Driving the future distribution - Hahn Air issues first airline ticket and flies passengers on blockchain, while NDC is a talking point

19 November, 2019

Airline distribution platform Hahn Air has this week issued a real-world ticket enabled by blockchain technology on the open-source travel distribution platform Winding Tree. This transaction has also delivered the first "blockchain passengers" with Maksim Izmaylov, founder of Winding Tree, Davide Montali, CIO of Winding Tree, and Frederick Nowotny, head of sales engineering at Hahn Air, flying on the blockchain-powered tickets on a Luxair scheduled flight from Dusseldorf to Luxembourg.

This is a landmark event in the move to future ticket distribution, and while Mr Nowotny acknowledges that its "widespread acceptance is still a vision of the future," says Hahn Air will continue to "investigate and monitor the opportunities this technology holds for travel distribution".

Blockchain technology is currently almost exclusively associated with the cryptocurrency bitcoin, but it bears great potential for all industries and endless applications. Winding Tree's founder Maksim Izmaylov believes it will have "an enormous impact on all areas of economy and commerce over the next decades".

Through the Winding Tree platform, Hahn Air has been able to list inventory, manage the reservation requests, and receive payments once the booking process is complete. Accepted payment methods are cash, credit card, or cryptocurrency (LIF token or Ether). The blockchain technology holds many advantages for the different parties involved in the process of booking an airline ticket.

These include that it is open-source, meaning all market participants such as airlines, travel companies and distribution systems can easily connect and exchange transactions. Similarly, all market participants can directly interact with each other and perform transactions without intermediaries thereby reducing costs. It is also said to be 100% secure with all of the necessary information stored in a decentralised ledger which is verified by millions of sources and therefore cannot be changed or tampered with.

Maksim Izmaylov believes that blockchain will have the power, like IATA's NDC New Distribution Capability), to fundamentally change the face of travel distribution. Significant progress is now bring made with NDC and its adoption was among the key discussion points at CAPA's recent Asia Aviation & Corporate Travel Summit in Singapore, where delegates described NDC making travel purchasing 'more of a one stop shop', be a revenue and profit generator for airlines, but is 'not a GDS bypass'.

Here's some of the observations from the discussions…

NDC introduction is 'going well' from IATA's point of view
IATA director industry distribution programs Yanik Hoyles said that from IATA's point of view NDC introduction is "going well". He noted that the 21 'leaderboard' airlines tracked by IATA are at 9% of content distributed via NDC APIs, with a target to get to 20% by the end of 2020. My Hoyles noted that 90% content distributed via NDC APIs is leisure travel, because this is the easiest content. He described 2020 as a "critical tipping point" for NDC with all GDSs getting into "full production mode" with NDC "in some shape or form".

[perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]


Next six months is a testing and trial period for NDC
Travelport global head of new distribution Ian Heywood said the next six months for NDC will be a testing and trialling period, as the basic NDC infrastructure is put in place. Mr Heywood expects over this period that leading airlines will continue connecting to the GDS, enabling travel agents to have access to NDC content. The GDSs are starting to have access to NDC content, but still "in a test environment". He also expects that technology will become less of an inhibiter, and more of an enabler, adding sale capabilities; more airlines will start to go public with their NDC ambitions. When leading airlines start talking about success with NDC, then there will be more and more interest from other airlines; agents and corporates will start to talk more to airlines about new deals and content enabled by NDC; and there will be more "sticks and carrots" introduced, which will start to force NDC content through.

NDC is 'not a GDS bypass', but a standard that allows communication
IATA director industry distribution programs Yanik Hoyles said NDC will allow the customer to compare "lots and lots of features". He added that the ability to better display more content rich offers is an opportunity for technology providers, and that NDC is "not a GDS bypass", but a standard that allows communication.

NDC will make travel purchasing 'more of a one stop shop'
Corning Asia strategic sourcing manager, travel & professional services Peter Koh said as NDC comes into place, it will make travel purchasing "more of a one stop shop". Instead of having segments of the product and price comparison offline, "everything will be online and a la carte" with NDC he said. From a corporate travel perspective, he explained that what buyers really want to know is how NDC will affect purchasing. He noted that via NDC, airlines will be offering their basic fares, plus ancillaries, which will "will make things more complicated" and lead to "a lot of maths behind working out what are the best bundles for business travellers". There will also be a need to pay greater attention to fare rules, "which make a lot of difference".

NDC is going to be a revenue and profit generator for airlines, but pushing NDC to mobile and voice is still an unresolved question
Japan Airlines vice president and head of global sales Steve Smith said NDC is going to be a "revenue generator for airlines and its going to be a profit generator as well". Mr Smith said he believes NDC is going to be a game changer for the customer as well, as they are going to be given more options and choices. The airline will announce its NDC API by the end of 2019. He added that by the end of 2020, the carrier should be "able to do ancillaries and the things the NDC brings to the customer", such as better differentiate seat offerings. But, he said an unresolved question with introduction of NDC enabled content is "how do you do it on mobile, and how do you do it on messaging apps".