Farelogix
14 days ago
 

NDC hits US at last: United taps Amadeus’s XML to sell ancillaries [UPDATED]

Today Amadeus said that United Airlines is the first carrier in North America to adopt a new way of connecting to the company’s new XML-based ancillary sales service.

It is the first global distribution system XML feed for merchandising that has been configured to be compliant with the new communications standards approved by US officials in August.

Amadeus’s Airline Solutionsnew XML feed new way of connecting its service to a carrier* — namely, via NDC version 1.0-XML connectivity — will make the carrier’s Economy Plus seat upgrades available to travel agencies in the US, Puerto Rico, and the Virgin Islands, during the initial booking or after a ticket has been issued.

*CLARIFICATION: The “industry first” is that IATA NDC version 1.0 is being used in production by a carrier in a travel agency network. It is not the NDC-XML connectivity that delivers ancillary services. I’ve replaced my original wording of “new XML service” in the above paragraphs to be precise. To be really technical, the sanctioned NDC standard is still being refined in its fine points, and while a version has been sent to stakeholders, the sanctioned standard has not yet been officially promulgated.

It may seem like a mundane and technical announcement to people outside of the trade. But for insiders, it is symbolic of an industry tipping point.

It represents something of an about-face by Amadeus. The technology giant is getting out in front of the industry by adopting new communications standards — at least in their version 1.0-format — that it has resisted for years.

More broadly, the move anticipates a major expenditure in the travel industry on a new technology, because other airlines and other intermediaries are likely to follow suit.*

*CLARIFICATION: A spokesperson for Sabre, another global distribution system (GDS), says that it used XML (albeit not the NDC 1.0 version) to enable the sale of United’s premium seat option in the Sabre GDS months ago.

The company says it used the XML standard United preferred for it to use at the time of development. It claims that Amadeus’s United seat offering is no different in substance from what Sabre offers.

In what Tnooz believes is its first public statement of support of an NDC XML API, the Sabre spokesperson adds: “We stand ready to work with any airline who wants to use NDC.”

The backstory

The news comes at the end of a years-long battle by major airlines to prod the industry to adopt a modern communications standard to sell tickets and ancillaries through travel agencies.

This past August the airlines marked a victory when US officials finally approved the founding documents of the effort.

Today United becomes the first US airline to put into service those standards, called the New Distribution Capability, or NDC for short.

Airlines cooked up the NDC initiative out of frustration with the middlemen in the distribution process — the three global distribution systems (GDSs), namely Amadeus, Sabre, and Travelport.

Airlines had several gripes with the GDSs. But their most urgent complaint was that they felt the GDSs did a poor job of selling ancillaries, such as seat upgrades. In recent years, ancillary sales have exploded as a huge source of revenue for the airlines.

Airlines mounted pressure on the GDSs, but the GDSs resisted the expense the upgrade would entail.

For instance, today none of the three major GDSs sell Air New Zealand’s Economy SkyCouch — three seats for the price of two, to allow passengers to lie flat during flight — even though that product debuted in spring 2011.

CORRECTION: Sabre has been selling Air New Zealand’s Economy SkyCouch for a while now. I regret the error. While that product debuted in spring 2011, it took more than two years for any GDS to integrate it.

UPDATE: A Sabre spokesperson comments:

Sabre has been successfully selling ancillaries for airlines worldwide for more than five years. We have enabled more than 20 airlines to sell ancillaries using a variety of technologies, including IATA’s EMD.

We use whatever technology the airline wants us to use. And we’re selling the ancillaries in the manner the airlines requested.

There is little focus in the media on the success technology companies have had on helping airlines market and sell their ancillaries.

The first airline effort to push for change was the Open AXIS project, a non-profit project by airlines, intermediaries and technology companies to come up with new standards. For example, United and Continental, its merger partner, were founding members in 2010.

None of the GDSs joined Open AXIS, and none of them would support its early standards.

UPDATE: A spokesperson from Sabre has issued this statement to Tnooz:

Sabre has never been opposed to technology standards – far from it – we have been tremendous advocates for them because they make sense for everyone!

NDC did not start out as a technology standard – it was about much more than that. At the time IATA first introduced NDC, the concerns raised were about business model changes NDC would cause and a number of troubling requirements we felt crossed the line of personal privacy.

(Originally NDC would not provide a shopper with fare information unless they divulged personal information, including information about their salary and marital status.) Those were the issues at hand, not that IATA wanted a technology standard.

We are for technology standards. Having them makes everyone’s life easier, the technology can be implemented faster, less expensively, and so on.

Until there is a technology standard, technology vendors are forced down the costly and time-consuming road of developing one-off solutions for each airline to match the needs of the technology they are using.

Amadeus continued to voice its reservations about aspects of the the initiative in multiple forums, even after the proposal was officially endorsed by the International Air Transport Association in autumn 2012.

But by winter 2013, Amadeus began to express qualified support for the core aspects of the overall project to adopt XML-based standards — though still resisting the original intent.

The subtlety here is that Amadeus is a large organization, made up of multiple minds.

Amadeus’s GDS arm appeared to be opposed to all NDC-style initiatives, while its airline services side seemed to be very active behind the scenes in wanting to support NDC-style technological standards.

United Economy Plus

What’s new

Amadeus’ Airline Ancillary Services Solution says it is the first tool to adopt XML (version 1.0) connectivity in the travel agency channel in North America.

Amadeus says 22 other airlines worldwide, such as Air France and Etihad, are distributing ancillaries through the travel agency channel via its Ancillary Services Solution (though not yet via NDC 1.0-compliant XML feeds).

Dozens of other airlines have signed up to use the solution for direct or indirect sales.

To be clear, using XML is not what’s new.

Geographies aside, Amadeus has been distributing Easyjet ancillary services through XML since December 2007.

Sabre used XML (albeit not the NDC 1.0 version) to enable the sale of US Airways’ premium seat ancillary offering, and with easyJet.

Similarly, XML has been used by technology provider Farelogix’s to power ancillary offers between Air Canada and Travelport for about four years.

What’s new is that Amadeus’s airline services side can now support select United messages from United’s PSS, HP SHARES, into Amadeus’s GDS side, via NDC standards.

Other industry players will likely copy the move. Already, other major airlines have quietly told the companies providing their PSSs that they want those hosting systems to support NDC.

To be sure, other NDC-XML initiatives are underway in the industry, but they are pilots (such as ones run by JR Technologies) or else are not in full production or officially announced; or are in the direct channel, i.e. for airlines’ websites; and may not be using the most updated version of the IATA verbs, i.e., the fully-compliant NDC version 1.0 standard.

How it works

United continues to use Farelogix merchandizing engine to create ancillary offers (the price for a seat upgrade, bag fees, etc., which all sits underneath all of United’s IT systems for its sales channels).

When United creates an ancillary offer, Farelogix’s system powers the distribution to united.com, the airline’s kiosks and mobile apps and to the GDSs.

As of now, United is now communicating those offers to Amadeus via the NDC-1.0 standard.

Victory for the airlines

Jim Young, who was a leader of the Open AXIS group back in 2010, told Tnooz:

UA and Amadeus working together demonstrates the vision that the Open Axis airline founders had for an inclusive distribution system that gives them the flexibility to merchandise ancillary products and services in a cost effective and productive way with 21st century technology standards.

Aleks Popovich, IATA Senior Vice President Financial and Distribution Services, said in a statement:

“We welcome the introduction of this NDC 1.0 solution to enhance distribution in the travel agent channel. Technology providers play an important role in moving industry standards forward and unlocking value for airlines and their passengers.

We have high expectations that by combining technology and merchandising capabilities, the Amadeus Ancillary Service Solution will play a leadership role in the evolution of airline distribution.”

 
 
Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill is a New Jersey-based reporter for Tnooz. He's also a regular contributor to BBC Travel.

Follow him on Twitter, Google+, and his personal site .

 

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  1. Anders Bernstrom

    Hi Sean, You are missing the reference to your own article on Amadeus view as of August 1, 2012. http://www.tnooz.com/article/gdss-respond-to-iatas-planned-new-distribution-capability/

     
  2. Laurent Boudic

    Thanks Sean for this very interesting article.
    The NDC will certainly lead to a profound industry shift.
    I hope other industries, the hospitality in particular, will learn from it, as they’ve done in the past.

     
  3. Paul Byrne

    Now that Amadeus are talking NDC to HP Shares (via Farelogix, for United Airlines), will they return the compliment and expose NDC from their own Altea PSS to provide their airlines with better merchandising capabilities? Hmmmm…..

     
  4. Timothy O'Neil-Dunne

    Reading the TINY print on this. This is not the first implementation of NDC in North America. There are many intermediaries and a pretty healthy volume of business flowing through NDC compatible pipes for airlines in the TC1 marketplace. Congrats to Amadeus to finally see the light. Now about those chaps in Dallas ….

    Cheers

    Timothy

     
 
 

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