Peace with honour – an idea to bring harmony to the world of airline distribution?

Détente, meeting of minds? I am going to hypothesize how the industry as a whole can get behind the ideas surrounding IATA’s NDC and find some common ground for moving forward.

From the first part of this treatise, I have put four major topics into the frame as the important elements that define the issues of NDC.

  • Capability
  • Change
  • Control
  • Economics

So, let’s deal with the issues one by one.

1. Capability

Okay, reality check – the current IATA-controlled, airline-specific standards have a wide range of issues to contend with. Years of compromise have resulted in band-aids being put on band-aids.

Don’t get me wrong, these are smart and expeditious decisions made by a concerned group of people. The lack of functionality is not really anyone’s individual problem nor can people be blamed as individuals.

However the capability to add a flexible product set is clearly required. We need to get past this issue and have all stakeholders involved – but, please do not design a camel to be a racehorse. We will end up with this year’s mule.

Capability must be increased both at the level of the new products, services and functionality, etc. Incremental change is not an option. Indeed, the industry should think pro-actively and address some long-running problems.

Don’t just try to re-engineer the past.

2. Change

One of the hardest problems to address is changing the agent user interface. The green/blue screen has served the industry well BUT it’s just clunky and awful. Even years ago, when I was a mere pup in the business, I thought it was horrid. Then I started to use it, and I realized how powerful it was.

The standard results from the core mainframe based solutions rarely gave the answers you needed – but with a good deal of knowledge and practice the system was like a treasure trove as it would eventually deliver the results an agent wanted.

Rather than trying to fix the problems, agents (oh, yes, I used to be one) got really good at circumventing the system and manipulating it to do their bidding.

Now its day has passed (and there are real things you cannot do with it) and we need to retire the structure and restrictions of the command line system.

That will not be easy and the changes must show an improvement in functionality and capability and, most importantly, agent productivity in order to get buy in from the user community.

Good luck on this issue. It will haunt us for years.

3. Control

The changes in the competitive marketplace, which regulators in various jurisdictions have allowed, has changed the control over distribution. The marketplace has moved from a demands side business to a supply dominated one.

In my opinion, the guy who owns the inventory and the guy with the most economic power wins. As far as I can see, the airlines have already won this battle.

The GDSs are fighting a concerted rearguard action, but they have to accept declining market share of airline segments. Bottom line – control of inventory rests with the airlines and they run the show. They can do anything they like.

4. Economics

So where does this leave us? Economics. The core of the entire argument is the conflicted and convoluted economic model that exists today. Frankly the airlines have to take responsibility for starting the war.

Once the airlines stopped paying agencies, they lost the right to tell the agents what to do. Deftly they handed an opportunity to the GDSs, an unintended consequence for sure. While this is a facile assessment of the results, it hides a great deal of complexity.

The airlines are now starting to see that they can make money from their operations. Airlines have stopped talking about the dire consequences of their imminent collapse and instead talk about Return On Capital Invested.

The LCC model showed how it can be possible to make consistently good profits. Largely driven by re-casting the product and controlling costs, LCC airlines have been able to show they can achieve success.

Humor me, and let’s look at the relative values of doing business.

A case in point is Google. The search giant’s gross revenues from air-related businesses (it’s complicated but having spoken to several analysts this is what I’ve come up with) are about $4 billion to $6 billion.

That’s getting close to the $7 billion figure often quoted by IATA as an industry cost figure for using the GDS.

These two financials measurements are getting closer and should easily pass one another within the next 12 months.

But as one industry colleague put it to me:

“So, it [Google] may not be pulling in more than the GDSs, but it is doing a heck of a lot better than the GDSs in selling contextually relevant advertising.”

Thus my assessment is the spend by the airlines in Google is returning to them measurable results that appears better than GDS spend. Now couple this with the large amount of money the airlines are making from ancillaries, and I am sure there is a germ of an issue in here somewhere.

I believe that the airlines over the next two to three years will have about 25-30% gross revenue boost possible from selling ancillaries via intermediaries. This obviously translates to a lot of money.

The latest report from Ideaworks shows that airline ancillary revenues have increased from a first tracked figure of $2.4 billion (2007) to $13.5 billion in 2009 to $22.6 billion in 2010, and in 2012 to $28 billion.

It also showed some pretty interesting total figures, with Qantas coming out on top by collecting $56 per passenger in ancillary revenues. In reality this only scratches the surface of the opportunity.

My estimate of the amount of ancillary revenue possible in the next few years via the intermediary channel comes in at about $7 billion or even higher. Wait, isn’t that the same number that IATA says the GDSs charge?

Bigger picture

So, here is my idea. Let’s let the airlines compensate the distribution channels through ancillaries rather than a passive booking fee.

Starting with a 10-20% fee of a variety of different permutations, attached to an airline’s bottom line, I believe will generate good will and revenue for the airlines via the intermediary channel.

Given that the GDSs will have significant work to implement this plan, they (on a merit basis) should be entitled to tap into that stream. The result will be a revenue-based incentive program tied to the fortunes of their ability to generate the extra revenue, rather than just sitting back and collecting the cash from a simple passive transaction fee (aka the segment fee).

This creates a win all round. Airlines win because they have a distribution system that is incentivized based on their performance; agents will win because the airlines will recommence compensating them.

As Cory Garner of American Airlines (the carrier’s evangelist on ancillary revenues) states in a recent interview:

On the fare side,” he said, “any time we think that there is potential for incremental revenue from a travel agency, there is an opportunity to share that value.”

Garner said the same principle would apply to travel agencies generating incremental revenue for optional services.

“There is an opportunity to share the pie,” he said.

There is much work to do and, of course, there will be many challenges along the way.

Success even with this revolutionary approach is not assured. But one thing I know is that unless we can all move beyond the current battle, then the industry will suffer.

Of course, there are other stakeholders who need to be added to the mix. I strongly believe that there should be a lot of cross-industry collaboration – after all, the consumer doesn’t care about the individual elements – he or she cares about the trip, overall journey, the mission: a holiday or business meeting.

In the end I believe the whole Industry wins, simply because the distribution channel is more agile and focused on selling products the supply owners’ want to them to sell AND that consumers want to buy rather than a limited set that are constrained by the technology and structure of the current system.

I believe then we can adopt solutions from other market sectors.

So there you have it – Kumbaya, peace in our time (as ex-president Richard Nixon said to the describe the end of the US’s involvement in Vietnam).

As was the theme for that SITA IT Summit in Brussels two weeks ago, genuine cross-industry collaboration should not only a thought, but a reality.

I’m sure others alongside me would be very happy to see this happen on a fair and equitable basis, where the gatekeepers unlock the barriers and the market opens up to new entrants and new models.

The GDSs then become a real friend to the industry. A so-called GDS Spring perhaps?

NB: Disclosure – author was a guest of SITA, which supplied travel/accommodation during the event.

NB2: Disclosure – author is acting CTO of Lute Technologies, a partner of Farelogix and member of the OpenAXIS standards group adopted by IATA for NDC.

NB3: Happy pilots image via Shutterstock.

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Timothy O'Neil-Dunne

About the Writer :: Timothy O'Neil-Dunne

Timothy O'Neil-Dunne is the managing partner for venture firm VaultPAD Ventures– an accelerator devoted exclusively to Aviation Travel and Tourism.

VaultPAD also is the parent company for consulting firm, T2Impact. Timothy has been with tnooz since the beginning, writing in particular aviation, technology, startups and innovation.

One of the first companies to emerge from the accelerator is Air Black Box. a cloud-based software company providing airline connectivity solutions and in production with airlines in Asia Pacific.

Timothy was a founding management team member of the Expedia team, where he headed the international and ground transportation portfolios. He also spent time with Worldspan as the international head of technology, where he managed technology services from infrastructure to product.

He is also a permanent advisor to the World Economic Forum and writes as Professor Sabena. He sits on a number of advisory and executive boards



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  1. Valyn Perini

    It’s time I weighed in on this, given how much OpenTravel’s name has been bandied about in these comments.

    IATA, like any other organization, has the right to set up any initiative it wants, and to manage its initiatives any way it wants.

    OpenTravel was invited to propose schema for IATA’s review and inclusion as the basis for its NDC initiative, and our schema was not chosen as that basis. We were not present during the evaluation, scoring or voting on the schemas under consideration, and while we’ve gotten feedback about how those functions were conducted, we can’t comment because we just weren’t there.

    A ‘standard’ can be created in many ways – bottom-up open source initiatives, top-down mandated initiatives, or initiatives like OpenTravel or IATA’s NDC, where groups of companies who own or re-sell the product determine how to best distribute that product to meet their commercial objectives.

    To call a standard ‘open’ generally assumes an inclusive and transparent process by which the standard was created. OpenTravel prides itself on its ability to build consensus and create products that are useful to ALL the links in the travel distribution supply chain because, and this is no big news, travellers don’t just buy from suppliers – they buy from agents and OTAs and other intermediaries. We recognized early on that to achieve buy-in and, more importantly, implementation, we had to meaningfully include not only suppliers but technology providers and distributors.

    Buy-in is important because standards are subject to the whim of the market just like any other product (with the exception of government-mandated standards, to which neither NDC nor OpenTravel are subject). The NDC schema will not be a required implementation, so airlines and their trading partners will be free to use whatever product they wish – NDC, OpenTravel, or some proprietary schema. It is up to IATA to build a product that the all companies in the airline industry will want to implement because it addresses the needs of all those links in the travel distribution supply chain, not just the suppliers’.

    As to how we will work with IATA on the NDC initiative – that is to be determined. IATA approached us in May to participate in the NDC initiative, and we are in discussions with representatives as to how that might work. For the foreseeable future, we see no reason to change our direction because we continue to receive support from all segments of the travel industry.

    OpenTravel first published XML schema in 2001. Since then, we’ve had almost 100,000 downloads of the schema, and hundreds of millions of messages are exchanged every day between thousands of companies in the travel industry based on our schema structure – in every segment, in every region of the world. The market tells us we’ve created useful and compelling schema products using a process that provides meaningful access and participation for all interested parties. IATA will be subject to those same market forces as OpenTravel has been, and only time will tell if NDC is successful.

  2. David White


    Great analysis and kudos for suggesting a way to create a win-win scenario for agencies and airlines. The airlines have to find a way to get agencies on-board with the NDC given that the agency channel will remain the source of their most profitable bookings for some time to come. Commissions on ancillary services would be compelling enough to melt the opposition, bring the “mega” agencies into the fold (others will follow as they are able), and thereby accelerate the airlines’ ancillary revenue ramp. Mr. Garner of AA clearly recognizes this opportunity. One can only hope that other airlines will come to the same conclusion.


    • Timothy O'Neil-Dunne

      Thanks David,

      I think these deals will not be public for a while which doesnt help the process but I suspect they will be there soon – if not already.

      I suggest that looking at the cruise lines as an example or tours where the remuneration for the agent was based on performance or a particular type rather than a strict single fee just for being the sale channel.

      There is no easy path to success. But I remain confident that pragmatism rather then dogma will prevail.



  3. Timothy O'Neil-Dunne

    For clarity sake – I am not questioning Robert Cole’s motives. He cans say what he wants when he wants. But I think the rhetoric is (now a major) part of the problem. Not moving on is causing the industry harm. Click on this link to understand what i believe is prudence.

    if your intention is to flog the dead horse – then we are at odds with each other.

    If on the other hand you accept that – as I wrote in the first part – that its the airlines ball game and they made their decision and we should now move on and find a way to embrace change – then we are in the same side. I hope I dont have to quote Luke 11:23 and rewriting history is never a good idea.

    On the big G – I did not say I liked them. The admission of admiration is to acknowledge how they have been able to change consumer behaviour – both good and bad. That consumers in air fare shopping prefer speed to accuracy is directly down to them. That the flawed infrastructure at the back enabled that to happen – has been an industry problem for a very long time. (Oh yes and airlines are not the only guilty parties here). That we have to live the consequences is now our problem whether we like it or not.

    And my favourite Lincoln quote?

    “How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn’t make it a leg.”



    • John Pope

      My apologies, Timothy.

      In the words of the sexiest voice to ever live:

      “I’m just a soul who’s intentions are good, oh lord, please don’t let me be misunderstood.” Is that also part of Luke 11:23?

      I, too, acknowledged Google’s canny playing of the game in my comment. And, certainly do realize you’re no Google fan boy.

      I also concur that we will all have to live within the confines of the airlines decision, unless, of course, the authorities deem it necessary to step in again. At the risk of continuing to flog Ol’ Yella, just because we all have to live with it, doesn’t mean the motives shouldn’t be questioned.

      We are, and I’d agree should, be at the mercy of the most supply owners – that’s just good ol’ fashioned capitalism – as they have the right to maximize their return on investment, as the rules state.

      But when the component is such a vital and primary link in the chain, I also think it’s right that scrutiny be that much rigorous, and regulatory bodies should be on high alert. That’s all.

      I’m also quite clear on your lack of questioning Robert’s motives, and that there is mutual respect at all times.

      As an another wise man once said:

      “The man of knowledge must be able not only to love his enemies but also to hate his friends.”

      Happy (belated) 4th of July. 😀

    • John Pope


      After reading your continued rebuttals, their reluctance to take a stand on – to my eyes – pretty obvious principles, and then wondering what really motivates your stance; I can only come to the following conclusion on the difference between us with respect to “prudence.”

      God, grant me the serenity to accept the things I cannot change,
      The courage to change the things I can,
      And the will to fight for the difference.

      Currently watching an awe inspiring version of King Arthur on “The Beeb” right now – and, unfortunately, realizing only a few brave souls have the will to do the right thing, in the face of potential tyranny and personal loss. Perhaps, that explains this sentiment.

      At least you know what motivates me.

      And, in case you’re wondering: “Yes, Timothy, there is a Santa Claus.” At least there should be in spirit.,_Virginia,_there_is_a_Santa_Claus

      All the best.

      • Timothy O'Neil-Dunne


        I have obvious motivation. It seems that I have to spell it out for you. I could also say I would question why your motivation doesn’t seem to stretch to producing something of positive substance. Principles are vitally important. But if the principles are not backed by action what use are they? About as good as comparing TV drama to real life!

        But more to my motivation. I have a long held belief that there was an is a necessity of progress based on standards. I think that throughout my career there is a lot of pointers to that fact. I have funded and/or participated in standards groups for more than 25 years. I also hold dear the fundamental belief, as I made clear in both parts of this article, that it is the airlines’ position to take as they see fit and also to choose what they do and how they do it. Tempering that to practicality and making it achievable is another clear motivation. These are entirely consistent with my principles.

        That has nothing to do with the principles of best/right or worst/wrong. One could fault a lot of people’s motivations. But in my view harping on that is counter productive. It has to do with what works. The serenity prayer you quote is a sound basis.

        Undoing NDC is not in my opinion an option. I would argue that you have not considered the obvious consequences of the “do over”. So I cannot accept the revisionist point of view that both you and Robert are appearing to adopt. It seems further that you are targeting a stark and binary view of right and wrong rather than embracing a common ground approach that I am advocating. Read both articles again together. If you disagree with the position I am taking still then that is your right.

        For clarity sake – I am not just being an arm chair pundit. I am putting my money and efforts into supporting the principles of change. And boy the whole industry needs it. As noted in the article’s footnotes I am a direct participant in LUTE Technologies which licensed the Farelogix platform and daily produces a fair number of tickets for a number of airlines in many markets. I was also an active participant in the OpenAxis Group and now I am joining the DDX process to address bridging the gaps that exist. Through VaultPAD I further am trying to bring fresh blood and great ideas into the sector.

        Two wrongs never made a right. But the airlines as a class evidently had issues with the way OpenTravel was going and their participation in it. Re-writing history because of bad decisions or (as is usually the case drifted lack of interest) is counterproductive. Rather than dwell on our sordid past – I am focused on trying to find a solution forward. The core of the argument for/against NDC from the traditional point of view seems to be the economics. Attacking the process is downright silly. So I am proposing a solution. Thus far I have not seen ANYONE else even attempt at addressing that question of a financial model. That there needs to be change in the way airline products are distributed via the neutral channel is patently obvious. Participating in that change process is something I hope that the broader community accepts is required. I hope that IATA does work much harder to embrace the broader community. It clearly has not been successful thus far in those efforts.

        OpenTravel is a good organization. Not without its flaws but it has noble principles. It is constrained as any organization is by certain barriers. IATA ditto. etc etc. Commercial organizations have flaws. Humans have flaws. That IATA and OpenTravel are getting closer is for me a very positive sign. They have the opportunity and I hope the will to align themselves.

        So all I am asking is that the smart people in the room can figure out how to make change happen. The consequences of that not happening are not pleasant. We don’t have to agree – as clearly we don’t on this so called principles point. Again I exhort you to support the principle of “change is good” and focus on the forward thinking not the reward mirror pontificating.



  4. Timothy O'Neil-Dunne

    Thanks John.

    Not that I want to spoil anyone’s 4th celebrations. This is hardly founding father’s stuff. But it is an important issue which is why I had hoped these 2 posts would spark the kind of debate that can be productive.

    While I am no lover of totalitarianism – one must admire the way the Googleplex operates. They have changed consumer behaviour. And the will continue to mold that behaviour to suit their ends. Good or bad it is not really the issue.

    The simple facts are that the battle between supplier and intermediary by what ever channel is not the right one. All of us irrespective of our positions in the food chain owe an allegiance only to one master – the customer. Google has learned to harness that. Should we not do so too? Is that not one of the grander goals of NDC.

    I hope that by shining a light onto the simple elements of the respective sides of this argument will cause people to consider if there is a way forward.

    My point in responding to Robert is that his argument is the wrong one. He should not be trying to re-write history. Instead I think he should focus his attention and not inconsiderable talent at working to find a way forward for all concerned.

    Sometimes its best to say suck it up and let’s get on with fixing what is broken not arguing about the size of the wheel. OpenTravel and IATA should be working together for the cross industry benefit. I think their interests are aligned. Now we have an opportunity to see that alignment result in benefit for all.

    If this dialogue and discussion ends up in pointing fingers then I have clearly failed. I hope you (and the smart readers of TNooz) wont let that happen!!!


    • John Pope


      I don’t think there’s any doubt that Robert’s intentions and, as you coined, “finger pointing” are anything but honorable and primarily lie on the side of consumers, along with the health of the overall travel industry ecosystem, as a whole. There really should be no denying that – by anyone, even your wise and noble self.

      It’s also very hard to argue that there isn’t “something rotten in the state of Denmark” regarding the decision to choose and adopt the Open Axis / ATPCO schema over the Open Travel Alliance schema. For me, and my cynical-less-learned view, that definitely smells a rat – for what other possible reason, other than control, ownership, politics and greed was that decision made? It certainly doesn’t sound like merit.

      I agree, we should ultimately move on in a positive direction, but that still doesn’t mean the real motives, to what it is an extremely important travel industry topic, shouldn’t be questioned, and have no stone left unturned.

      Is it not reasonable to challenge decisions when there is even the smallest whiff of the system or process being rigged? Everybody, all the time, should be accountable for their actions, especially when the stakes are as high as they are – did I hear you say $7 Billion with a “B” ? To me, that’s the essence of what leaders in any field should demand of themselves, let alone what the people most affected by the outcome should think – its what democracies, the spirit of fairness, and having principles is all about. Do you not agree?

      Failure to question authority – any form of authority – inevitably leads to tyranny; exactly how Robert described it in his comment and original blog post several weeks ago.

      As far as your statement – “While I am no lover of totalitarianism – one must admire the way the Googleplex operates.” – first off, I honestly never thought I’d hear you say that, however, I agree as well. In some ways, you have to admire what Google have been able to accomplish thus far, no matter how diabolical, tyrannical and monopolistic one may think they act.

      For the record, I’m still on the fence with my opinion on Google. Just kidding… I can’t wait for the day, in the very near future, we go toe to toe with the Mountainview Monstrosity. 😀 It will be epic, I assure you.

      As much as I’d hate to admit it, Google has absolutely changed consumer behavior, but let’s not be fooled to think that that behavior can’t be changed again. To deny that, would really be foolish and shortsighted.

      Finally, not to spoil the spirit of Independence Day – in fact to enhance its spirit – I’ll leave you with a quote from one of the greatest leaders America has ever had:

      “The best way to predict your future, is to create it.” Abraham Lincoln

      Hi ho, hi ho… off to work I go. 😉

  5. Timothy O'Neil-Dunne


    Thanks for your missive on the topic. I think the question of whether or not the OpenAxis standard was more appropriate than the OpenTravel one is one for a debate that could last a long time. But I cannot speak to the merits of the decision making process.

    I did evaluate the two standards and in my view they both had their strengths and their weaknesses. All I can say is that from my perspective there was – and in my view still is – enough commonality that could bring the two together. I am hopeful that this effort is indeed under way by the respective organizations and therefore the basis of your argument might evaporate. Actually I sincerely hope so. IE rather than railing against the machine – look for a rational way forward.

    Insanity is still possible. It never ceases to amaze me that defeat can be plucked from the jaws of victory. So I hope that all the stakeholders will consider carefully the hypothesis I have proposed here which if adopted could lead to a win for all concerned. Not least of which is the consumer.

    However hold fire until you read my next piece which will be a look at how different interest groups see the future.

    I do hope that this 2 parter has stimulated thought and a way forward. If not then the dire consequences you paint maybe the defeat I fear. And frankly there is only one winner in that battle. It isn’t the airlines nor the GDSs. And the consumer will be the biggest loser.



    • John Pope

      Interesting read, Timothy, as always.

      May i ask that you be more transparent or literal on the speculated “only one winner in that battle” – i.e. do tell who this International (Search Engine) Corporation of Mystery may be?

      I suspect, even you have to admit that Robert’s analysis and conclusions/speculations are on fairly solid ground – no?

      You’ve just raised, for the global Tnooz audience, what may very well be the most important issue facing – at least for the foreseeable future – the entire travel industry. In other words, now that the box has been opened, what do you think Pandora will have to show us?

      This party’s just warming up… I can feel it. 😉

    • RobertKCole


      I never judged the OpenTravel spec to be superior to the Open Axis spec – IATA did their own evaluation and then elected to utilize the losing spec.

      That would appear to be a sub-optimal decision for the airline industry and any group that needs to exchange information with the airline industry.

      The simple solution would have been for the airline industry to contribute input into the OpenTravel specification regarding ancillary services and merchandising processes and use cases – similar to the way airlines contributed to the original OpenTravel spec.

      But the open standards process does not allow for unilateral airline control over the data structure and information. Sadly, it is that unilateral control over a standard that is required for the airline industry to dictate the terms for future distribution and compensation models to others.

      That would also appear to be a sub-optimal decision for the travel industry.

      US DOT Resolution 787 makes the closed IATA NDC standard law. No entity is required to adopt IATA NDC, but one must also conclude that it is unlikely that any enhanced capabilities will be made available to an entity not adopting IATA NDC.

      In the future, will the development of innovative capabilities that empower consumers or intermediaries to improve transparency, reduce costs, enhance efficiency or disrupt the status quo be pursued within IATA NDC?

      How will the airlines prioritize such initiatives against other capabilities that improve airline margins, create barriers to entry and maintain market share?

      It is naive to expect the airline industry to behave in any manner other than in its own self interest. Control of a closed information processing standard helps an organization better defend their interests and protect against disruption from external parties.

      That too would appear to be a sub-optimal decision for the travel industry.

      I wholly agree that the travel industry now needs to work with the cards that they have been dealt.

      The sole motive behind my commentary is to provide some insight into the fact that all those cards are not coming off the top of the deck.

      My recommendation for moving forward, similar to yours TImothy, is for compromise.

      However, it is for the airline industry to work within the open standards framework of the global travel industry (OpenTravel) as opposed to have the travel industry work within the newly defined closed standards of the airline industry.

      For that compromise to occur, DOT Resolution 787, in its present form, should not be ratified.

      That would clearly appear to be the most logical and optimal decision for the travel industry.

      • Timothy O'Neil-Dunne


        I dont think that pulling the DoT submission serves the purpose that you seek. I have commented before that I do not believe that the DoT has any jurisdiction in the matter. But that is not for me or anyone else to determine only the DoT can rule accordingly.

        I have filed comments formally with the DoT along those lines – so I believe I am consistent here in that the message sets should change.

        You seem to persist in making 2 points which I struggle to find acceptable. Your first point is that the IATA decision making was flawed. It was theirs to make as you said so there is no point in debating that issue. Then you challenge that the airlines must conform to the rest of the travel industry. that in of itself is disingenuous to all sides. Yet you agree that compromise is the way forward.

        This piece is not about rehashing the past. It is focused on finding a way to the future. If you find that hard to accept then go ahead – continue with the position you seem to be adopting which is revisionist. But if you are serious about promoting change through compromise – then put your money where your mouth is and work through both OpenTravel and with IATA to get to a compromise place. I for one intend following that path – and hope that others will too. Staying away only hurts the whole industry.

        Undoing what is done would put the whole process back years and not achieve a positive outcome. That said the challenges that the NDC process faces are legion. I will again appeal for all sectors to come and support it and have your input into the process. If IATA is serious about working with the Industry then they will welcome it.



        • RobertKCole


          While you suggest that the US Department of Transportation has no jurisdiction in this matter, why would IATA submit Resolution 787 to the body for ratification?

          Considering that the US DOT oversaw the CRS rules governing GDS distribution policies and processes for over two decades, I would submit that DOT ratification of Resolution 787 plays a significant role in establishing the legitimacy of IATA NDC as the new standard for the airline industry, while structurally delegitimizing the OpenTravel specification as an option.

          While utilization of Resolution 787 is not mandatory, quoting the document (Application For Approval of an Agreement (Resolution 787) by The International Air Transport Association Dated March 11, 2013) there are three strict conditions on groups seeking to exchange enhanced content through direct or indirect channels:

          a) “IATA seeks DOT’s approval of Conference Resolution 787 only insofar as it describes a means to modernize distribution communications technology with a new XML standard.” (page 2)

          b) “[IATA NDC] sets the broad parameters of what communications capabilities the industry requires should participants in the distribution system pursue new approaches.” (page 7)

          c) “If an airline chooses to distribute enhanced content through both direct and indirect channels, it is expected to work within the data formats to be developed pursuant to the Resolution in order to achieve the intended standardization and efficiencies.” (page 7)

          These points, if resolved by the DOT, become a binding legal rule for every airline choosing to distribute enhanced content. This mandate also represents a considerable departure from any existing OpenTravel specification where adoption is voluntary.

          Having been personally involved in the development of the HEDNA descriptive content standards, the Hospitality Industry Technology Integration Standards (HITIS) initiative and a member of the founding OpenTravel Alliance Interoperability Committee and Car Rental Working Group, I have a good perspective on creating successful open standards.

          The IATA decision was clearly a bad decision. By selecting the lower scoring Open Axis schema that was developed independently from the well established, higher scoring and cross-industry interoperable OpenTravel specification, IATA has introduced unnecessary complexity and conflict among travel industry standards.

          For example, let’s assume that IATA NDC moves forward with its closed standard that is independent from the open OpenTravel standards supported by the remainder of the travel industry. Exactly what mechanism must be established to ensure interoperability between the closed and open standards? Is a new inter-standard translation process required?

          IATA NDC does not have a process to resolve such conflicts, where OpenTravel does; it was designed to support cross-industry interoperability.

          Further, what becomes of the OpenTravel spec for airline messaging? Does it atrophy over time and eventually cease to exist? As other aspects of the OpenTravel standards evolve for other areas within the travel industry, is a airline impact matrix required for submission to IATA NDC for continual approval?

          OpenTravel’s airline schema and message sets cannot simply be replaced by the closed IATA NDC without violating the OpenTravel policies and processes necessary to maintain an open industry standard.

          My points have nothing to do with rehashing the path. My concerns are forward looking – how to deal with new layers of politically fueled decision making, a forking of standards that jeopardizes industry interoperability, and a lack of process to resolve anomalies between overlapping closed and open standards.

          I have never intimated that the industry should move backwards – it clearly needs to move forward. The path has just become unnecessarily much more complex.

          Through its politically based decision, IATA has made its bed. Unfortunately, it appears that the rest of the travel industry is now being told it needs to lie in it.

          IATA made a unilateral decision to exclude OpenTravel from NDC. OpenTravel is in no position to compromise as it has no standing or relationship with the process – it is not even mentioned in Resolution 787.

          If there is to be compromise, it can only come from IATA, as you have repeatedly noted, since they hold all the power. Compromise on the part of the travel industry is nothing more than IATA invoking its will.

          • Timothy O'Neil-Dunne

            It seems we cannot agree on the basic points. I cannot seem to persuade you that the decision about NDC is done. That we need to move forward.

            I can see no underlying reason for having DoT approve 787. There are some considerations but that is not for us to decide.

            The issue therefore remains a way forward. You have stated categorically that IATA must change. I dont think that is a reasonable opening position. I believe that the boundaries of where IATA has jurisdiction and where it doesn’t are pretty well defined. I would even add a point that IATA does not speak to the more than 25% of the world’s air lift that is not represented in IATA.

            I see the way forward in common ground especially in the following major areas:

            1. Personalization
            2. Merchandising
            3. Customer File Management (aka PNR)
            4. Financial Fulfillment
            5. Bundling and multi-product servicing.

            There are more but these are the major areas.

            That is where joint collaboration can and should take place. IATA has no jurisdiction over (say) HTNG. Nor should it. And vice versa.

            Opportunities for collaboration exist despite your somewhat jaundiced view.

            i hope that you will place faith in individual’s and organization’s abilities to get beyond that.



  6. RobertKCole

    Timothy, you are quite correct that the concept of the IATA NDC initiative is very good. I would suggest however, that the execution thus far has been abominable.

    A fundamental question is: Exactly why the OpenTravel Alliance schema was deemed unusable by the IATA Passenger Distribution Group who voted to adopt the Open Axis / ATPCO / Farelogix schema instead?

    Your point in Part 1 of this series – that the reasons for and against the change being “not qualitative nor are they in any particular order” speak directly to the root of the problem. Highly impactful decisions like these should be based on a thorough evaluation of the positives and negatives associated with either option.

    For example, a good approach might be scoring each schema against a specific set of criteria.

    My research indicates that IATA evaluated the two schemas based on 73 factors defined by the IATA group itself. The result of that evaluation was an overall score of 96% for OpenTravel to 48% for Open Axis. On the critically important sub-categorization of merchandising messages, the score was 100% for OpenTravel versus 56% for Open Axis.

    The question that remains unanswered is what additional, non technological factors steered the decision to adopt Open Axis, despite its being outscored by a ratio of 2:1?

    I published an extensive blog post on the topic a month ago –, which I understand has been widely discussed within the airline community. Interestingly, there has not been any feedback disputing the facts as presented.

    My conclusion was that IATA’s decision, instead of being based on an unbiased evaluation of the technology, was largely influenced by airline industry politics. It came down to a single element: Control.

    The OpenTravel schema and standards process fully addressed the other issues of Capability, Change and Economics – with the one major caveat.

    The group in “Control” of the specification is able to invoke its will over the capability, change and economics of others inhabiting the ecosystem.

    I have seen travel industry innovation choked off by the airline industry through omnipotent control over the Global Distribution Systems that were created by the same airlines that supported the adoption of the Farelogix schema for IATA’s NDC initiative.

    To me, a complete outsider to the process, the overriding factor in the decision appeared to be absolute control over the full specification, and as a result, ultimate control over the information managed by the specification.

    Many of those wrongs may now be considered ancient history, but more recent history shows the airline industry turning its back on the open and highly collaborative OpenTravel Alliance schema – arguably the foundation for the vast majority of travel industry innovation and cost reduction over the past decade.

    I find your two specific assertions that “In my opinion, the guy who owns the inventory and the guy with the most economic power wins. As far as I can see, the airlines have already won this battle” and “Bottom line – control of inventory rests with the airlines and they run the show. They can do anything they like” outrageously disturbing.

    Apparently, as illustrated by the IATA NDC decision making process, your suggestion that the airline industry can do anything it likes, appears wildly accurate. This also provides an excellent summation why the United States Department of Transportation should kill Resolution 787 as proposed by IATA.

    Timothy, adoption of an inferior technical specification within a legal framework that provides unilateral control is a recipe for tyranny.

    IATA NDC does not just mandate victory of the airlines over the GDS, but structurally makes the airline industry the “winner” over all other travel-related verticals whenever an airline segment is included in a traveler’s itinerary.

    While one can suggest any number of business models or compensation schemes, as you so eloquently explain, having won the war, the airlines can do anything they want. The airlines will also understandably choose put their own self interest ahead of all others involved in the travel industry, including the passengers themselves.

    I see very good reason for the global travel industry to be highly concerned by the adoption of what appears to be a comparatively inferior messaging specification within an environment that provides full control over the processing of traveler information to one group of suppliers.

    The travel industry deserves better. It is too large an industry that impacts too many people to have dominant control sitting with a few airlines.

    The definition of insanity is repeating a process and expecting a different outcome. Decades ago, governments had to step in to establish GDS rules to protect consumers and the rest of the airline industry from behaviors deemed to be anti-competitive.

    The positive and beneficial concept of expanding capability, embracing change and improving travel industry economics were the foundational concepts behind the establishment of the OpenTravel Alliance in 1999. The structure also prevented a particular group from gaining control over distribution channels to the detriment of others in that vertical or the industry as a whole.

    The current structure and implementation of IATA’s New Distribution Capability, in combination with proposed United States Department of Transportation Resolution 787, as currently drafted, structurally undermines the ability of the travel industry to innovate.

    Innovation, through evolution or revolution, by definition involve disruption. If the airlines have all the power, they will logically behave in a manner that will prevent a loss of that power. As a result, innovation borne outside of airline control that does not benefit the airlines will be discouraged – just like it was when the GDS were controlled by the airlines.

    If the airlines (and now IATA) were sincere about working with the travel industry, the Open Axis initiative would have never been launched. The failed Open Axis platform would not have been purchased by ATPCO and then subsequently adopted by IATA.

    The airline industry talking about peace & collaboration with the larger travel industry, at this stage. rings wholly disingenuous. If the the airlines had continued to work with the OpenTravel Alliance, there would be much better reason to believe that they shared the noble intentions of enhancing capability, managing change and improving economics – without the risk of dominating control.

    Instead, this is looking a lot like insanity.


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