How NDC Exchange Opened Up Southwest Airlines’ Retailing Strategy

by 
David Kaplan
Friday, November 15, 2019
 • 
5
 min read

For Rob Brown, Southwest Airlines’ senior director of B2B Strategy, NDC Exchange “allows us to connect to multiple partners without having to do one-to-one connections with all of those various partners because it can be expensive and inefficient in terms of the time it takes, in terms of speed to market.”

Up until this year, Southwest Airlines had tended to keep Online Travel Agencies and Global Distribution Systems at a distant arm’s length. But lately, the Dallas-based carrier has initiated several new deals that place its content on third-party booking sites that have given the economy airline a greater degree of comfort in partnering with OTAs and GDSs, particularly when it comes to attracting business from corporate travelers.

In July, Southwest agreed to join NDC Exchange, which was created by ATPCO and SITA two years ago. NDC Exchange enables API connectivity between airlines and sellers using New Distribution Capability (NDC), an XML-based data transmission standard set by global aviation industry trade group IATA.

One of the things that appealed to Southwest about joining NDC Exchange was that it didn’t require the airline to be NDC certified by IATA, while still enjoying many of the retailing benefits the trade group’s accreditation affords.

In essence, NDC Exchange enables airlines and sellers to further augment their NDC distribution strategy. To put it another way, NDC Exchange offers the direct, clearly arranged pipelines that allow airline retailing commerce to flow more freely.

Some of the other e-commerce functions made on the Exchange includes use of ATPCO subsidiary Routehappy’s rich content, which visually displays airline products such as seating and other amenities. Participation on the Exchange also comes with integration with Airlines Reporting Corporation (ARC) to complete the transactions.

 “By partnering with NDC Exchange, we are making our API more accessible,” said Rob Brown, Senior Director of B2B Strategy at Southwest Airlines. “This new addition to our no-cost multichannel distribution portfolio will drive consistency while providing the necessary functionality needed to support our Business Customers. Corporate Travel Managers and Travelers will have access to our everyday low fares and enjoy an easy and hassle-free experience from the same Southwest they know and love when booking via this channel.”

Graham Wareham, Director of NDC and Partnerships at ATPCO, added, “Southwest Airlines is a welcomed new addition to the NDC Exchange family. We are seeing a steady growth of airlines and sellers alike to the platform, and with this continued momentum and more subscribers, the value only increases for the industry.”

This is the second in a multi-part series looking at how NDC Exchange is changing the nature of airline distribution and creating new relationships to online booking and retailing. See our first part for the general overview of NDC Exchange. Subsequent parts will focus on how other carriers like Air Canada and United Airlines, as well as travel management companies like TripActions and Serko conduct business on the Exchange. In the coming weeks, we’ll also take a look at how ATPCO expects NDC Exchange to grow in 2020.

Kambr Media: What are the benefits of the NDC Exchange for Southwest?

Rob Brown: There are several benefits of working through the exchange. For Southwest, number one, it allows us to connect to multiple partners without having to do one-to-one connections with all of those various partners cause it can be expensive and inefficient in terms of the time it takes, in terms of speed to market. By connecting our API to the NDC Exchange, that's just one connection for us.

With the Exchange, we can manage how many partners we want to allow access to our content.

So to make that clear, it helps us from not only a cost perspective, in terms of one connection versus many. It also helps us from the speed-to-market perspective because we're not spending time onboarding each individual partner. Once they've connected to ATPCO, via NDC Exchange, we can flip them on or not flip them on.

In the end, the Exchange expands the breadth of our API partner portfolio.

NDC Exchange has been around for two years. Have you been directly involved in it for the whole time, or has Southwest joined recently?

No, this is recent. Our API has been in existence for almost 10 years now.

We've primarily done direct connections to corporate bookings. We learned about the Exchange late last year. We were intrigued by the opportunity to use this as our short-term plan to introduce NDC into our channel portfolio.

At the same time, we wanted to be able to expand the number of partners that we can work with. We wanted work with them in a way that we ordinarily wouldn't, because we're not NDC certified.

How does Southwest work within ATPCO’s NDC Exchange if the airline doesn’t have IATA certification?

I’ll say a couple of things. Certainly, one of the benefits that I forgot to mention earlier is that connecting through the Exchange allows us to work with NDC certified partners without us having to do a lot of work. We don’t have to invest time and effort into our own API to help a distributor achieve NDC certification.

While it’s the nature of an online exchange to automate many processes once you’ve set the controls, such as which channels get access to specific inventory and at what price, how much work does it require on an airline’s end? And is it all impersonal and automated, or is there a one-on-one deal aspect involved through the Exchange?

From a display perspective, if there's a distributor that is interested in working with Southwest through the Exchange, that distributor will contact us directly.

We have to have a contractual agreement with them that outlines what we want. For the display, the contract ensures we have a consistent customer experience across all channels.

So the first step is the distributor contacts us. And we present a contractual agreement.

Secondly, if they're not already connected to NDC Exchange, then they have to do whatever technical work is necessary to make that connection. Once they get their connection to the Exchange, the third part is the testing between what we're already sending to the Exchange and based on what they can see.

After that, they provide us with a demo of what the end product will look like for the end user. Once we give a thumbs up and the approval on what the display and what the customer experience will be, then we just talk about a timeline for the distributor to log on into the marketplace.

What products are available on the Exchange? Is it mainly bookings? Or does it include ancillaries?

Southwest doesn't have a lot of ancillaries except for EarlyBird Check-In.

That's really all that we sell. So the full suite of our product and our program is available through our API. Customers can book, ticket, or cancel service by EarlyBird.

Customers basically have access to everything that they would have access to if they came directly to one of our websites.

ATPCO recently expanded its year-old Next Gen Storefront program, which ensures that the bookings airlines offer on Global Distribution Systems like Sabre, Travelport, and others will be presented the same as on the carriers’ branded websites. Does NDC Exchange incorporate that for Southwest as well?

I believe that all of the partners are incorporating NGS into how they are building out their front-end tools. That's the reason why they have to give us a demo of the product before we allow them to go live or not.

Is Southwest planning on becoming NDC certified? Or do you not need to, because, as you say, you don’t have many ancillaries and Southwest tends to emphasize direct bookings?

I’d say we’re taking a wait and see approach. Right now, NDC certainly has a lot of momentum. But there are still some additional steps that need to be taken before it is a standardized process and allows for connectivity for all third parties.

Until it begins to reach that point, and until it begins introducing things we can't do today with our own API, we’ll wait to make the pivot. It comes down to deciding whether or not we're going to invest in rebuilding our API on our own or working with a third party.

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