Today Amadeus said that United Airlines is the first carrier in North America to adopt the company’s new XML-based ancillary sales service. It is the first such service to be compliant with new communications standards approved by US officials in August.
Amadeus’s Airline Solutions‘ new XML feed will make the carrier’s Economy Plus seat upgrades available to travel agencies in the US, Puerto Rico, and the Virgin Islands, during the initial booking or after a ticket has been issued.
It may seem like a mundane and technical announcement to people outside of the trade. But for insiders, it is hugely symbolic.
It represents a major about-face by Amadeus. The technology giant is getting out in front of the industry by adopting new communications standards — at least in their version 1.0-format — that it has resisted for years.
More broadly, the move anticipates a major expenditure in the travel industry on a new technology, because other airlines and other intermediaries are likely to follow suit.
The backstory
The news comes at the end of a years-long battle by major airlines to prod the industry to adopt a modern communications standard to sell tickets and ancillaries through travel agencies.
This past August the airlines marked a victory when US officials finally approved the founding documents of the effort.
Today United becomes the first US airline to put into service those standards, called the New Distribution Capability, or NDC for short.
Airlines cooked up the NDC initiative out of frustration with the middlemen in the distribution process — the three global distribution systems (GDSs), namely Amadeus, Sabre, and Travelport.
Airlines had several gripes with the GDSs. But their most urgent complaint was that they felt the GDSs did a poor job of selling ancillaries, such as seat upgrades. In recent years, ancillary sales have exploded as a huge source of revenue for the airlines.
Airlines mounted pressure on the GDSs, but the GDSs resisted the expense the upgrade would entail.
For instance, today none of the three major GDSs sell Air New Zealand’s Economy SkyCouch — three seats for the price of two, to allow passengers to lie flat during flight — even though that product debuted in spring 2011.
The first airline effort to push for change was the Open AXIS project, a non-profit project by airlines, intermediaries and technology companies to come up with new standards. For example, United and Continental, its merger partner, were founding members in 2010.
None of the GDSs joined Open AXIS, and none of them would support its early standards.
Amadeus continued to voice its reservations about the initiative in multiple forums, even after the proposal was officially endorsed by the International Air Transport Association in autumn 2012.
But by winter 2013, Amadeus began to express qualified support for some aspects of the overall project to adopt XML-based standards.
It also began to send more representatives to industry discussions about the initiatives than either of the other two GDSs, according to sources — suggesting a deepening interest.
The subtlety here is that Amadeus is a large organization, made up of multiple minds.
Amadeus’s GDS arm appeared to be vocally opposed to all NDC-style initiatives, while its airline services side seemed to be very active behind the scenes in wanting to support NDC-style technological standards.
What’s new
Amadeus’ Airline Ancillary Services Solution says it is the first tool to adopt XML (version 1.0) connectivity in the travel agency channel in North America.
Amadeus says 22 other airlines worldwide, such as Air France and Etihad, are distributing ancillaries through the travel agency channel via its Ancillary Services Solution (though not yet via NDC 1.0-compliant XML feeds).
Dozens of other airlines have signed up to use the solution for direct or indirect sales.
To be clear, using XML is not what’s new.
Geographies aside, Amadeus has been distributing Easyjet ancillary services through XML since December 2007.
Similarly, XML has been used by technology provider Farelogix’s to power ancillary offers between Air Canada and Travelport for about four years.
What’s new is that Amadeus’s airline services side can now support select United messages from United’s PSS, HP SHARES, into Amadeus’s GDS side, via NDC standards.
Other industry players will likely copy the move. Already, other major airlines have quietly told the companies providing their PSSs that they want those hosting systems to support NDC.
To be sure, other NDC-XML initiatives are underway in the industry, but they are pilots (such as ones run by JR Technologies) or else are not in full production or officially announced; or are in the direct channel, i.e. for airlines’ websites; and may not be using the most updated version of the IATA verbs, i.e., the fully-compliant NDC version 1.0 standard.
How it works
United continues to use Farelogix merchandizing engine to create ancillary offers (the price for a seat upgrade, bag fees, etc., which all sits underneath all of United’s IT systems for its sales channels).
When United creates an ancillary offer, Farelogix’s system powers the distribution to united.com, the airline’s kiosks and mobile apps and to the GDSs.
As of now, United is no longer communicating those offers to Amadeus via the older technological standard — which it still uses to talk to rival GDSs Sabre and Travelport. It’s instead now using XML that’s based on the NDC-1.0 standard.
Victory for the airlines
Jim Young, who was a leader of the Open AXIS group back in 2010, told Tnooz:
UA and Amadeus working together demonstrates the vision that the Open Axis airline founders had for an inclusive distribution system that gives them the flexibility to merchandise ancillary products and services in a cost effective and productive way with 21st century technology standards.
Aleks Popovich, IATA Senior Vice President Financial and Distribution Services, said in a statement:
“We welcome the introduction of this NDC 1.0 solution to enhance distribution in the travel agent channel. Technology providers play an important role in moving industry standards forward and unlocking value for airlines and their passengers.
We have high expectations that by combining technology and merchandising capabilities, the Amadeus Ancillary Service Solution will play a leadership role in the evolution of airline distribution.”
