Is India Leading or Following in Airline Distribution ?

Damian HickeyVice President Asia Pacific and Global Strategy

CAPA India Summit 2018

Mumbai, 30-31 January

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Airline environment evolving faster now than at any point in last 20 years

Speed is crucialDigital content continues to explode. Increased penetration of cloud to handle speed and scale

PersonalisationUsing data and analytics to improve the travel experience will become essential

Seamless experienceMobile fuels consumers use of multiple channels for search and shopping -OMNI channel will be key

AutomationArtificial intelligence and robotics help drive automation and returnon trip

Managing and tailoring contentAirline websites are evolving how they sell and package their products online

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Disruption has finally arrived … and long overdue

Industrywide impact

• Airlines

• Intermediaries

• Agents and consumers

Driven by

• Customer demand

• Technology enablement

• Expectations set by other industries

Confused?

NDC

One Order

APIs

Level 3Certified

XML Schema

17.2

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What is NDC ?

What it is ….

• Open to any third party, intermediary, IT provider or non-IATA member.

• Provides more capability than is available through standards today

What it is not….

• A product or service

• A GDS by-pass

• An app, a website or a portal

What it allows….

• An improved capability for airlines to retail

• Ability to distribute new products and services to the indirect channel

NDC (New Distribution Capability) is a travel industry-supported program (NDC Program) launched by IATA for the development and market adoption

of a new, XML-based data transmission standard (NDC Standard)

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NDC certification

There are two types of IATA NDC certification – Aggregator and IT Supplier

Aggregator (NDC Certified) – Airlines that deploy an NDC API and Travel Agents and Aggregators that consume an airline NDC API can apply for the designation, for a particular or several available versions of the NDC schemas, at either Level 1, 2 or 3

Travelport is Level Three certified

IT provider (NDC Capable) – any IT providers that offer products based on the NDC standard for Airlines and Agents/Aggregators can apply for the designation, at either Level 1, 2 or 3

Travelport is Level Two certified

API distribution provides capabilities that cannot be achieved through current standards

• Control

• Improved sales capability

• Reduced reliance on PSS

• Commercial model flexibility

• Innovation

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Why is API distributionimportant to airlines?

Still Confused?

DCC

Private Channel

GDS Surcharge

NDC Incentive Program

DCF

• Airlines are experimenting based on different drivers– Economics e.g. LHG, Aegean

– Economics and technology e.g. BA/IAG

– Technology and reverse economics e.g. AA

– Yet to be announced e.g. AF/KL

• Agencies are experimenting too– Some actively involved in pilots

– Often push rather than pull

• An industry in waiting? – The new model is yet to be proven

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Early stage experimentation

• India’s traditional travel distribution infrastructure already challenged

– Rapid rise of world class low cost carriers

– Increasing dominance of Online Travel Agents (OTAs)

– Hyper-competition within strained infrastructure

– Industry record levels of growth and forecasts

– A young demanding tech savvy generation of travelers

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Already here in India ?

• Follower or Leader?

– Embrace and lead change or risk being a victim

• Requires collaboration

– Across the industry

– At a level not seen to date

• Prediction

– Fast Follower?

Travelport Confidential

What is the appetite for change?

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The Travelport Journey

Enables airlines to sell how they want to sell

Enables agents to book how they want to book

In 2014 Travelport launched

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Travelport Merchandising Suite has evolved

• The opportunity

– Provide better service and recognition for your customers

– Gain more flexibility to compete in a dynamic market

– Value add for all industry stakeholders

– Gain efficiencies - a (more) profitable industry

• The threat

– To ignore it!

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The Way Forward … Embrace the opportunity

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Change takes time

Changing current distribution infrastructure will take some years

Best Practice will see testing and experimentation before full deployment

Aggregators• Need to build API link to

multiple airlines (Content In).• Need to develop or enhance

points of sale (Content Out).• Prove the technology ROI

Airlines• Need to build API and

merchandising capability• Test speed and scale.• Re-engineering human

processes• Ensure they gain improved

results

Agents• Deploy aggregator point of

sales solution• Integrate workflow and other

systems.• Build connection to own POS

All parties need time to adjust to any commercial model changes

• Be prepared

– Engage with your partners

– Embrace the change

– Be open to experimentation

– Never lose sight of the customer

– Allow time for change and adjustment

• And… enjoy the ride!!

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Industry collaboration is key