, Open Axis engaged IATA to take over and NDC as we know it today was born. This led to the publication of the first NDC standard in 2015. All the carriers that were part of Open Axis joined IATA’s Passenger Distribution Management Group.
Along with several other global carriers, this group led and advised the development of the standard. I served as chair for two years. During that time industry dialogue was very strained and the effort met considerable resistance. Getting the standard passed was a Herculean task.
Over the last two years, IATA advanced the work needed to gain industry adoption. There is a much broader conversation now taking place, not only among airlines but also among GDSs, technology companies, travel agencies and corporate buyers. This adoption phase would not be possible without all the hard work put into establishing a robust standard that contemplates all aspects of the end-to-end process.
Although it has been a long road for carriers involved, the standard is coming at the right time. Product innovation has been constant. The gap has been widening between the available products in direct and indirect channels. The customer’s experience during the shopping and buying processes also varies quite a bit between channels. The time has come for adoption. The missing element now is the industry infrastructure to support the new capabilities.
What made the existing distribution model successful was its efficiency and breadth, supported by companies like ATPCO, OAG, ARC and the GDSs. Getting airline products to market was efficient and consistent because there was not only a standard but also the infrastructure needed for global distribution. Now, new product development outpaces the infrastructure.
The efforts of Routehappy by ATPCO to develop an industry standard for airline rich content reflect the work underway to allow for wide adoption of meaningful capabilities. Bringing standards and new distribution capabilities together (and having them work together) is what we need today to move the industry forward. That’s why you have seen ATPCO and Sita partner to produce NDC Exchange for the industry.
The time has come. The rest of the industry is joining airlines to make direct connections a greater part of the distribution model. The products are there and so is the standard. All that’s missing is the infrastructure to support the industry and broad adoption.
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