Welcome to our latest initiative: a series of interviews of airline executives, to better understand how their airlines are dealing with the transition of airline distribution to an API-driven ecosystem.
Our first interview focuses on Iberia, an airline whom we feel particularly close to, since we worked together on their first NDC certification back in 2016. In this interview, Cliff Trotta, Director Sales, Distribution & Commercial Planning, and Steven Sintini, Distribution Futures Manager, tell us about their journey with NDC, and what lies ahead when it comes to their airline’s distribution API.
Hey Cliff, can you tell us why Iberia chose to embark on the NDC journey early on?
Cliff Trotta: we started distributing our content via the NDC technology primarily to simplify the presently fragmented distribution processes, to give us greater speed to market in developing new products, and to reduce our distribution costs by encouraging emergence of alternative distribution models.
All around us we see how technology is driving behavioural changes in the purchasing experience. The growing expectation from customers is to have technological solutions at hand that empowers them to have transparent and simple to navigate services at their fingertips.
The goal to lower our distribution cost at a level at par with modern technology is commensurate to the level of NDC bookings we fulfil. Clearly, the immediate cost impact on our old legacy EDIFACT technology channels has been steep due to changes in our commercial relationship with the GDS and we have therefore also launched a parallel cost recovery mechanism on less efficient and costly channels. But in turn this is also generating a first form of content differentiation that is helping us propel NDC growth.
Can you share how many tickets per month come from your NDC API today?
Cliff Trotta: we are now fulfilling thousands of bookings per day with NDC. I am very pleased with the growing volume that NDC contributes to Iberia and we look forward to meeting the IATA Leaderboard initiative of having 20% of our indirect volume in NDC by 2020.
We now serve over 600 agencies with a very balanced mix of direct connections and connections via one of our 14 aggregators and in the future, new flight sellers and marketplace players which our friends at flyiin will power and support with their Airline DirectConnect Platform.
Steven, how would you explain such performance?
Steven Sintini: technological and procedural changes have often been perceived as worrisome by the travel agent community, but we tried to overcome this initial distrust offering multiple ways to connect (direct API integration, connection through an aggregator or use of the IAG Booking Portal) and a very personalized approach to the on-boarding procedures.
We often go talk to the agencies in person, trying to advise them on the best way to connect to our NDC offering and listen to their needs, gathering useful information to feed back to our development teams.
We also saw a big increase in the use of our NDC channel when we started taking advantage of the flexibility it gives us in adding disruptive new products and fares, such as the additional price points, which are not available through legacy distribution.
What are the next steps in your NDC API journey?
Steven Sintini: Iberia has been focusing especially on leisure travel at first, one of our most relevant sectors, but 2019 will be the year of corporate travel for us.
To enable our NDC channel for Travel Management Companies and Online Booking Tools, we have focused our development roadmap on the delivery of NDC v17.2, on the certification of IATA NDC Level 4, on the introduction of new forms of payment, on the integration of Frequent Flyer capabilities, on the identification of the CorporateSender and on the use of private corporate fares.
In parallel we are also working on the introduction of more advanced servicing capabilities, which will benefit all our partners.
Cliff, to conclude, which are in your opinion the main barriers to the transition to an API-based distribution ecosystem?
Cliff Trotta: we have encountered technical difficulties, in general, stemming from the fact that we need to maintain the two technologies, EDIFACT and NDC, in parallel and for the foreseeable future. For example, this requires that we maintain two shopping engines or two order management systems for all customer touch points.
Other difficulties with agencies arose as some travel agencies mid- and back-office systems are also very heavily and historically dependent on GDS. New entrants and aggregators offering NDC upfront shopping and booking capabilities are abundant. In the case of areas such as the agencies internal back office reporting capabilities, aggregators have now started to cover those areas, which should progressively lift the difficulties encountered for a wider implementation of NDC.
Technological aspects aside, travel agencies are also dependent on the contributions they receive from the GDS for use of their technology.