A rapid expansion of dynamically generated airline fare offerings is in the works.
Alex Zoghlin concedes that moving the needle fast won't be easy.
At the company's annual conference, Zoghlin used the stage to announce its goal of building the technological framework for 80% of flight offers to be dynamically generated by the year 2026. About 15% of fare offers are dynamic.
Dynamic offers are those in which either the price or the ancillary options put forward in response to a flight query is changed or created.
Dynamic fares are different from the historical airline pricing system in that carriers respond to flight searches from a limited selection of fares they have already filed withATPCO.
A second fundamental shift in what U.S. flyers look for when searching for flights could be led by the widespread delivery of dynamically generated fare offerings.
Travelers used to only look at airline schedules in choosing a flight, as prices were set by the government, before deregulation in 1978. Prices and schedules have been the main factors since then.
flyers will start to look more closely at the amenities they want on their flights in a world of mostly dynamic offers. Travelers will be able to find the most appealing offerings if airlines merchandising is effective.
According to a McKinsey study, airlines could realize up to $40 billion in new value annually by the year 2030.
Zoghlin acknowledged that even though the framework for it will be created, dynamic offers won't make up 80% of all offers by the year 2020.
He said it wouldn't happen.
A variety of measures will be put in place in hopes of speeding adoption.
One will try to resolve servicing and settlement challenges associated with the sale of offers made outside the traditional fare-filing system.
Under the promised solution, carriers would be able to send such an order to ATPCO, which would transform it to be compatible with data systems. Any systems the airline uses to support refunds, reissues or passenger revenue accounting functions would receive that data.
Changes to the back-end systems of travel agencies wouldn't be needed to service such sales. Airlines would no longer have to create their own solutions to service or settle orders made from dynamically generated offers.
The director of sales and distribution for the Scotland-based automated fare-filing creator said that order posting will be a game-changer if it can be done.
He said it would lead to millions more fares.
There are more than 300 million fares in the market at any one time.
In order to create a dynamic offer, airlines and travel agencies need to take advantage of NDC technology more quickly.
Norm Rose is the senior technology and corporate market analyst at PhoCusWright.
Less than 1% of the corporate market has adopted NDC distribution technology seven years after IATA published its first NDC standard.
It's fine for individual travelers. The problem for the corporate travel market isn't solved by this.
Two efforts will be initiated in order to address NDC adoption.
The company said it would shut down the NDC Exchange as a commercial enterprise and provide the source code free of charge to the industry.
According to Zoghlin, there are approximately 50 such platforms that are currently competing in the market.
The technology that was developed for the exchange will be open to airlines and travel agencies to use.
The design group will be created by experienced NDC developers to help with implementation challenges. The inability of NDC to process net fares could be tackled by the group.
Rose still has some doubts. The airlines don't have a clear understanding of the needs of travelers.
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