When IATA Calls for Order

Back in 2016, IATA committed on behalf of its members to establish a single order process related to the delivery of airline products and services and related accounting processes. This meant the introduction of a new messaging and business process standard. The bill got passed as a “Resolution 797 – ONE Order.”

The Legacy System

Selling airline tickets dates back further than the internet. Given the long-distance character of air travel that spans even across the oceans, there had to be a way to sell a ticket at an outpost. A look into the cards of history will show a story about the Airline Tariff Publishing Company, commonly known as ATPCO. A non-profit, privately held company, commissioned to distribute the airline fares across the globe. Even as late as the 1990s it was still common practice to print and ship fare books around the world that were valid for months at a time.

ATPCO revolutionized the publishing game with digitization, providing fare data to Global Distribution systems in the EDIFACT format – Electronic Data Interchange for Administration, Commerce and Transport, which is a United Nations-approved format. This allowed not only to publish the fares but to also sell various additional products.

Unfortunately, what propelled it forward became the weight dragging it down. In the Internet era exchanging data is no longer an issue. But the airlines, bound to publish the fares in the legacy system through GDSs, are now stuck in the past. They are unable to follow the internet-first type of distribution that became popular with the rise of low-cost carriers.

A Decade-Old Buzzword

Ideas about ditching the EDIFACT format have been sparking since 2012 when the New Distribution Capabilities initiative, NDC in short, was launched at IATA. This was purposefully aimed to introduce the new generation of notation to the airline industry – XML was to replace EDIFACT. Fast forward more than 10 years later and it seems like it barely took off the ground. To be fair though, many airlines around the world are at least capable of handling the new notation.

The ONE Order should build on top of that and further streamline the airline retailing. From the passenger’s point of view, they could buy a single product catered precisely for them, instead of a bucket of products bundled together. Everything else other than the pure service of transportation needs a separate ID – Electronic Miscellaneous Document or EMD in short. Here is where the ONE Order comes into place. It should all be ONE.

The airline side of handling a customer would benefit greatly too. So far the operational side of handling a passenger was completely separate from the financial one. The first would proceed with a Passenger Name Record or PNR, while the second with an e-ticket. Those two worlds would come together only after the passenger flies.

The industry roadmap to ONE Order by IATA (Iamge: Delivering with Orders (ONE Order) Factsheet by IATA, May 2023)

More Complex Than It Seems

The concept is noble and seems useful. Why does it take so long to implement then? The issue lies with the number of parties involved. The new notation would not be only used to communicate between the airline and the customer. It will crawl into almost every detail of the airline business. The products in their new form will need to be distributed through all the existing channels. That means not only direct online sales of the carrier but also online third parties and more importantly traditional travel agents as well. Each of those parties needs to equip themselves to handle the new technology. Each of the existing stakeholders, like GDS providers, will need to keep their skin in the game.

Internally, the project spans across the entire airline too. It involves the financial division of an airline right with the commercial one. Operational implications will follow including the cooperation between the carriers, codesharing and interlining. This will be a challenge both in terms of communication but also the technology back end with the Departure Control Systems as well.

Is It Close?

Given strong legacy influences and an incredible number of moving parts, it starts to make sense why it takes so much time to progress on such front. Nevertheless, from the passenger’s point of view, the new development seems to have only upsides. IATA also mentions goals like reducing overall complexity and improving interoperability inside the industry and beyond, which should help reduce costs and introduce new revenue streams for airlines.

With air travel reignited after the pandemic and the new wave of innovations, like Flybondi offering tickets in the form of Non-Fungible Tokens, hopefully the project had to take a few small steps to be able to now take a leap forward.

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Filip Kopeć

A passionate aviation enthusiast that started off his career as an aerospace engineer, but found his true calling on the commercial side of the airline business. Now as a finance guy among avgeeks and an avgeek among finance guys, he has experience working in the Revenue Divisions of three airlines. In his spare time he enjoys traveling, but admittedly sometimes is more about the journey than the destination.

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