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Monday, 27 June, 2016, 10 : 00 AM [IST]

'Creating an NDC compliant reservation system is a complicated process’ - Varun Bansal, Co-Founder, Airlines Technology Pvt Ltd

In April this year, IATA awarded the IT Provider - NDC capable Level 3 certificate for its NDC Certification Program to Airlines Technology Pvt Ltd. Varun Bansal, Co-Founder, Airlines Technology Pvt Ltd, in an email interaction with P Krishna Kumar, throws light on the significance of the IATA certification, and addresses apprehensions about the NDC system.
Varun BansalQ. Airlines Technology has recently received the NDC Level 3 certification from IATA (International Air Transport Association). How significant is this achievement and what kind of head start this certification would provide you in the evolving airline distribution space in the market?
A. This is a big push and will authenticate our NDC (New Distribution Capability) journey. It validates all the work we have done till now. Now we will be approaching airlines and Online Travel Agents (OTA) for NDC aggregation and NDC-led IT service jobs. We have received keen interest and queries from airlines who want our help in either migrating or applying NDC layer on top of their existing booking systems and PSS to NDC compliant systems. This opens up a totally new market for us.

Q. There are many speculations as well as apprehensions about NDC which IATA is planning to roll out among the travel trade. Could you explain what difference would this new system bring in the way trade used to interact and deal with airlines so far?
A. NDC will enable the travel industry to transform the way air products are sold to corporations, leisure and business travellers, by addressing the industry’s current distribution limitations: product differentiation and time-to-market, access to full and rich air content and finally, transparent shopping experience. In today’s scenario, 70% of air tickets are bought through OTA platforms. Price and schedule are the only two criteria today on which a user chooses flights. With IATA’s NDC initiative, the end user will be able to buy meal, extra leg room, priority boarding, free lounge, limo pick & drop, check-in seat, etc, directly from travel agent’s portal. All these offers will transparently come directly from airlines, saving huge intermediately cost, boosting their sales revenue, and offer loads of rich content to the end-users.

Q. It is being said that there will be a virtual explosion in the number of agents with the introduction of NDC system, as any IT company can create a reservation system. Is it true?
A. I disagree. One will still need to be IATA certified and authorised travel agent to be an OTA. Being an OTA and IT vendor are two different things. Creating the NDC compliant reservation system is a complicated process than most people may perceive. There may be sudden surge of sub vendors who want to add value to the bigger systems. We are proficient in all three elements of NDC - aggregator, OTA side and communicating with airlines. We are basically a nervous system of the NDC blood flow. We are inviting people with ideas on the best usage on NDC and collaborate with us. We can help them with technology and market reach.

Q. How NDC aggregation is going to pan out in India in coming years? What kind of commercial viability you see for aggregators in the new regime?
A. India is huge market. All airlines want to have big piece of Indian travellers pie. Infact, it is our biggest strength. In our pitch to investors, we always tell them how we plan to exploit and capture Indian market. With no aggregator from India and Asia, we plan to capture a big chunk of the South Asia including China. Commercial viability is not far. Even if we undertake 100,000 transactions, our charges to airlines will be only a fraction of what they are paying to the GDS platforms. LCCs are already out of the GDS preview. Airlines can survive without GDS and we have the perfect solution for them. Not only they will save on transaction costs, but their business will grow manifold.

Q. What are your plans in terms of working out synergies with the existing travel agencies in the country?
A. We will start conducting sessions, workshops and seminars for travel agents soon. The purpose of this exercise is to create awareness and educate them on why they should adopt NDC. Once when they know why, when and how to start, we can connect them with our technology for ready solutions. However, all this will happen only with backing of IATA and similar interested parties.
 
Q. When do you think the total distribution system change to NDC will happen?
A. It all depends how different stakeholders respond and react, and how IATA handles and encourages new players like us. It also depends on the complications and legal hassles that may arise out of existing contracts. Everybody is not as brave as Lufthansa to put upfront additional booking cost on the GDS systems. We have been part of debate on how and when it will happen. The answer is it’s a long process. It may take 3-5 years. But we are witnessing positive catalyst growth.

krishna.kumar@saffronsynergies.in
 
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