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I Will Take You Through an Update on the Progress We Have Made Over the Past 2 Years and Also Provide Some Insight Into What You Should Expect for 2015

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I Will Take You Through an Update on the Progress We Have Made Over the Past 2 Years and Also Provide Some Insight Into What You Should Expect for 2015 I will take you through an update on the progress we have made over the past 2 years and also provide some insight into what you should expect for 2015. We will begin with a short video which describes what the air travel shopping experience could look like with an NDC standard in place. This is not about IATA building a system for a travel agent! This is about illustrating how a travel IT provider could use the NDC standard to create exciting and comprehensive shopping interfaces for a travel agent or online travel site. The video shows how the NDC standard can help Online Travel Agents, Business Travel Agents and also Corporate travel departments (corporate booking tools). These mock ups were designed in consultation with focus groups of travel agents and corporate buyers over the last 18 months. 1 Reminder: This is not about IATA building a system. This is about illustrating how a travel IT provider could use the NDC standard to create exciting and comprehensive shopping interfaces for a travel agent or online travel site. 2 NDC is in effect the modernization of 40-year-old data exchange standards for ticket distribution developed before the Internet was invented. IATA was created nearly 70 years ago to set industry standards that facilitate safe and efficient air travel (e.g. e-ticketing, bar coded boarding passes, common use airport kiosks, etc. In the case of NDC, once again, IATA’s role will be to deliver the standards that enable such capabilities for our industry partners so as to be able to offer the passenger the opportunity to have a consistent shopping experience, wherever they shop for travel. The approach consists of using XML (Internet) language to support the delivery of rich content in travel agency and other third party systems, such as the ability to buy additional products and services and to be recognized and receive personalized offers, or shop anonymously, as they choose, It is important to note that GDSs are already working towards making it possible for airlines to merchandize their products via travel agents in a manner more consistent with airlines’ own websites. IATA welcomes these developments. However, each GDS is working on its own proprietary solution. In contrast, NDC like all IATA standards, will be an open standard available to any and all who want to use it, including GDSs. The primary driver for NDC is the revenue opportunity. NDC will unlock value through the travel agent channel by providing it with features and content it cannot (or is difficult to access) access today. Key revenue drivers: 3 •Product attributes (differentiation): ability to show competitive features that may be unique to the offer and therefore drive purchase decision •Fare Families: displaying multiple price points, with increased value, may drive “up sells” •Ancillaries: Displaying additional products (eglounge access) may drive purchase decision The latest study carried out by IdeaWorks, suggests airline ancillary revenues are projected to leap to US$49.4 billion in 2014, up more than 15% over 2013 . NDC will provide the capability for all these features to be pushed out to the travel agent channel, which today represents up to 60% of total airline sales. Of course, there are some potential cost benefits (but once again not the main driver). Key cost drivers: •Moving from a 40-year old legacy infrastructure to an internet environment will make change much more cost effective •NDC should facilitate new entry, which should increase competition and drive down costs •NDC also provides the airline with the opportunity to consider cost reduction opportunities in the areas of ticketing, payment and revenue accounting But what are the key criteria for success? 3 To develop and ensure industry implementation of the NDC standard, there are 3 key success factors. Standard development is the core to the entire program. Airline adoption is of course the basic driver behind the program and we have seen very strong support, from testing, in the early stages of the program, to deployment, which we expect to be gradual, from 2015 and 2016 onwards. Market validation is simply travel IT providers and GDSs, travel agents and end users buying into NDC because of the benefits they see. 4 As you can see, since NDC was formally launched in October 2012, there have been some significant developments on the technology side: 1. In April 2013 we acquired the OpenAxis schemas that were to form the ‘baseline’ of the NDC schemas. Since then, the NDC 1.0 and 1.1 schemas have experienced significant evolution owing to industry input. By the way, when we talk about standards at this level of detail, we will refer to schemas which reflects the technical language a programmer would use to bring the standard to life. 2. A first set of shopping schemas was delivered for testing in 2013. Phase 1 of this pilot migrated to production in November 2013 and Hainan Airlines, with their GDS partner, Travelsky, issued the first live e-ticket based on these schemas at the end of that month. Shandong Airlines and Travelsky also deployed Shopping 1.0 during early 2014. 3. In September 2014 we published a revised set of shopping schemas 1.1 which benefitted from the 2013 testing and already have seen significantly improvement. 4. We published the first version of “end-to-end” schemas in Oct 2014, allowing any airline to test the “end-to-end” NDC vision and allowing any travel technology company to start building their road map for their next generation of NDC-based airline, agency or corporate booking solutions. These schemas are the outcome of the working of a group of 80+ experts representing 5 airlines, agents, GDSs and technology companies. This is typical of the approach to delivering an industry standard and what makes it unique. And given this level of engagement, this speed of delivery is quite remarkable As of today anyone who wants to implement NDC can do it. The full set of schemas are available at www.iata.org. 5 Prior to airlines engaging in pilots, on most occasions we carry out ’airline alignment sessions’. This does not mean the airline will adopt NDC but it means all relevant stakeholders in an airline are fully briefed on NDC and not only understand the NDC shopping components, but also are able to assess the opportunities that arise throughout the end-to-end process, such as the airline’s ability to carry out booking, payment and ticketing, for example. In the last 10 months we have delivered 30 of these sessions. 2013 Pilots with 2014 activity 1. Endeavor –American Airlines, JR Technologies (JRT), US-based consolidator: AA Preferred Seat and Main Cabin Extra not available in a non-NDC channel 2. SkyCouch –Air New Zealand, JR Technologies (JRT), US-based consolidator: Ability to easily describe the qualitative aspect of specific seat products 3. SkyDreamer –Travelsky, Hainan Airlines, CTBA (travel agency): Verify that the NDC schema can support shopping for domestic travel in China. First pilot to produce an e-ticket, for a real passenger in November 2013. Now focusing on rich content, international travel and migrating to NDC Shopping 1.1 4. Sunshine –Travelsky, China Southern, Ctrip(travel agency): Focus on basic shopping using the NDC shopping schema 5. Alpine –Swiss International Air Lines, Datalex, PROS, HP: High traffic volume (performance testing) of shopping and pricing requests, flexible date shopping / sub-second responses. It will 6 also use an agency GUI. – Now using NDC Shopping 1.1 2014 Pilots / Deployments 1. Shandong Airlines, Travelsky, Qingdao Huajun Air Service and Shandong Century Aviation: Using NDC to offer aviation insurance ancillary sold through 2 online travel agencies (OTAs) only available via NDC. Deployed to production in June 2014. 2. United Airlines –This live deployment distributes UA’s extra legroom seat product to US-based Amadeus agents using the NDC shopping schemas. Deployed to production in June 2014 and announced in August 2014. 3. Airline Profile Pilot – Air Canada, ATPCO, OAG, FareCompare: testing the implementation of an Airline Profile created by Air Canada, stored and distributed by ATPCO and used by FareCompare. 4. Heli Air Monaco – APG, Orchestra: pilot goal to create and distribute personalized offers through their web site and mobile apps, using customer profile & advanced search criteria. 5. British Airways is building a pilot to evaluate the v1.0 release of the NDC shopping schema with a travel partner. 6. Qatar Airways –in collaboration with Amadeus, this pilot will focus on showcasing the airline's premium product across all cabins to travel agents. 7. Air China –just kicked off their pilot for 2015 with an expected delivery by December 2015. Pilot details will shortly be posted on the website. A consolidated pilot report and case studies are planned for early 2015 Since 24 October when our end to end schemas were published on the website, we have had over 220 downloads from IT providers, GDSs, Agents and airlines. Details of delivered and underway pilots can be found in the IATA NDC website - http://www.iata.org/whatwedo/airline-distribution/ndc/Pages/default.aspx 6 2014 also has been a very positive year in terms of stakeholder engagement. August 2014, The US Department of Transportation Approved Resolution 787, the foundation document for NDC. This is excellent news as it validates what NDC is trying to achieve. DOT’s approval decision cited the pro-consumer attributes in what was a strong vote of confidence for the initiative. The 3 major global distribution system providers endorsed NDC at the World Passenger Symposium in San Diego, 15-17 October 2014 and committed to use the NDC XML-based standard should their airline partners ask them to, showing that NDC has become mainstream.
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