NDC Exchange expected to gain momentum

OXON HILL, Md. — A year into its incarnation, NDC Exchange,
the airline product marketplace, is just beginning to attract participating
airlines and travel agencies. But exchange co-founder ATPCO, the airline-owned
corporation that collects and distributes fare data, predicted that growth
would come quickly during the exchange’s second year. 

“We have a very robust pipeline,” ATPCO product
manager Bryan Trauger said on the sidelines of the ARC Travel Connect
conference near Washington earlier this month. 

NDC Exchange, which ATPCO and the aviation IT firm SITA
established in October 2017, is a marketplace for sales of airline products
supported by IATA’s New Distribution Capability (NDC). It’s also designed to be
a marketplace that centralizes direct connections between airlines and travel
agencies. Should NDC Exchange reach critical mass, it would spare travel
agencies the expense of developing direct connections for each airline they
wish to work with outside the GDS channel.

The marketplace does not offer aggregate itinerary searches
like the GDSs do, so it cannot be used for comparison shopping. But it is
especially useful in facilitating purchases of ancillary products, such as
baggage fees and bundled fares, through the agent channel. Ancillaries still
remain largely unavailable through the GDSs. 

For 10 months after the official launch of NDC Exchange, the
marketplace sat dormant while SITA and ATPCO ironed out technological kinks and
readied it to support anticipated demand, Trauger said. 

Mark Kosikowski, Air Canada’s manager of commercial
distribution, said that in August, the airline became the first to go live on
the exchange, selling its full line of ancillary offerings, just as it does on
its website. 

British Airways has since gone live, and Delta, United,
Latam and Finnair have each committed to joining the exchange. Those four
airlines are working on implementations with a goal of going live in the next
couple of months, according to Trauger. 

On the seller side, seven companies have deployed with NDC
Exchange or are in the final stages of deployment. They’re led by the European
metasearch site Skyscanner, which will provide facilitated bookings for Air
Canada through the exchange.

Also connected or connecting to the marketplace are
corporate and online booking tool companies Serko, Atriis, Verteil and
Innfinity as well as Voyages Encore Travel and the commerce platform developer
Kognitiv. 

In addition, Trauger said NDC Exchange is in talks with 71
more companies on both the buying and selling side. 

With such a small number of companies in the exchange thus
far, transactions have been limited. But Kosikowski said that Air Canada has
experienced early success with the sales it conducted via the marketplace. 

“We know that our partners are going to work in
conjunction with us to recognize the benefit of presenting the full breadth of
Air Canada products to customers,” he said. “We are very happy with
where we are at today, and we anticipate lots of movement in the coming months.”

Growth of NDC Exchange could quicken as airlines themselves
more forcefully deploy NDC to sell their full suite of ancillaries.

Thus far, 65 airlines around the world are NDC-certified,
meaning they have NDC deployment in production, according to IATA spokesman
Perry Flint. He added that the volume of NDC transactions is difficult to track
but said it is low. 

The GDSs Travelport, Amadeus and Sabre are also working to
enable NDC transactions within their channels. However, deployment is still in
its early stages. In September, for example, ARC settled $7.5 billion in
airfare sales between travel agencies and airlines but just $5.4 million in
ancillary sales. 

Bob Offutt, senior technology analyst at Phocuswright, said
he expects many more airlines to join NDC Exchange over the next 12 months, in
large part because it will keep the airlines’ program interfaces, or APIs, in
sync with NDC protocols. 

“Once it’s working, it’s kind of a no-brainer,”
Offutt said. “There’s almost no airline that would not want insulation
from changing APIs.”

 

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