Distribution And Selling Challenges: NDC To The Rescue?

Transcript

Ian Heywood:So, are we going to get Slido just taking over now and taking up my slides? Great, thank you. Question for Ian Heywood. I'm the moderator, can't answer questions. Okay, we'll see where that goes. Before I start on Slido, I was going to ask my own. So I think I've I'll start with the airline guys, and I love it that the agency person's in the middle. You go like this. I love that. Dieter, for as much as you're able to, talk to me about Etihad, what they're doing around NDC. What are your plans? What can you talk publicly about?

Dieter Westermann:All right. So first of all, thanks a lot for having the opportunity to talk at this panel about NDC and Etihad's plans. Actually, Etihad is a relatively late starter in NDC. We have had other priorities over the last few years, so we were busy with a lot of other stuff. But over the last, I would say, 1.5 years, we have now started taking it very serious. We are attending the IATA meetings now as an active member, and we're pushing NDC forward internally. That of course means that technically we still have to build the capability. We don't have it yet. We have a few options on the table which— whom we would like to start small scale, but start. And we will hopefully be able to start something already this year, second half of this year. Following that, then we will see how the other 21 airlines get along with the scale, and we will then do a little bit of, yeah, benefiting from what the others going through the pain of development that will allow us to be hopefully a bit faster also. And in the end, hopefully we overtake, but that has to be seen, of course.

Ian Heywood:But, and given you're, you know, in very much at the very central of the revenue earning capability, Do you agree with my reasons of why airlines want to go down the NDC route?

Dieter Westermann:Yeah, pretty much. I mean, for Etihad in particular, I can say we are a premium carrier. We want our premium product to be out in the shopping windows. That we can only do if the interface towards the distribution system allows me to send my content out, which the legacy interface is not. It just sends out availability by booking class, and that's pretty much that. That's what it is. So it makes my own product commodity. That's bad for an airline like Etihad that invests a lot in the product. So for us, very important to showcase the product. For us, also very important to know who wants to buy the product so that we can customize it on the fly. And as you hopefully have seen here at ATM as well, we're talking a lot about choose well. That means we believe the customer decides what to take. It's not the airline. But to be able to give the customer the option, I have to have the capability to get the options in front of the customer. And you see, does exactly that. Now, why control? Yes, we want control, but not necessarily— it's very often misunderstood between airlines want control, for example, and don't want to have the agents have control, for example. The control is not because of that reason, at least not from my point of view. The control is needed because we want to be able to have a complex product offering out in the distribution systems, which is personalized on the fly. So if I pre-distribute all my options across all different channels and they populate the offers on the fly, I can guarantee you it will never be the same, even if the question from the consumer will exactly be the same. The only way to make a consistent but complex personalized and rich content offer is if it comes to one place, and that's the reason for the control. It's not nothing else than that. If I want to guarantee a consistent offer, I have to have the answer being populated in one single place, and that's why— at least my view is— that's why airlines want control.

Ian Heywood:Fair enough. Vikas, Talk to me about Gulf Air. What are your plans?

Vikas Manra:Sure. We are, you know, as Dieter mentioned, we also are late entrant into the space, but why we are actually looking at NDC. From our perspective, we have embarked upon a journey which is a journey for a boutique airline. And as a boutique concept, it's very important that we look at customers as a centerpiece of whatever we do. And to achieve that, NDC is a perfect platform. Some of the points that you mentioned about personalization, about differentiation, these are some of the core areas that we want to focus on moving forward. Very recently, we also had the internal buy-in from the senior management for embarking upon this journey, and we are going to start some initiatives within this year to again Small steps, small baby steps towards some minor successes. But what we are not looking at is we are certainly not interested in just the certification of being an airline that can do NDC, which a lot of, you know, potential airlines have been doing. What we want to look at is build a commercial model and take the certification as a byproduct of that commercial model. So there is some amount of commercial success as well as tangible benefits that we can demonstrate to our internal stakeholders. as well as to our customers, and then engage with different partners moving on from there.

Ian Heywood:Thank you, Alan. And whilst you're answering what, you know, you, you feel about NDC and how excited you are following listening to the, the 2 airlines, if you can also answer the second question down there. As a travel agent, what benefit do I get from IATA NDC and how will it help I'll give you an overall overview as dnata Travel.

Alan William:We are in the B2C space, we are in corporates, we are in the consolidation space with around 1,800 agents dealing with us. So we have different niche customer requirements that we need to address. And overall, irrespective of the NDC and the API, the whole distribution capability needs an overhaul as such. I think that's a very good point. That's a thought process as a TMC to kind of deliver the results that our consumers are looking at from all these spaces. And this distribution platform needs to be future-proofed also for virtual reality or haptics or vision or any of those new things that are coming along. So we totally agree that the distribution platform needs to take an overhaul. We need to understand that we need to have a better platform where we can position the products that Danata itself owns also in our customer journey. Customer requirements in terms of ancillary bits also need to be done. So we get that, and we as Danata have invested a lot, and we are building this One Air platform to kind of to address these changing requirements. requirements as such. And we are on— we are an NDC Level 3 certified. We are in the NDC Integrators Forum where as a TMC we are very vocal about what is required from a TMC's perspective as much as the airlines and the aggregators are talking about this. These are things that we are heavily involved with, but my thought on this is there's a lot more work to be done. At least we are talking for the last one year. Everybody's talking, and— but there's a lot of issues from an agency perspective that need to be addressed. For us strategically, the aggregators are our best partners to work with because they understand our mid-office and back-office processes. Whenever we've been working with the airlines, it's always the front customer journey but not the back part that is being addressed. So that's the whole issue, but If I have to answer this as to where does NDC help me in making more money at the moment, yes, there are certain avenues which we also need to get into, some of the— how do we position ancillaries in front of our passengers in the Middle East? Like, for example, if he comes to buy a ticket, we sell the ticket and we ask him to go to the airline website if he wants to book those things. So those bits, Yes, and that is where the commercial discussions with an airline need to happen as to if I'm going to put this effort, if I'm going to invest into the technologies that require the ancillaries to come in, how am I compensated? So it's a very vague part of the business where we've not yet reached, but we do understand, we identify the airline's requirements, and we also agree that that's what we need to deliver in terms of the end consumer. But is it going to make me money right now? No. That's my thought process. But there's a lot of work to be done, but I'm sure it has potential for the future. That's the—

Dieter Westermann:I think that it is important that we distinguish between what initially NDC was about and what the consequences of NDC are, because What the name says, it's a distribution capability. We just wanted to enable with the standardized interface that we can communicate across its channels, rich, rich content, personalized offer, real-time. Now, once you can do that, there are 100 million questions that you ask after that. That was not in scope because these are a lot of these are commercial discussions, right? But without having a capability, you don't have to have those discussions. So I think the first step, create the capability, is the right step. What comes after that, each of the partners in this value chain have to have discussions.

Vikas Manra:Yeah.

Dieter Westermann:And that includes also distribution system, how to show and populate the offer in the right way, how to talk to distributors, how to talk to airlines, what is the right model. Every airline, every, uh, participant in that value chain may have a different view. But without capability, you don't even have to talk.

Ian Heywood:No, definitely. And that's why, you know, we talk about, you know, 2019. Yannick, who heads up the IATA program for— for IATA, heads up the NDC program for IATA, he spoke about, you know, 2018 being the year of the plumbing where all of this work is put together. I've I'm presenting to him later this week, and I've crossed him out and said 2019. That's 2018 plus 2019. This plumbing is taking a long time. There's a lot to do to, you know, the, the current capabilities are really, really good. So if you're going to put a new system in place, it's got to be able to be as good, if not even better, just to give you the capabilities. And just looking on these, I'll take the first one purely because I can say that just as Dieter answered, you know, saying we want to test this, we want to start small. And Vikas, you said the same. That's exactly where we are. There is hardly, you know, there's, there's hundreds of thousands of bookings going through IATA NDC as opposed to millions and millions and millions of them. That will grow. It will grow throughout this year as the capabilities improve. But also as, you know, people feel more confident that their system works. Airlines don't make great margins, and so they can't afford for, you know, to suffer, you know, revenue loss as they're trying new things. So it will be tried small. What you will see is a hockey stick towards the end of 2020. All of the airlines that we're talking to, and we talk to the vast majority that are on that leaderboard, are all feeling confident that they will achieve that 20%. And even if Etihad are starting slow— and I'm not going to ask Dieter this because it's not fair— but even if Etihad are starting slow in 2019, that doesn't mean they couldn't get to 20% by the end of 2020 because the building blocks will all be in place. And that's the important thing. Um, Vikas, there's a question down there about Corporates, are you— is NDC really, you know, are you attractive for using it for corporates doing your dealing differently?

Vikas Manra:Sure. You know, the— as we said, the personalization space is not just restricted to the individuals. Now corporates is a very interesting space and this is a very— a space that we are very keenly looking at starting our first trials with NDC for a very simple reason. that the needs of a corporate consumer is very different from the needs of an individual consumer. Now for the corporates, the way things are distributed today, today there is an inherent need for a corporate customer to either look at multiple solution providers or to tie up with, you know, for certain aspects of their travel. For the ticket purchase, they go to the TMC. For the ancillaries, as Alan mentioned, they have to come to an agent. airline website, but how do we actually package it all together for them? There are certain corporates who are already maturing into the RFP stage wherein they are asking the airlines that how can you bundle in the ancillaries for us, how can you create value for us, and that's a space which is a very interesting space and we are keenly looking at this space wherein we work with partners in actually providing a solution to the corporate consumers for achieving this goal together along with our TMC partners as well as with our GDS partners.

Ian Heywood:Okay, coming back to you, Alan. There's a, there's a question down there. I was, I was just looking— well, I think it was for me, so I'll just pass the buck to you. With these new capabilities, some of the agents are saying they connect direct, some airlines are trying to encourage that. I'll give you my views on that in a minute. But what's your views on direct connect or coming through your favorite— sorry, any middle distributor?

Alan William:We've tried— I wouldn't name the airline, but we have tried the direct connect part because of the reasons that you had given earlier here. And what we've seen is one of the key things that we have is the servicing agreement. issue with regard to that. And these APIs have not been developed to that level where the servicing bit can be done. Yes, we can— you can go up to the booking part, but what happens about the servicing? So that's where we've got the blocks in this road of NDC as such, and that's why we preferred the aggregator road at the moment because they understand our business. For us, we have our to manage on a day-to-day basis. As much as the airlines would love to push the API bit, and we do support that, but from a day-to-day perspective, we haven't seen that agility coming back from the airlines to address these issues in terms of servicing. That's the key part that we have, and that's the reason why we say we, we would like to look at this model in a holistic manner.

Vikas Manra:Right.

Ian Heywood:Yeah, and I think it is also their servicing. But the airlines, if they want to get into that business, they've got to get into making a real booking engine that is fit for purpose. And that's the problem as well, is the airlines haven't. So they've sort of tried to encourage the agents to come direct without knowing what the agents want.

Alan William:True.

Ian Heywood:And that's one of the re— you know, I love it when everyone says we've got to talk, we've got to collaborate, because We're only going to make it work for the whole industry if we all talk, we all collaborate. If an agent wants to go direct to an airline, great for them, but the airline needs to understand what the agent needs to make that work.

Alan William:Ian, what I'd like to add over here also, most of the airlines don't have the necessary IT infrastructure support required for an airline. When we go for it with a query of this, it does take a lot more time to address these So those are also some of the key things that airlines need to look at.

Ian Heywood:Distributors spend a lot of time on that, on that, on that support. Doesn't mean the airlines can't get there, but you've got to be prepared to invest. Um, Dieter, you're very close to ATP. I'm not sure you'd want to ask this one. Do you want to— what's gonna— where's ATP gonna be in 10 years' time from now?

Dieter Westermann:Well, ATP Co will still be there in 10 years' time. I'm 100% convinced, primarily because there will still be a lot of other airlines out there that are not fully moving over to NDC because they don't have to, they don't want to, or whatever the reason be. In, however, pure NDC environment, I have at least difficulties to believe that the current role of ATP Co should remain. in the way it is. Distributing fares is contradicting real-time personalization off and off on the fly, right? So for that purpose, I don't see NDC, uh, in an NDC environment, ATP could play, playing that role. They have to find— there is probably a role in the future for them. They just have to look what is needed new in such an environment. There are lots of open questions, right? that are not answered. How exactly set it up if it's really across the entire industry? And there's probably a place where ATP can find a role where they fulfill a value-added function in an NDC environment, but it will, from my point of view, certainly not be filing fares. That I don't see.

Ian Heywood:Thank you. And I think that's a very, very good and very fair answer to a difficult question. Vikas, let's come to you. You were talking about You're slow. Why are you slow to the game? Why aren't you out there charging from the front? Why has it taken so long?

Vikas Manra:It's taken so long for a number of reasons. As an organization, we had certain priorities to take care of. Very recently, we kind of sat together as a management team and looked at what is available out there, and the good opportunity here is that a lot of spade work has been done. So capitalizing on what all has been done so far, it's very easy to take these steps forward. We are very clear on the path that we want to embark upon, and we are very, very clear on the way we want to go. So it is just a matter of aligning with the right partners and marching on. So the hockey stick approach or the curve, that's what we want to see for ourselves very soon.

Ian Heywood:Okay. All right. Um, I've got to come to you. You've been reading that one for ages. Are you going to be obsolete?

Alan William:I still need a job for the next few years.

Ian Heywood:Do you need to go outside and sign up for the recruitment agency?

Alan William:I'll have to go and do it. I mean, the internet came in, they said an agent would go obsolete. The mobile came in, the agent would go obsolete. NDC is more about We don't want the airlines telling us sell our ancillaries in the process when we engage with our customers. So that is what is it. In all the travel journey, finally there is a bit of personalization and that value can be added only by a travel agency, even till date with all the information available on every kind of social media or whatever that kind of bit is there. So I don't think NDC will make us obsolete in any shape. We just need— we will be a little more engaged and we are actually going to deliver what the consumer needs and in fact increase our value to the end consumer. I do believe about that.

Ian Heywood:And I think as Dieter said about ATPCO, you know, the whole industry needs to evolve. Exactly. The way that revenue management is done today will not be the way it's done in the future, and the same way that agents sell and And I, just to add to that, we always believe we decide.

Dieter Westermann:I don't think the consumer will eventually decide. The market decides, not us. We just have to change to provide the market what they want. And then whoever does that will be there. Whoever does not do that could be out of business.

Ian Heywood:And I, and I, and I'm talking to a lot of airlines and I can't divulge confidential conversations that we have, but I can tell you that a lot of airlines But some of the airlines that, you know, are now talking about IATA NDC, the reason they're doing that is because they believe that the airlines that are going to use IATA NDC will be able to put a much better offer out there for the customers. And so they feel if they're not in that game, they're not playing the same way, then they will suffer. So you're right, it's the, it's the end customer. Um, Dieter, you're very much involved in Vikas, you're involved in the IATA standards, you're on the IATA working groups. Can you take this one about ticket fulfillment and explain to people what's, what's going to happen there?

Dieter Westermann:Well, as we say, these are industry standards that need to evolve over time. A few things are done, a few things are still missing, and there are quite a few discussions ongoing how to fill the gap in fulfillment and changes, what happens to resilient values, and there are lots of open questions. You mentioned interlining. So all this will evolve over time. It's a development curve. What is a bit of a challenge here is that we tend to try to replicate the old world in the new environment all the time instead of dropping things that are totally unnecessary. We think we have to repeat those, and then we have to find the schema, and we define the specific requests and queries for that. And that's the wrong approach to this. This is an opportunity to have also a major change of how an airline communicates to its consumers.

Ian Heywood:Yeah.

Dieter Westermann:Like any other industry does. They don't have the same obstacles that we have, right? We have to get rid of those. And that's the chance to do it.

Vikas Manra:So just to add, this is a process to simplify the overly complex ticketing processes that we have evolved over the period of time. You know, it's a simple transaction. Someone buys, pays, we collect the money. This is as simple as that, and we have made it overly complex with lot of jargons which were needed at some point in time. But today a consumer is asking the question, and he has— he's asking a very valid question, that why I should go through this cumbersome procedures. An agency cannot refund, go back to the airline. An airline cannot do this, go back to the agent. He is confused. So to bring simplification to this overall process, this is very, very important, critical, that as we move forward, we look at this opportunity to simplify and actually make things easy for everyone in the—

Alan William:Good.

Dieter Westermann:I would like to add one example. I always say that when I'm in public, this industry removed paper ticket. How on earth was it possible to end up with an electronic ticket instead of use that opportunity to get rid of ticket, put in the PNR or whatever, and have therefore an order and an offer or some kind of scenario?

Ian Heywood:An electronic ticket It's just a paper ticket anyway because you can still only have 4 seats.

Dieter Westermann:I, I don't get that one. Yeah, sorry.

Ian Heywood:And, and, and at some stage, uh, in maybe a year or 2 years' time, someone, uh, will be on this stage talking about IATA One Order. We won't cover that today, but that is, uh, another development that's coming, and that is very much hand in hand with NDC, and that will tackle a lot of these things. Travelport allegedly made the first booking. No, we did. So, and that was back in October with British Airways. And where are we now technically? We've got 5 airlines live. We've got 4 more airlines that we're connecting to as I sit here today. We work in a safe, agile environment. So we're into our next PI planning. We've got 4 airlines going through that. We're hoping to get 20 airlines live by the end of this year. Some of that will be down to our own responsibility that we've got the capability of doing that. We think we have. But there's also, you know, as we're talking to the airlines here, are they going to be ready for us to connect to them, etc., etc., to get to that, um, 20, because they're both on my list. Um, uh, and, uh, there's lots of limitations that are still there, either with ATPCO or with, um, IATA NDC. We're working through those. Dieter is on— spends a lot of time, I would imagine, on IATA working groups. I have people that are in my organizations working there, um, trying to make sure that this work smoothly for the whole industry now. The agencies are very much involved, and now everyone in the industry is trying to make it a success. Then there's a much higher chance of it being a success. When it was just the airlines going off at a tangent at the beginning, then that was always doomed to failure. So things are looking, looking good. How many Level 3 agents connected Directly, I don't know. I can't answer that. Not many. And the ones that are are mainly in Europe. And the reason that they are there is because the European airlines have, have imposed a lot of their sticks prior to the technology being in place. That isn't the third-party technology. It is, but it's also the airlines didn't have that technology. So they've gone to try to drive something.

Alan William:Right.

Ian Heywood:in a way, um, ahead of the gun. Um, fortunately, a lot more of the airlines are working in a much more collaborative place now. And so you will see as that happens, some airlines may still choose to connect directly to an agent, and that's, that's their choice if they feel that that is, you know, worthwhile. But the distributors connect 400, 450 different airlines to, you know, one agent. An agent does not want to do that. dnata is a very, very technically competent agent. Do you want to do that?

Alan William:No.

Ian Heywood:Oh, good. Keeps me in a job as well. So that's, that's good for both of us. So, you know, it is expensive, it does change, and there are, there are roles for different players in this industry.

Alan William:And Ian, what I'd like to add over here How many of these agents can actually afford these kind of technical enhancements that need to be done? Okay, the top 10% of the agents can really invest in technology, but what about the other 90% who are there to serve our customers?

Ian Heywood:Some of the airlines, some of the agents at the moment, and you said you went there yourself, and then for reasons you stopped connecting direct, and I understand what they are, but not for a public forum. And, and so, you know, and, and that's the point, is that you— but the reason you went there direct is because we and other distributors couldn't provide that content at the time because, you know, that technology wasn't in place. It's coming throughout, it's coming throughout this year.

Alan William:And again, with all the content coming in, we need to allow our consumers to see all the different contents of different airlines. It's not just the one. So those are different things that we need to look at.

Dieter Westermann:I think initially There was a lot of misunderstanding. You mentioned multiple times that airlines went on their own. That's perfectly fine. Everybody has their own turf. But the matter of fact is, from day one when we started talking NDC, there was always a role of an aggregator. True, from day one. So I don't think there was ever the intention that airlines believe we can connect every agent directly to each airline, that would be multi-million connections. That makes no sense, and neither technically nor commercially, nothing. So no, that was always intended to be the role of an aggregator that has rich content available.

Ian Heywood:Yeah, that— I think that's true. It just, you know, we are where we are today and we're in a much better place as an industry today. So let's— looking ahead in the next 10 years, will the current standard distribution for airlines stop to So I think that goes back to your ATP code. Do you think in 10 years you will only distribute your product via an API?

Dieter Westermann:I hope so.

Ian Heywood:I hope so.

Dieter Westermann:There are lots of obstacles to resolve, but I hope so, yes.

Vikas Manra:If the, you know, the pace of issues being resolved and the pace at which the industry is adopting the whole platform, If we continue at this pace, in the next 10 years, will it be 100% there? Not very sure, but we will be towards—

Ian Heywood:Do you want it though?

Vikas Manra:Yes.

Ian Heywood:Take Dieter. Dieter said, I hope.

Vikas Manra:Definitely, as a company which is to make investments and eventually— because NDC is not cutting across just the sales and distribution domain. NDC is something which is going to cut across the entire value chain. of the airline as a corporation itself, right from the selling shopfront to the end of the reconciliation. So if, if we have to adopt one standard, then if you adopt the NDC standard, that'll be the best way to go forward. But if you have to live with the 2 standards, that'll be an expensive proposition for the airlines to look at. But then if you go towards that, yes, the inclination is go to one standard, whatever it is, and then continue to work on that.

Ian Heywood:Expanding on why, have you looked into how you're going to revenue manage? Because the way you revenue manage your 26 fare buckets and your price points is going to be completely different on one route. Are you— I don't want to ask you anything that you're not able to answer, but so I'm going to keep it quite vague.

Vikas Manra:Sure.

Ian Heywood:Have you looked into how Etihad revenue management— you lead in revenue management— you're going to work in that environment? It's got to be very complicated.

Dieter Westermann:Yeah, well, yes, it's going to be more complicated than 5 years ago, and it is— 5 years ago was more complicated than 10 years ago, and so forth. It becomes more complicated. However, one of the main reasons why me personally and some other airlines that we were in the initial groups of IATA NDC. These airlines were revenue management people, by the way. And why was that? Because there was a lot of ideas how we can do better dynamic pricing, but we couldn't get it out. We got stuck in the distribution. So we had all these ideas and we said, what the hell are we doing now? And then we said, you know, the only way to get out of it, because it has to be a standard, is get IATA assigned a task to define a standard communication protocol to the distribution. And then we can let it all out. And we, yes, we're thinking in Etihad about how can we do dynamic bundling, prices for ancillaries, forecasting how many lounge seats we, we would have available, and these kind of things that will come. Yeah, more complicated, but from my point of view, a lot of fun.

Ian Heywood:Alan, are you excited that these 2 guys are going, hey, I want to go 100% API, or do you just want it all to die?

Alan William:The airlines need to do what they need to do, right? So I'm not going to go into that. But if I'm looking at my consumer, I'm going to work with a partner who can deliver what my consumer needs. That's the most important part that I could put across. They have their valid reasons why they want to look at it, but I need to have the best.

Ian Heywood:So talking about your consumer, it could be me.

Alan William:Yes.

Ian Heywood:It isn't, but it could. So do you know these— so on my presentation I'm saying they can differentiate their content now. They don't need to treat you the same as someone else.

Alan William:Absolutely.

Ian Heywood:So do you know what you want to go and have a chat with them about, what your customer wants? Or is that some work that you've got to do internally and with your customers to go, hey guys, I can go to Etihad, I can go to Gulf Air, and I can ask for things that they could never provide before. Now they will obviously want you to sell more of it.

Alan William:Absolutely.

Ian Heywood:It's a two-way street. But do you know what your customers want, or have you got to do that work?

Alan William:Ian, at the moment when we negotiate with airlines, it's basically on pricing and turnovers that we say, you know, I have this X customer, I go to an Etihad or a Gulf Air, here you go, this is the volumes, what are you going to give me in return for my consumer to benefit as such? Or if it's It is a B2C kind of consumer. It's more an excess baggage, blah, blah, blah. But do we go structurally? Not yet. And we believe that change in the distribution management and the kind of data that it would come out would give us more ammunition to say, I have this ex-corporate who has Wi-Fi continuously requested, so can I go to the airline and say, here you go, include this as free of cost, whatever it is.

Ian Heywood:Yeah.

Alan William:Those are— do we have that?

Ian Heywood:No.

Alan William:It requires a change in the way we think also and the way we negotiate and the way we need to invest in the data bit of understanding what our client—

Ian Heywood:And that's going to be easier for your corporate customers because you have a direct— you have a relationship with your corporate customers.

Alan William:But from a B2C perspective—

Ian Heywood:On the B2C, but again, I always use golf and I don't play golf, so I don't really know why I use this as an example, but You know, if you know, will you think that you go to Dieter and go, hey Dieter, if I can have a fare to these leisure destinations that includes a free golf bag, which you can now provide, which is very difficult to provide these days, you know, I can boost your sales.

Alan William:I think that would be surely a negative.

Ian Heywood:And by the way, don't give it to these people over here.

Alan William:We do that still. Yes, I think those conversations that we have will change, Ian, moving ahead, seeing the ancillaries that are coming in. And when we start selling them more as a regular workflow process, we will have that data to kind of go back to the airlines and engage with them.

Ian Heywood:We've already answered a bit about one order. The timescales for that— Dieter would know more than me— 2021, 2022 for one Well, the discussion is starting now. Yeah, exactly. So yeah, they're IATA and their discussions.

Dieter Westermann:So I would think the specification is easier than building systems.

Ian Heywood:I apologize to the IATA people in the audience. Um, so, uh, yeah, it, it— look, it's going to take time. But as distributors, um, and, and the airlines are doing similar things, we talk about trip containers. We're talking about a container because more and more, you know, the, these, the, the passengers— and you're doing exactly the same because I know a little bit about some of the stuff you're doing— it's, you know, you've got to put all of this content into some container.

Alan William:Sure.

Ian Heywood:Um, which is what one order is. So when there's an industry container, hey, that could be great. In the interim, I believe a lot of companies are going to be building their own containers to put in an ATPCO PNR, a PNR from an API, an ancillary, etc., etc., a hotel, a car, whatever, all into those containers.

Alan William:True.

Ian Heywood:So one order, a little bit down the road, but it is coming and it is, it is needed and it really does back into the IATA NDC. We've done that. How is the— oh, moving. How is the internal value chain being impacted by NDC at the moment? Does the right skill set exist within your airlines? Do you have that, or you think you're gonna have to bring in—

Vikas Manra:No, this is, this is where— see, the retailing skill set generally has not been there with the airlines. Let's put it, put it very candidly. We have been very poor retailers. So, but good thing is that the way retailing has evolved and there is expertise available in the market and there are things that you can imbibe and kind of adopt very quickly. The technology today is a kind of industry agnostic, so it's very easy to imbibe the technology and use the technology for this purpose. In terms of the skill sets, the skill sets have to evolve. Yes, as Dieter was mentioning, Do we have the right skill sets to revenue management this whole aspect today? Can we optimize on the EMDs? Can we see which seat in the aircraft is selling at what pace? So can we look at that sophistication? Now, that's what has to develop over the period of time. But as we go through this ecosystem, this is where the learning curve is for the entire organization. And it's a very exciting time for any organization because really in— For an industry which has seen static movement for a very traditional way of working for last 30, 40 years, things are changing at such a fast pace and we are very happy to be part of that change.

Ian Heywood:Excellent.

Dieter Westermann:So we—

Vikas Manra:and so—

Dieter Westermann:Just to add to that—

Ian Heywood:Are you going to retrain all your staff? Are you going to bring in new people or—

Dieter Westermann:To be honest, we have— first of all, what we have done, we strongly believe it needs a totally different skill set. But not only that, we have to break the silos in the current org structure that is marketing, sales, revenue management, and so forth, and bring them in this kind of like a matrix environment. So we have established a small team inside of revenue management which is called Digital Retail Management Team, and we hired people from marketing, from sales, from comms in there. So that— and we were still trying to figure out how that will work.

Vikas Manra:Yeah, right.

Dieter Westermann:But what But what we do know and what we strongly believe, the old world will not work in that environment. It has to go away and it has to change. So we practice, we play around with it, and whatever's needed, we will change.

Ian Heywood:Yeah, that's— I know some airlines that when they've started embarking on NDC, they've had to go to their board or their senior leadership and go, by the way, you're not just signing off this money, you're signing off a restructure.

Vikas Manra:Sure.

Alan William:Yes.

Dieter Westermann:Strongly believe that, yes.

Ian Heywood:I think that's true. That's, that's good. Oh, I like this one, guys. This must be for the airlines. Shouldn't you pay me more, or should they pay you? I don't know. That's what it says here. I'm only reading out the questions. I can't do any more. I expect one of my guys put that on there. Um, so I, you know, let's not talk about the cost because that does get into commercial abilities. But, you know, are you looking— do you think the You're going to be— I presume you put business cases together to your organizations and saying, hey, with this flexibility, with these capabilities, I'm going to be able to make some more money on an ongoing basis. Yes. So you've signed that off, have you?

Vikas Manra:My boss is sitting in the room.

Ian Heywood:He has to sign that off.

Vikas Manra:But then, you know, definitely the revenue is the driver here. Simplification is the driver here. Flexibility Profitability is the driver here rather than the cost. So I look at it as an opportunity for everyone in the value chain to actually make more money, to actually make more margins. This is where the kind of profitability equation comes into play. It's not necessarily looking at the cost. It's the revenue that is driving the whole business case, at least for our side, and this is how I want to take it forward as well.

Ian Heywood:Okay, and we're running slowly out of time, so this is one for you. Very, very good question. You know, there's going to be so much choice now. Is everyone just going to get— all your customers going to get confused? How are you going to be able to tell them what these different choices are that they now have?

Alan William:I think this is going to be a great learning for us. So looking at all these different choices, it's important for us to filter out the noise and say what is apt for that kind of consumer. And that is what we are investing in from a tech perspective also with our partners, is to help us to identify what are the key things that are being sold to what kind of consumers. So that bit is that. Well, it is going to be a learning curve for us.

Ian Heywood:And we're involved in this, particularly when we put together our own front end, which, you know, our SmartPoint. It is what— and we've gone— we've got plans to do 3 evolutions of that. We've gone through the first one, we're just about to launch the second one, then we get into the final one. And you suddenly thought, well, that's a long-winded process. But actually, because you've got to do so much experimentation, you've got to understand how this content comes in, what can you do with it, it actually is proving to be a very sensible way forward. Because we're out of time, I just want to wrap up with, you know, we're in the Middle East and, you know, it's new to NDC. What would you like to leave with the audience to make them feel really comfortable, Dieter, as opposed to being really worried and nervous?

Dieter Westermann:I don't know whether I have convinced the audience that NDC is really the future and it's the right thing to do. We strongly believe that as an airline, and I can at least leave them with message that we're going to roll it out as Etihad.

Ian Heywood:So it's happening. It's happening. Get on board and get talking to you.

Vikas Manra:Absolutely.

Alan William:For us, airline retailing is important to you, and we are on board on that. We just need to get the model right. That's what we were looking at.

Ian Heywood:So you've got some interesting discussions coming up. Absolutely.

Alan William:Oh, we've been having some very interesting discussions.

Ian Heywood:He's invited you to talk.

Vikas Manra:Vikas 100% convinced us the way to go. So Excellent.

Ian Heywood:Well, please join me in thanking my panel. I think I, I do a lot of these, and this has been an amazing panel, and you've actually been very lucky to hear the very candid responses that they've had in a very complicated subject. So please join me in thanking my panel.

Alan William:Thank you, sir.

Dieter Westermann:Thank you, guys.

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