Mark Meader On IATA’s One Order

By | June 26, 2018

[CORRECTION, June 28, 2018: The International Air Transport Association projects its New Distribution Capability initiative to achieve critical mass by 2020, not 2022 as originally stated here, according to a spokesperson. This article has been updated to reflect that projection.]

The travel industry still is trying to understand the consequences of IATA’s New Distribution Capability. That hasn’t stopped the association from pushing ahead with a big, related project. Dubbed One Order, the initiative is meant to unify airline booking, ticketing, delivery and accounting methods. Mark Meader, the American Society of Travel Agents’ SVP for industry affairs, education and IT, points out several questions and considerations.


While many are not optimistic, the International Air Transport Association projects its New Distribution Capability to reach critical mass in 2022. NDC transforms how carriers retail products by enabling differentiation. Consumers would access “rich content” ostensibly leading to a “more transparent shopping experience.” It’s complicated and impactful to the travel management community. Airlines continue to move at varying paces, some using earlier versions of the standard, some only adopting the standard to a varying degree and some not at all.

Nevertheless, IATA already is working on the follow-up: IATA One Order. While NDC is intended to “enhance” air distribution, One Order is intended to “simplify” it.

Conceived in 2016, One Order is almost certain to be many years in development and of high impact to every segment of our industry, including the travel agency channel. IATA envisions One Order to follow on the heels of NDC, eliminating what the association calls the “superset of data” contained in today’s passenger name record, electronic ticket and electronic miscellaneous document. Yes, you read that right – the elimination of the passenger name record (PNR), the e-ticket and the Electronic Miscellaneous Document (EMD), at least as we know them.

The intent is to combine the content of these records into a single customer-focused “order.” Another way to look at One Order is through IATA’s verbiage:

1. A combined, single travel record
2. A reengineering of “the travel commerce process”
3. More efficient “billing and real-time synchronization of relevant information between all parties”

According to IATA, it’s all about digital transformation, “expanding the benefits of NDC,” enhancing the order structure to cater to ticket delivery and accounting, and removing the dependency on current e-ticket and EMD data storage. It’s also intended to “define the principles of ownership, management and control of the order elements between entities,” including travel agencies and TMCs we presume.

Mark Meader, ASTA

Mark Meader, American Society of Travel Agents SVP for industry affairs, education and IT

In a nutshell, it’s intended to streamline the ticket fulfillment (delivery) and ticket settlement process. Wow!

By IATA’s own admission there are huge risks and challenges with this effort — both to airlines and a multitude of industry players including the agency community.

On the carrier side, the challenges range from contract implications to airline operational and service complexities to managing traveler expectations to overall transition management. Like NDC, this will not be a knife-edge cutover.

The inevitable need for individual carrier business cases that assess implications and ROI are also bound to be a factor. For TMCs and agencies who today use the PNR and e-ticket as identifiers for many internal processes, moving to One Order will come at a cost. Solution providers and other third-party systems in real time will need to display and interact with the complex offers and orders, and new “rich content.”

Let’s not forget other segments that can be part of today’s PNR: hotel, rental car, travel insurance, etc. Then there is the ticket itself. Today it is considered a contract between carrier and traveler. How will that carrier/traveler agreement be managed going forward? In general, commercial agreements between carriers and a multitude of parties will need to change. All big undertakings.

IATA predicts One Order will reach critical mass, or “steady state,” by 2025. But IATA also admits there are challenges to the initiative. For one, the industry would have to maintain both old and new processes through what inevitably would be a long transition.

Many current PNR and e-ticket-related processes — like ticket exchanges and airport ticketing control — will also present significant challenges. IATA acknowledges data migration and integration as a huge challenge, and rightly so. Interlining between carriers will be significantly impacted.

Very importantly, business continuity for such airline operations as reservations, ticketing, customer servicing and revenue accounting will be a daunting challenge. By IATA’s own admission it will “take time to build momentum” and the risk of “uncontrolled cost, scope creep and effective cost management” is high. Can and will it be done? The longer it takes, the higher the cost.

The necessary process reengineering on both the carrier and agency sides has yet to be mapped but will need significant study before enhancing. How quickly can carriers reap the value of this change? It will take years.

The agency partners that carriers are so reliant upon may not adopt One Order quickly. Or they may do so only partially, much like with NDC progression today. This added complexity will impact the agency and airline communities, the settlement process, technology and more.

There could be great benefit from the initiative’s outcome: one confirmation number to account for air, hotel, car rental, tour and all the other components of a journey. A collaborative approach to this evolution must include input from every sector of the industry — the agency and TMC community included. It should not be blindly pushed through without due consideration.


Related
Mike Premo On What NDC Means For Corporate Travel Managers
Explainer: IATA’s One Order
Attendees See IATA/Travel Management Company Meeting As A Good, If Belated, Start
On NDC’s Seemingly Contrived Inclusion In The Latest Airline Distribution Announcements
NDC Registration Isn’t Meaningless, But Also Doesn’t Say Much

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Caroline StrachanBen Alvarez Recent comment authors
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Ben Alvarez
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Ben Alvarez

Great article Mark getting this One Order discussion going. Long overdue. The PNR is archaic and there are so many bolt-on apps to it that it’s a wonder it works. It will be long and painful but in the end should result in a great improvement in productivity, timeliness and accuracy.

Caroline Strachan
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Great summary Mark. I only challenge your final line, One Order isn’t being “pushed through blindly.” Far from it. As you’re aware the Festive Road team have been supporting IATA with engaging the TMC community on NDC for the past 2 years. The first year in listening mode and the second year responding to and supporting the TMCs based on all of their initial feedback. This includes starting to bring One Order to the table with specific TMC working groups to ensure the TMC voice IS heard from the start. The program isn’t ready for broad engagement yet. It’s like… Read more »