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When I want to visit friends and family in Brazil, I can book a ticket for a flight from Madrid to Rio, pay in euros, and rest assured that the whole transaction is completed in just a few minutes.
Behind the scenes, my travel agent is getting information from several airlines all at once, and each of these airlines is computing fares based on all sorts of complicated fees and taxes from different countries, each with their own rules, regulations and currencies.
It’s a truly miraculous process that requires a great deal of coordination, compatible technology, and a universally accepted standard language. It’s no wonder then, that airlines were the first commercial enterprises to use large-scale computerization, starting way back in the 1960s. Fast forward to today, and the airline industry is a now booming business serving more than 4.47 billion people.
This kind of global growth simply couldn’t have happened without a great deal of innovation, collaboration and standardization to power the industry forward.
And this, in a nutshell, is the conclusion reached by T2RL — a leading independent research and consulting company that specializes in the marketplace for airline IT systems — in its latest paper. In its analysis, T2RL offers a sweeping overview of innovation and technology in the airline industry, from its emergence in the 1960s until today.
With an eye set on the future, T2RL also highlights the great potential of NDC and ONE Order for the travel industry. Importantly, the paper sets out a call to action: this potential can only be reached if all players agree to collaborate to establish true standards.
NDC will permit airline shopping using rich data formats including graphics, sound, and video, and allow dynamic and personalized pricing in place of the filed fares that are standard today. Meanwhile, IATA’s ONE Order will streamline processes and replace the airline ticket formats that have been in use for 70 years. There is no doubt that we stand on the cusp of a new era.
However, as the T2RL paper so clearly outlines, “Standards in isolation achieve nothing. Systems and processes have to be built to use those standards.”
Companies that compete fiercely with one another in the market, including airlines, IT providers and travel agencies, must come together in working groups for the common good. It may be a long and difficult road but in the end, we can all benefit — or all suffer the consequences.
Although the biggest airlines and travel agencies may have the IT resources to build solutions out of the loosely defined standards in the IATA releases, this kind of strategy is a losing proposition in the long run — at least for travelers. Small and medium-sized airlines and travel agencies will need a clear NDC roadmap with real standardization; otherwise, they are in serious danger. This T2RL paper essentially makes the case that a true NDC standard will serve as a safeguard against further industry consolidation.
Fortunately, Amadeus is helping airlines and travel agencies succeed. The paper highlights our NDC [X] program, which amongst other things, allows travel agency interfaces to present content derived from NDC alongside content from traditional sources.
“In many other industries, the leadership position that Amadeus enjoys would mean that it could stand apart from the business of creating new agreed standards. It could simply operate the way it wanted to and let its competitors fall into line or not as they chose. However, Amadeus is deeply embedded in the airline industry that it supports… Respect for and compliance with industry standards and the development of new ones to serve the needs of the entire industry is a very high priority for the management team,” says T2RL.
On this point, I would agree. With NDC [X], Amadeus has launched an ambitious program to jumpstart the implementation of NDC so that it may be deployed at scale by both airlines and travel agencies. In doing so, transparency and openness have been essential to obtain the engagement of all our industry partners.
In order to meet our ambitious targets, we consistently invest in research and development, most recently at the level of 18% of annual revenue. In 2018 that amounted to €896 million spread across more than 50 technology centers worldwide. Over the last few years, we have also moved from mainframes to open source technologies and a cloud-based architecture that ultimately gear us to innovate more quickly and thoroughly.
But despite our innovation and technology leadership, we agree with T2RL that no one can do this alone. Travelers today expect their travel experience to be as personalized as their Netflix homepage, and as swift as an Amazon Prime delivery. If the travel industry is to succeed in this great new era of e-commerce, we must all come together to develop the standards of tomorrow.
Could each big player in the travel industry set about developing its own way to implement NDC? Yes, we could. But if we accept that true standards are an essential tool for enabling the entire travel chain to move smoothly, then it is incumbent on industry participants to support the creation, implementation, and use of agreed standards. Moreover, true industry standards fuel an ecosystem of technology providers that leverage the leadership of companies like Amadeus to bring new solutions to the whole value chain. Amadeus actively supports startups and innovators through different innovation and support programs to accelerate innovation, because this benefits us all.
NDC and ONE Order represent a new generation of technology standards for airline distribution, and they build on a long tradition of airlines working together to create standards that allow them to inter-operate to serve common travelers.
Like T2RL, we invite all players to join us at the table, to mold this new standard together, so that we can ensure this new era of travel is a success for everyone.