Breaking the Code
By Tony Tyler, IATA's Director General and CEO
IATA’s mission is to represent, lead, and serve the airline industry. That’s a mandate of global proportions. And it could not be fulfilled effectively without the ability to move efficiently around our planet.
In the first nine months of the year, I had the pleasure of taking more than 100 flights, and each flight was a unique experience. The airline industry is full of innovation. Some airlines have put a great effort into the food and onboard shopping or entertainment experience. Others have great seats—even private cabins—and fabulous lounges. For a growing number of airlines, the marketing proposition is focused on “cheap and cheerful” with a pay-for-what-you-use product philosophy. And many carriers adapt their offering to individual markets—so the intercontinental experience is very different from the commuter flight experience—even within the same class of service.
The options for travel have never been greater. A look through any airline website makes that absolutely clear—in full color and possibly with 360-degree imaging. But the majority of airline tickets—some 60%—are sold via travel agents who view an airline’s inventory through global distribution systems (GDSs). There are no images, enticing product descriptions or helpful suggestions based on travel patterns. At the point of sale, airlines talk to most of their customers via travel agents and in code.
It’s time to break that code. Airline distribution needs a modern, alternative channel that is as flexible and convincing as the best online retailers, such as Amazon. Making that innovation possible is the focus of IATA’s New Distribution Capability project.
Innovation is not waiting. Already we have seen alternative channels developing between airlines and some ambitious intermediaries, but these are expensive one-off projects. Each one requires the airline and their partner to agree on protocols and standards to make the inventory available. It can work. The idea is mature. But creating individual solutions for each new relationship is not an efficient way forward.
IATA is working with partners across the travel value chain—including the GDSs—to create an open set of global software standards. The open standard approach has been at the heart of the success of products such as the iPhone. Open standards have unleashed enormous innovation that has changed the way people exchange and use information, through the development of applications. In the same way, developing a new set of XML-based standards should enable the development of new distribution solutions.
Some solutions may go “viral” and change travel as profoundly as the GDSs did decades ago. Others may go nowhere. But there is nothing to lose and everything to gain by developing new interfaces that are able to present airline products in the way that airlines want to sell them.