NDC’s “Unknown Unknowns” Hamper Acceptance

Borrowing a phrase from former Defense Secretary Donald Rumsfeld, a speaker at IATA’s World Passenger Symposium in Dublin cited the “unknown unknowns” as the biggest obstacle to acceptance, and ultimately adoption, of IATA’s New Distribution Capability (NDC).

Anne Coughlan, professor of marketing at Northwestern University’s Kellogg School of Management, said, “If you don’t know what you don’t know, you can’t lift the veil on it, and you’ll have trouble getting partners to run with you.”

Meanwhile, the “known unknowns” are significant, she said.

“How big is the pie, and how much will it cost to get it?” she asked.

A “loveless triangle”
Coughlan spoke on a panel titled “Airline Product Differentiation: New Distribution Capability and the Loveless Triangle,” a reference to the airline/travel agent/GDS relationship.

During the session, moderator Gary Doernhoefer, a former IATA general counsel turned consultant, sought to find common ground among the representatives of all the parties who will play a role in NDC’s future.

Fergal Kelly, vice president of global technology solutions and services at Travelport, said that marrying up the two sides of every travel transaction – “how people want to sell and how people want to buy” – requires a level of trust.

“We need a much greater understanding of the value that various people bring to the dialogue,” he said.

“Even before you begin the technical work, you must address the issue of trust and the common vision. We don’t know the size of the overall benefit of NDC, so it requires a leap of faith.”

Uncomfortable changes
Doernhoefer acknowledged that NDC’s introduction did not inspire trust.

Any change makes some people uncomfortable, he said.

When airlines began talking about changing the way they sell their products and services, travel agents were caught in the middle of a drama involving “high-stakes litigation” and “the usual mercenary spokesmen,” Doernhoefer said.

“Then IATA entered the fray like conquering heroes,” he added. “They were met with less than widespread enthusiasm.”

But emotions have cooled since then, according to Doernhoefer.

What’s in it for the agent
The question now is, “What’s in it for the travel agent to sell this stuff?” he asked.

“Agents will sell anything, but they have to have the ability to do it and understand why they should do it. We will have to have a discussion of the risks and rewards.”

Jayson Westbury, chief executive officer of the Australian Federation of Travel Agents, said agents want to have access to the rich content promised by NDC. He’s concerned that “the world will have moved on by the time we get it.”

Get on with it
The industry “should just get on with it,” said Westbury. “We have to find a way to get this party started.”

Jens Ritterhoff, director of distribution strategy and cost for Lufthansa, agreed that the pace of change is too slow.

“We need more rapid development,” he said. “If we underestimate the pace of change, someone else will pop up and do a fabulous job of it.”