Message by Tony Tyler, Director General & CEO
Times are tough. The industry is on track for a small profit of $4.1 billion this year. That is less than half of 2011’s total. And the net result will be a razor thin margin of just 0.6%.
Tough times breed great innovations. The Passenger Services Conference approval of the foundation standard for a New Distribution Capability (NDC) makes possible a revolution in airline retailing. NDC, based on open XML standards, will modernize how airline products are displayed across all channels—including through travel agents. Think about the product information provided when shopping for hotel accommodation. You can see pictures of the rooms, and read descriptions of amenities and services. And a fully personalized experience can be built by choosing options ranging from champagne and flowers on arrival to views from the window, pillow preferences and much more.
Some airlines offer similar experiences on their website. But travel agents depend on GDSs to display offers for airline seats which are commoditized around code letters—F, C and Y being the most common. These booking classes were created by IATA decades ago. Now it is time to evolve them to product offers. F is hardly a robust description of a private cabin with a bed and shower access—not to mention fine food and entertainment.
NDC is a value chain project. Experts from IATA, airlines, travel agents, TMCs, technology providers and others are collaborating to move from concept to reality. The result of their efforts will unleash innovations that will change the face of airline retailing. That means greater transparency and a better shopping experience for our customers. And it will create new opportunities to generate revenue with innovations across the value chain.