13564189.1 BEFORE THE
UNITED STATES DEPARTMENT OF TRANSPORTATION WASHINGTON, DC.

Agreement Adopted by the Passenger
Services Conference of the International Air Transport Association Docket OST

- 2013

-

APPLICATION FOR APPROVAL OF AN AGREEMENT (RESOLUTION 787) BY THE
INTERNATIONAL AIR TRANSPORT ASSOCIATION

Notice: Any interested party may within 21 days of the application date file comments in support or opposition to the application.

11 March 2013

Communications with respect to this document should be sent to:

Doug las Lavin Regional Vice President

– North America International Air Transport Association 1201 F Street, NW, Suite 650 Washington, D.C. 20004 (202) 628

- 929213564189.1 Of Counsel

Bert W. Rein
Bruce L. McDonald Wiley Rein LLP 1776 K Street, NW Washington, DC 20006
202/719

- 70001

13564189.1 Summary DOCKET: OST

- 2013

- [ ] DOT ORDER: pending

Date: 11 March 2013 Filing fee/IATA Acct: $61 US/UST involved?: yes Intended effective date: 1 June 2013 Meeting date/time: 34 th PSC held in Abu Dhabi on 18

- 19 October 2012

Memorandu m PSC/RESO/154 dated 4 January 2013 Agreement/Minutes: Resolution 787

- PSC Minutes 29 through 43

APPLICATION FOR APPROVAL OF RESOLUTION 787

This application requests DOT to approve new IATA Resolution 787 (Enhanced

Airline Distribution) that was adopted by the Passenger Services Conference during its

18

- 19 October 2012 meeting. Antitrust immunity is neither requested nor necessary for

t he Resolution , which establishes high

- level objectives for and a process for developing

a new electronic data interchange standard for airline distribution communications using

Extensible Markup Language (XML), the modern programming language of the Internet.

The Resolution is intended to become effective on 1 June 2013. Copies of the

Resolution , the supporting conference d ocumentation and conference minutes are

attached.

Resolution 787 also refers to a New Distribution Capability, or NDC. NDC i s an

aspirational description of various improvement s in distribution which, if adopted in the

market, the new XML standard would b e capable of supporting. These descripti ons

provide context to the business needs and benefits that the new standard will

accommodate. IATA members will continue to consider the goals of NDC, but at this2

13564189.1 time IATA seek s DOT’s approval of Conference Reso lution 787 only insofar as it

describes a means to modernize distribution communications technology with a new

XML standard . IATA is not seeking an endorsement of the stated business

requirements or marketplace aspirations of NDC and recognizes that any a dditional

conference agreements on standardization of distribution practices would need to be

filed with DOT before becoming effective

. IATA also acknowledges that the processes

contained in previously approved Passenger Services Conference Resolu tion 783

would continue to govern the new Passenger Distribution Management Group’s efforts

under Resolution 787

.

I. BACKGROUND

IATA was created in 1945 to support the development of standards to promote a

safe and efficient international airline system. IATA has wo rked with its member airlines

and other stakeholders to set a large spectrum of standards that significantly improve

the efficiency of international aviation, improve passenger and cargo services, facilitate

compliance with regulations and support interli ne capabilities. IATA developed and

maintained the standards for neutral paper tickets, which were eventually replaced by

standardized electronic ticketing . Two

- letter airline identifiers, three

- letter airport codes

and the bar code s used on baggage tags and tickets are all examples of IATA

- led

standardization

.

A. The current distribution data communications standard was developed decades before the Internet.

IATA and the Air Transport Association (now A4A ) developed and maintained the

data interchange standard currently used for shopping and purchasing tickets through3

13564189.1 travel agents. This standard specifies the data format for seeking a fare quote and

other functions. For instance, the standard defin es certain data elements such as the

dates of travel , origination and destination, type of traveler

– adult, child or senior

- class

of service requested and so on. T he format of these data elements must be

recognizable by the computer receiving the request and is part of the standard . The

response has cert ain specification s as well , as will each step in the process of

shopping, booking, payment and post

- ticke ting changes or other servicing

.

Standardization of the data specification avoids the inefficiency of hundreds of

individualized airline data formats t hat GDSs and others would have to match.

A irline distribution communications currently use messag e data specifications

that were developed before the Internet provided ubiquitous global connectivity between

airlines and airline customers. Starting in the 1960s

, the airline industry buil t distribution

applications in a computer language called TELETYPE and the data specifications were

developed by IATA and A 4 A . Eventually, IATA led the industry to upgrade some of its

data exchange s to EDIFACT messaging pr otocols, another set of data format rules

originally developed under United Nations auspices. T he format of messages, most

notably the use of capital letters and the use of cryptic codes to indicate certain

functions for the computers , has remained largel y unchanged for more than four

decades.

B. The Internet introduced XML, a simpler, more flexible data format

.

With the advent of the Internet came a standard method to describe data

structures called Extensible Markup Language (XML). XML provide s a set of rules for

exchanging data over the Internet in a simpler and more flexible format than EDIFACT

.4

13564189.1 XML has become the standard way to describe data structures and transmit data over

the Internet and has become the default for the majority of applications tha t run on the

Internet today.

Today, most airlines use XML to deliver their products and services directly to

customers on their own websites while the indirect travel agency channel remains

largely dependent on EDIFACT. X ML makes it ea sier, faster and c heaper to provide

the customer more information about fare alternatives, ancillary services, on

- board

amenities, and graphics such as pictures or seat maps, than programming in EDIFACT.

The flexibility, ease and broad use of XML allow airlines to purchase applications

supporting XML and/or quickly develop their ow n applications to meet the evolving

needs of their passengers. To be clear, GDSs today do utilize some XML

- based

applications , and m any airlines also still rely on legacy TELETYPE and EDIFACT

plat forms for customer communications

. But recent shifts in individual airline

distribution strategies have underscored the need to facilitate the expanded use of XML.

C. Changes in the market drive the need for modernization

For decades, airline shopping has been based on only two factors ; schedule and

price , using “low fare search engines” to find only a single, often restricted, fare

. Sole

r eliance on only those two factors has eroded as airlines added amenities, such as

better seats, in

- flight entertainmen t, power po rts for computers, or WiFi, unbundled

other services such as lounge access, advance seat selection, checked baggage,

priority boarding or fast lane security access , and sought to offer consumers more

transparency among fare choices with fewer re strictions on refunds or exchangeability,

varying frequent flyer mile awards and other bundled benefits

. Price transparency alone5

13564189.1 is no longer enough to make an informed choice

- true transparency means disclosing

price along with the corresponding produc t information. The shift fro m EDIFACT to

XML has made it possible to provide true price and product transparency on airline

websites. Resolution 787 is intended to help pave the way for that same shift in the

travel agency distribution channel.

The marke tplace pressure for true price and product transparency is irrefuta ble.

Each of the major GDSs has taken steps in this direction. Sabre Red, Travelport’s

Agencia and Amadeus Airline Retailing Platform

- all in early stages

- boast at least

partial soluti ons. Other technology servic e providers such as Datalex, FareLogix and

others are also responding to the demand for new solutions. In the absence of an

industry standard, progress has been painfully slow, reportedly expensive and very

uncertain. Bringin g the industry together now to standardize an XML data format for

these and other service providers will provide some assurance that no one is investing

in Betamax in a VHS world, or DVD in a Blu

- Ray market. It will propel the development

of further solut ions and escape the inefficiency of customized, one

- off programming

efforts.

II. RESOLUTION 787 ALSO CONTAINS A VISION FOR THE FUTURE

While DOT should no t ignore t he aspirations of IATA’s NDC described in

Resolution 787, its review of Resolution 787 should be on its own terms. The ind ustry is

hopeful that new XML data formats will aid in expanding to the travel agency sales

channel essentially three broad benefits already found on some airline websites: (1)

allowing a customer to shop, select and purchase a ncillary services or fares packaged

with ancillaries, (2) the ability to see and weigh differences in competing product s , such6

13564189.1 as more leg room, lie

- flat premium seats, in

- flight entertainment or WiFi along with price,

and (3) customized service and amenit y packages and pricing based on attributes such

as loyalty program status that the customer is willing to share in the shopping process

.

But full development and testing of the XML standard is expected to take at least a full

year to complete

, after which it will be up to the marketplace to make the investments

necessary to adopt and implement its use.

III. CONTENT OF RESOLUTION 787

Much has been said about Resolution 787 since it was approved by the

Conference in October, 2012, making it worthwhile to examin e its wording and intent

more closely. At its core, Resolution 787 is designed to support the development of an

open XML

- based data exchange standard to complement the existing TELETYPE and

EDIFACT data exchange standards, which are already managed by IAT A for the airline

industry. Much in the same way paper tickets and electronic ticket standards co

- existed

for many years, today’s EDIFACT

- based data standards will continue to exist and be

supported pursuant to Resolution 783 until there is such widesprea d adoption of the

new XML standard that support for the EDIFACT standard can be ended without

disruption to the industry. In the most optimistic scenarios, that is expected to take

many years.

There are two essential goals in drafting the XML data stand ard: 1) ensure that

the data specification accommodates all of the business functions any stakeholder

might want to use , as far into the future as we can reasonably predict, and 2) attempt to

standardize the format for any data any stakeholder might reques t and choose to use.

This effort to establish standards has led to some misconceptions about Resolution 787.7

13564189.1 A careful reading of the Resolution shows that it specifies only a few broad principles

which apply only if an airline chooses to use them , and i f passengers are willing to

respond

. Resolution 787 sets forth some of the standard business processes that are

anticipated in an NDC environment and sets the broad parameters of what

communications capabilities the industry requires should participants i n the distribution

system pursue new approaches

.

A. Detailed Description of Resolution 787

The following sets forth a section by section description of the Resolution :

“Resolved”

The first paragraph captures the essence of Resolution 787. It makes it clea r

that airlines are free to decide whether or not to distribute enhanced content (such as

ancillaries ) through multiple channels of distribution. I f an airline cho o ses to distribute

enhanced content through both direct and indirect channels, it is expected to work

within the data formats to be developed pursuant to the Resolution in order to achieve

the intended standardization and efficiencies

. However, Resolution 787 does not

obligate any IATA member to implement the provisions in whole or in part . Noth ing in

the Resolution compels conversion to the use of XML . Further, the functionality of the

standards may go beyond the needs of some or all airlines. The standards will be

followed and used only to the extent they are perceived as useful and effective by

airlines and intermediaries acting on behalf of their customers.

1. Objectives

Section 1 of the Objectives sets forth the scope of the Resolution as well as the

key principles that constrain the development of the standard. Sections 1 and 1.18

13564189.1 provide a general introduction and describe one anticipated business model in which

the pricing and product offer is assembled dynamically by the airline upon request,

rather than using central static dat abases for prices and schedules that are not flexible

enough t o meet the new demands of combined product and price transparency.

Section 1.1 also includes a diagram of the Distribution Capability Landscape

.

The diagram depicts one example of a system architecture that could be used to

apply the XML standard . It sh ow s the relationship between one airline in dialogue with

various shoppers or shopping intermediaries using the proposed messaging standards.

It should be no ted that t his representation is only an example of a hypothetical single

airline’s potential archit ecture, and so mething equivalent would be re plicated by any

airline choosing to implement enhanced content distribution to multiple channels. The

diagram is shown as follows:

-9

13564189.1 On the left hand side, the box represents an airline’s internal product and p ricing

process. This example of a system architecture includes a rules engine and internally

managed databases used to formulate a response to a query received in the specified

data format. In this example, the airline manage s its own data and constructs a

response to each request

, which could be simply price and schedule, or much more

robust, providing product offers based on information the traveler has chosen to share.

There are likely other system architectures that could take advantage of an XML

- base d

standard

.

On the right hand side are a number of boxes representing the divergent sources

from which a request for a product offer could originate

– a distribution channel10

13564189.1 intermediary, a travel agent, a customer or another airline. What is important t o note is

that each airline will respond with only its own offer. There will remain an essential role

for intermediaries competing to provide an application (a Dynamic Airline Shopping

application) using the new data standard to make requests, receive all airline

respo nses, organize them for comparison and shopping by the traveler or travel agent

,

and provide the booking, payment and post

- sale functions. The connection to these

intermediaries is indicated in the diagram as the layer labeled “Dynamic Airli ne

Shopping Application Interface (DAS API) ” . The efficiency of these processes is

dependent on t he standardization of the various messages used to pass request s and

repl ies back and forth among hundreds of airlines and directly or indirectly to thousands

of travel agents

.

Section 1.2 sets forth certain Key Principles for the development of the XML

standard.

• Section s 1.2.2

– 1.2.3 state th e intention to develop data standards in

XML that will enable third parties to access airline co ntent directly from t he

carrier, and to rely on the PADIS Board message standards established

under Resolution 783 for transmission of data

.

• Section 1.2.4 states that IATA will not constrain the new standard by

attempt ing to make it backward compatible t o the existing EDIFACT

based network s

. New XML standards sho u ld attempt to accommodate as

many business objectives and applications as possible without limitations

arising from the old system. Nothing prevents third parties from developing

backward compatibility , and the Reso lution provides the freedom for11

13564189.1 airlines to distribute their content through the legacy network s

, use the

new XML standard, or both . We anticipate that this hybrid approach will

continue for some time by many airlines. IATA intends to maintain the

EDIFAC T standard as long as it remains relevant to the industry.

• Section 1.2.5 outlines some key new functionality and consumer benefits

the XML data standard is intended to enable, including:

o Section 1.2.5.1

– allow custom pricing and product offers based on

information provided by the consumer

o Section 1.2.5.2

– facilitate a shopping basket approach allow ing

customers to choose the products and amenities they want with

corresponding price information

o Section 1.2.5.3

– ensuring support for new products and

amen dments to existing ones

o Section 1.2.5.4

– a transparent display allowing price and product

comparisons

o Section 1.2.5.6 1

– defines authentication of the party asking for a

customized offer

o Section 1.2. 6

– encourages distribution across all channels (subjec t

to airline require ments for access to this content)

o Section 1.2. 7

– state s that the model shown assumes the airline

distributes only its own products and prices with full control of its

price and product content

1 A numbering error omitted a section 1.2.5.512

13564189.1 o Section 1.2. 8

– recommends standardized st ructures for product

attributes to facilitate comparison shopping among airline offers

o Section 1.2.9

– makes express that non

- participant airlines will not

have to contribute to meeting the costs of developing the standard

2. Definitions

This is a standard se ction providing clarity to the terms used in the Resolution

.

3. Business Process Description

Section 3 .1 of Resolution 787 contains a description of the authentication and

shopping process. It specifies three requirements that the shopper’s request must

incl ude :

• 3.1.1 .1.1

– data to identify who is making the request whe n an

intermediary is present,

• 3.1. 1.1. 2

– data to identify on whose behalf t he request is being made,

and

• 3.1.1.1.3

– elements of the requested trip

.

Each of these sections of the Resoluti on contains non

- mandatory examples of data

elements the new standard should accommodate. T here is nothing new or novel about

them, and all are part of the current shopping process. Travel agents or other

intermediaries must be authenticated users of the systems to make r equest s to a GDS.

Second, t he current systems request s for fare and schedule information identify at lea st

whether it is for an adult, child, senior, in some cases a member of the military on active

duty or other traveler with a promotion or discount code. Some systems may default to

“adult,” but information in this category is always included to attempt to provide the best13

13564189.1 applicable fare for the specified traveler . The new standard is intended to

accommodate either this ‘anonymous’ sho pping request or customized offers if more

information is provided by the consumer

. Third , some details of the intended trip such

as origin, destination and dates of travel are of course necessary to create a proper

response.

Some critics have argued th at the specific examples listed under each of these

requirements are also intended to be mandatory. Those criticisms are not supported by

the language of the Resolution. The three obligatory general categories are introduced

as follows:

“The request shal l include but not be limited to:” (3.1.1.1 .) (Emphasis added.)

In contrast, the lists are examples of potential data elements

, and are always

introduced as follows:

“Data may include but not be limited to:” (3.1.1.1.1. Repeated in 3.1.1.1.2,

3.1.1.1.3) ( Emphasis added).

Thus, what is new is that the proposed XML standard will allow much more data

to pass between the customer and the airlines, via an intermediary, if both choose to

use it. T he list of attributes about a passenger contained in 3.1.1.1.2, Name/Age/Marital

Status, Contact Details, Frequent Flyer Number or Profile number, Customer Type,

Travel History, Nationality, Shopping History, Previously Purchased Services are all

only fields in the data specification that will be considered for inclus ion in the standard

(“may” include) . All of those attributes, and perhaps others, are elements of data an

airline might want, and a shopper might be willing to give , to contribute to a more

customized shopping experience , but not hing will require all of t he defined data fields be14

13564189.1 used . The standard should accommodate those data fields, but none are prescribed as

mandatory by Resolution 787. 2 In short, the new data specification will continue to

support “anonymous” fare quotes

.

In fairness to some criti cs , Resolution 787 is focused on the desired new

capability the XML standard would support and simply assumes the co

- existence of

current business processes. To be clear, Resolution 787 is intended to add new

capabilities to the existing marketplace. Aga in, a nonymous shopping requests will be

supported in the new data standard, and the current EDIFACT system will be

maintained in parallel. Further, neither Resolution 787 nor IATA is attempting to dictate

how the distribution market will evolve in the fut ure or who the industry stakeholders will

be and what and how they will charge for their service s . Those development s will be

controlled by the market. Resolution 787 simply outlines a path to update an outdated

data exchange standard to support the busi ness processes envisioned by NDC.

Whether distribution incumbents or new en trants are able to leverage these new

capabilities to enhance or sustain their business model is left to the marketplace

.

• Sections 3.1.2 and 3.1.3 contain descriptions of technic al processes for

order and change processing, in some ca ses using the same syntax of

non

- mandatory lists of examples to help clarify the principle.

4. Attachment A

This section describes the governance process by which IATA will work with all

industry stakeho lders to ensure a consistent approach to the development of the

2 As a practical matter, certain data fields, such as origination and destination, must be used to generate a fare quote. Other fields, such as passenger attributes, could be set to a default as is often the case today.15

13564189.1 standards. The top of the governance structure is the Joint ( A4A/IATA ) Passenger

Services Conference. The Resolution creates t he P assenger D istribution Management

G roup ( Management Group ) to provide a strategic direction

, and the deliverable is a

Passenger Distribution Implementation Manual that will contain process flows,

recommended practices, technical specifications, implementation guides and service

level templates. The Passenger Distribu tion Implementation Manual is expected to be

the XML counterpart to the existing A 4A/IATA Reservations Interline Message

Procedures

– Passenger manual for EDIFACT data standards that IATA has updated

and published for over 30 years.

IV. PROCESS AND PARTICIPA NTS

The IATA Board of Governors endorsed an initiative to facilitate NDC in

2011. The IATA Passenger Services Conference assumed responsibility for developing

standards to facilitate the NDC process consistent with its historic role in standardizing

co mmunications codes and protocols for interline, passenger

- related communications.

Under governance of t he Conference is the Passenger Distribution Group ( PDG )

consisting of high level airline marketing executives from 11 airlines. 3 The PDG was

charged wi th “defining the [NDC] vision” in order “to increase competition, stimulate

innovation, reduce distribution costs and improve consumer choice.” 4 PDG initially

3 Those airlines are Air Canada, Alitalia, United Airlines, Inc., Delta Air Lines Inc., Air France/KLM, British Airways p.l.c., Deutsche Lufthansa AG, Swiss International Airlines Ltd, Korean Air Lines Co. Ltd, Cathay Pacific Airways Ltd, and Singapore Airlines Ltd. The first PDG Chair was Andrew May, British Airways ; the current Chair is Graham Wareham, Air Canada . The Secretary is Eric Leopold, IATA Director Passenger.

4 See “ Report

– Passenger Distribution Group (PDG)” that is among the attached conference documents. The Terms of Reference of the PDG are attached to that report.16

13564189.1 concluded that a “foundational standard” incorporated in a Passenger Services

Conference Resolut ion was an essential first step in advancing NDC. 5 That step now

has been put in place by Resolution 787 adopted by the Conference on October 19.

The Passenger Distribution Group created the Distribution Data Exchange Working

Group (DDXWG) 6 where the det ailed technical work is taking place . Because the

standard must support the business processes at each step in the distribution chain, in

addition to airline representatives the DDXWG includes the major GDSs, travel agents

and their associations as well as existing and new entrant technology providers. 7 It is

essential that their input shape the standard. If the standard fails to support an

essential business process for any one of these stakeholders

– for instance travel

agency CRM needs or the ability t o service the booking after it has been made

– the

standard may not be widely adopted and the initiative will fail to deliver on its essential

goals.

Accordingly, the DDX WG cast a wide net. The first meeting of the DDX WG was

attended by 48 representativ es

, not including IATA employees, and included airlines, all

three major GDSs, online travel agents, and a variety of technology service providers to

the industry. The second meeting had 62 participants, many of the same, but adding

5 Report

– Passenger Distribution Group (PDG).

6 The DDXWG, formed by the PDG, convened its fir st meeting on 13 July 2012. Its second meeting was held 27

- 30

November 2012.

7 Non

- airline stakeholder participants have included Advantage Travel Centres Ltd, Amadeus, ARC, ARTA, ATPCO, BCD Travel, Billetkontoret, Dertour GmbH & Co. KG, Farelogix, Google /ITA, Hewlett Packard, HitchHiker, Indra, ISO, Key Travel, Navitaire, NIIT Technologies, OAG, Reisebuero Buehler, Sabre, SATA, SITA, Travelport, and Unisys, among others.17

13564189.1 traditional travel age ncies as well. IATA anticipate s continuing this broad participation

throughout the process to ensure the most robust, workable standard is achieved.

V. Request for DOT Approval

IATA is submitting Resolution 787 for approval under Part 303 of the

Departmen t’s regulations. IATA believes that Resolution 787 could have been filed for

information only under DOT Order 2012

- 4

- 18 (Tier 1). In fact, Resolution 787 is

principally an articulation of goals and a template for future work and has no immediate

effect o n airline distribution practices, competition or passengers. Nevertheless, IATA

recognizes that movement toward any significant coordinated change in the technical

standards for selling airline services is likely to warrant fuller scrutiny by the Departme nt

and may create uncertainty and concern among those business entities vested in, and

benefitting from, current practices. By submitting Resolution 787 for approval, IATA

seeks to make clear that it is both pro

- competitive and pro

- consumer and to allow D OT

to approve it after hearing from all interested parties. Having DOT’s imprimatur by

approval will give added impetus to and confidence in the ongoing efforts of the

Passenger Services Conference and restrain those who might otherwise seek to

obstruct t hose efforts by threatening adverse legal or regulatory actions.

Section 41309(b) of the Transportation Code requires the Secretary to “approve

an agreement ... when the Secretary finds it is not adverse to the public interest and is

not in violation of t he Act.” Because there is no discernible basis on which Resolution

787 could be found in violation of the Act, the determinative public interest issue is

whether harmonizing standards and procedures under Resolution 787 promotes or

unreasonably restrains competition in air transportation. That issue does not turn on18

13564189.1 whether the modernization of technological capabilities could disturb those vested in

existing distribution practices but whether this industry initiative advances the interest of

the travelin g public. The answer to that inquiry is a resounding “Yes!”

• Resolution 787 supports enhanced consumer choice and offer comparison: By

modernizing the messaging standard, it will ultimately enable consumers to have

seamless access to airline offers that they can compare and purchase from a

single source. Passengers can receive special offers based on information they

provide, their purchasing history and/or stated preferences.

• Resolution 787 supports competition among airlines: It will enable increased

competition among airlines seeking to entice customers with enhanced service

offerings in addition to price . Competition generally results in lower prices and

better service for end users.

• It Resolution 787 will help open the existing distribution market t o strong

competition from new entrants using the more robust and familiar XML data

format standards. We anticipate new entrants will include established (e.g.

today’s GDSs and IT suppliers) and start

- up technology companies that are

prepared to deliver X ML based applications to support travel agent and

consumer needs for organized and transactable comprehensive airline offers.

• Resolution 787 will help e nable travel agents and others in the distribution chain

to evolve to better meet customer needs: The r esolution does not seek to

eliminate key airline distribution incumbents. Rather, consumers will still use the

services of agents to sort through their significantly increased options , prices and

bundled packages . Business will still be able to use the se rvices of business19

13564189.1 travel centers to administer their contract rights, make bookings and provide

accounting control. Agents and business travel centers will be able to use the

services of aggregators, including GDSs, to enhance their ability to compare

ai rline offers

.

In short, approval of Resolution 787 would be an important milestone on the road to a

more robust, passenger

- centric airline distribution system. Resolution 787 should be

approved promptl y so that all industry participants can be confident t hat the new

technical standards will be available to support innovative developments in airline

distribution

.

Respectfully submitted,

_______________________ Douglas Lavin Regional Vice President
North America International Air Transport Association
Atto rney

- in

- fact13564189.1 CERTIFICATE OF SERVICE

A copy of this application has been served this day by first class or priority mail on the following persons:

Chief, Transportation, Energy &

Agriculture Section

Antitrust Division Department of Justice

Washin gton, DC 20530 David Radcliffe

Chief Executive Officer Hogg Robinson Group 16 E. 34th Street, 3 rd Floor New York, NY 10016

Paul Ruden Senior Vice President of Legal and Industry Affairs American Society of Travel Agents 1101 King Street, Suite 20 0 Alexandria, VA 22314 Pat Funk

Executive Director

Association of Retail Travel Agents

4320 North Miller Road Scottsdale, AZ 85251

- 3606

Eric Bock Executive Vice President, Chief Legal Officer

and Chief Administrative Officer Travelport

300 Galle ria Parkway Atlanta, GA 30339 Grey Webb

President

Sabre Travel Network

3150 Sabre Drive Southlake, TX 76092

Scott Gutz

President and Chief Executive Officer Amadeus North America, Inc. 3470 NW 82nd Avenue, Suite 1000 Miami, FL 33122 Barney Harford

Chief Executive Officer

Orbitz Worldwide Inc. 500 W. Madison St., Suite 1000 Chicago, IL 60661

Dara Khosrowshahi

President/CEO Expedia, Inc. 333 108th Avenye, NE Bellevue, WA 98004 Robert L. Darbelnet

CEO/President AAA Travel (AAA Inc.)

1000 AAA Drive

H eathrow, FL 32746

Douglas Anderson

President/CEO Carlson Wagonlit Travel 701 Carlson Parkway Minneapolis, MN 55305 Sam Jain

CEO/Chairman Travelong Inc. 212 W. 35th St., Suite 1302 New York, NY 1000113564189.1 Jeffery H. Boyd

President/CEO

Priceline.com

800 Conn ecticut Avenye. Norwalk, CT 06854 Michael Batt

Chairman/Founder Travel Leaders Group 3033 Campus Drive, Suite W320 Plymouth, MN 55441

Joop Drechsel

Chief Executive Officer

BCD Travel 6 Concourse Parkway, Suite 2400 Atlanta, GA 30328 Norman Knowles

Grou p VP Loyalty Travel Agency 6442 City West Parkway Eden Prairie, MN 55344

Dean Smith

President

FC USA 69 Spring St. Ramsey, NJ 07446 Bryan Leibman

President/CEO

FROSCH 1 Greenway Plaza, Suite 800 Houston, TX 77046

William H. Tech

CEO/President

Travel a nd Transport Inc.

2120 S. 72nd Street Omaha, NE 68124 Priscilla Alexander

President

Protravel International Inc.

515 Madison Avenue New York, NY 10022

Alexandre Chemla

President

Altour International Inc. 1270 Avenue of the Americas, 15th Floor New York, NY 10020 Brad Tolkin/Jeff Tolkin

Co

- Chairman/CEO World Travel Holdings

100 Fordham Road Wilmington, MA 01887

Peter Liney

Chief Executive Officer

STA Travel 750 State Highway 121, Suite 250 Louisville, TX 75067 James E. Wells

Chief Executive Officer

Wo rld Travel Inc. 1724 West Schuylkill Road Douglassville, PA 19518

Gloria Rohan

CEO/President Omega World Travel 3100 Omega Office Park Fairfax, VA 22031 Tammy Krings CEO/Leadership Coach

TS24 7775 Walton Parkway New Albany, OH 43054

Paul Metselaar

Ch airman/CEO Ovation Travel Group

71 Fifth Avenue New York, NY 10003 Yoshimori Himeno

President

JTB

19700 Mariner Avenue Torrance, CA 9050313564189.1 Jeff Smith

President

Travizon Inc. 275 Mishawum Road, Suite 300 Woburn, MA 01801 Lisa Durocher SVP/General Manage r American Express

World Financial Center 200 Vesey Street New York, NY 10285 Patrick Fragale

President/COO

Directravel 860 Wyckoff Avenue Mahwah, NJ 07430 Jonathan Perkel Senior VP, General Counsel Travelocity

3150 Sabre Drive Southlake, TX 7609 2

A copy of this application has been sent this day by email to Susan Kurland (Susan.Kurland@dot.gov), Bob Letteney (Bob.Letteney@dot.gov), Bob Rivkin (Bob.Rivkin@dot.gov), Sam Podberesky (Sam.Podberesky@dot.gov), Don Horn (Don.Horn@dot.gov), Todd H oman (Todd.Homan@dot.gov), Bob Goldner (Bob.Goldner@dot.gov), John Kiser (JohnKiser@dot.gov) and Della Davis (Della.Davis@dot.gov) of the Department of Transportation, as well as to Robert Young (robert.young@usdoj.gov) of the Department of Justice.

/s/ Douglas Lavin Douglas Lavin

Date Served: 11 March 2013

### M E M O R A N D U M

PSC/RESO/ 15 6

To: All Members, Passenger Services Conference

- Accredited Representatives

Copy: IATA Strategic Partners

From: Head, Interline & Intermodal Policy

Date: 28 January 2013

Subject: BOOK OF FINALLY ADOPTED RESOL UTIONS & RPs

– Part 2
RESOLUTION 787

3 4 th IATA Passenger Services Conference (PSC)
Abu Dhabi

, 1 8

- 19 October 20 1 2

Attached is Resolution 787 which w as adopted at the above

- mentioned Conference.

“Part 1” of the book of finally adopted resolutions and RPs was circulated on 28 January 2013 and comprises all other Resolutions and Recommended Practices adopted at the above

- mentioned
Conference.

The filing period is established as 29 January

– 18 March 2013. To ensure timely approval, Members are request ed to file these agreements, where required, with their Governments upon receipt of this document and to advise this office (email: mullerm@iata.org ) of their Government’s action by the end of the filing period (18 March 2013 ).

Filing formalities with the Canadian Transportation Agency on behalf of Canadian Members will be accomplished by this office.

Filing formalities with the United States Department of Transportation (DoT) on behalf of IATA Members will be accomplished by IATA’s Regional Vice Presiden t, North America.

The Minutes of the Conference are issued separately under Memorandum PSC/MINS/042 dated 28 January 2013.

The intended effective date is 1 June 2013

.

Mike Muller International Air Transport Association

Route de l'Aeroport 33
PO Box 416
CH

- 1215 Geneva 15 Airport
Switzerland

Tel: +41 22 770 2731
Fax: +41 22 770 2896

### OUTLINE OF CONTENTS

RESOLUTIONS & RECOMMENDED PRACTICES

AD OPTED AT:

3 4 th PASSENGER SERVICES CONFERENCE (PSC)

INTENDED EFFECTIVE DATE: 1 June 2013

Resolution/RP Title

PSC (34) 7 87 E NHANCED AIRLINE DISTRIBUTION ( new )RESOLUTION 787
ENHANCED AIRLINE DISTRIBUTION (new)

PSC(34)787 Expiry: Indefinite Type: B

P7 & P7.1

RESOLVED that,

Members and/or systems providers may, for online or interline carriage, provide capability to offer a wide selection of their products and services to their customers through a wide variety of distribution channels. Members and/or systems providers shall apply the following procedures when distributing enhanced content through multiple channels of distribution with their many partners.

OBJECTIVES

1. General

IATA standards and procedures allo w airlines to better manage the distribution of their range of products and services that they wish to provide in an effective way, irrespective of the distribution channel. Enhanced standards are necessary to enable airlines to move to a dynamic content d istribution model. This model recognizes that airlines and their customers need more real time dynamic interaction between all parties: airlines, distributors and travel agents so they can offer an intelligent response for all products based on who is aski ng. Acknowledging that a management group is required to oversee the development of new passenger distribution processes and standards, a Passenger Distribution Management Group is established in accordance with the provisions as published in Attachment “A ”.

1.1 Scope

This resolution recognizes that a standard process is required for airlines to create their own product offer within their own systems (i.e. assemble fares, schedules and availability

- all in one transaction) which will be provided directly by and owned by the airline. This will enable more agile pricing and more personalized offerings. In this way, all product offers (including ancillaries) will be available for distribution through all channels that an airline wishes to sell them through. In t his regard, this IATA standard will enable the creation of a Dynamic Airline Shopping engine Application Programme Interface (DAS API) based on IATA XML messages. The focus of this resolution will describe the main business processes that are required to

s upport it.Distribution Capability Landscape

The diagram above represents the Distribution Capability landscape that will provide an interactive exchange based on knowing who is making the request irrespective of the distribution channel being use d. This may involve, but not be limited to requests from passengers, agents, interline partners, and other distribution channel providers who may provide solutions to their own subscribers. Requests shall be sent using industry standard messages from the d istribution channel provider to the airline’s dynamic shopping engine. Airlines will determine what product offer to return in the response based on attributes that have been sent in the request. Solution providers shall be capable of providing interactive messaging to an airline’s DAS API in accordance with industry standard messaging.

1.2 Key Principles

1.2.1 Business and technical standards shall enable airlines to distribute products across all channels and allow airlines to independently offer dyna mic shopping/pricing through any channel.1.2.2 Underlying messaging standards will use modern messaging technology (e.g. XML) as the most suitable and readily available messaging standard to support technologies. PADIS message standards shall be used for the transmission of data. Development of messaging standards shall be in accordance with the provisions of
Resolution 783.

1.2.3 . Such standards shall enable any third party (approved) channel to access airline content directly from the carrier.

1.2. 4 With due consideration for established business processes, procedures and current system functionality, there should be no constraints driven by any requirement for backwards compatibility. Airlines may wish to establish a roadmap for migration showing j ustification for backwards compatibility only if there is a
defined business need.

1.2.5 Enhanced Airline Distribution shall:

1.2.5.1 allow individual carriers to determine its own prices and the nature of those products offered, depending on who the req uestor is and what they are requesting. This will require authentication and the provision of historical data based on previous transactions,

1.2.5.2 facilitate the implementation of a ‘shopping basket’ capability concept allowing for the consumer to add or remove items from their basket as they choose. Each of these choices can trigger a “re

- pricing” of the offer(s) provided by the airline,

1.2.5.3 support distribution of new products as well as changes and amendments of existing orders,

1.2.5.4 facilit ate a transparent display of products being offered and enable comparison among different products, benefiting the consumer,

1.2.5.6 ensure authentication requests for product or services include all applicable IDs, such as IATA number, passengers Frequen t Flyer number, valid email address or any other acceptable form of identification that is flexible to the individual carrier.

1.2.6 All data will be distributed across all channels, subject to the terms and conditions determined by the airline distributi ng the content.

1.2.7 This distribution model assumes that each airline distributing its individual products and services is the owner of its own content.

1.2.8 Product attributes structure should be standardized to facilitate consistent display of the p roduct offer on third party web sites.

1.2.9 Any cost attributable to this new business model, from IT research development to implementation/operation, will not be incumbent on Members who do not wish to adopt it.2. DEFINITIONS

For the purpose of this resolution the following definitions will apply:

2.1 ANCILLARY SERVICES means anything outside of product attributes (optional or discounted).

2.2 AUTHENTICATION means the process by which a system identifies an individual or a business entity to m ake sure that the user or the business entity is who they claim to be, based on attributes that are sent in a message.

2.3 DYNAMIC AIRLINE SHOPPING APPLICATION PROGRAMME INTERFACE (DAS API) means a set of routines, protocols and tools for building softwar e applications capable of processing interactive messages from a requester to an airline rules engine.

2.4 EXTENSIBLE MARK

- UP LANGUAGE (XML) means a simple, flexible mark

- up language which enables the exchange of a wide variety of data on the internet and supports the implementation of a wide range of web services.

2.5 INTERMEDIARIES means any entity that has the capability to interface with an airline’s DAS API (e.g. metasearch engines, distribution channel IT solution providers, travel agents including online agencies, travel management and corporate travel companies, high street agencies, specialist agencies, tour and cruise line providers) and interline partners making a booking request.

2.6 PRODUCT ATTRIBUTES means what is bundled and included in th e fare, e.g.
flat bed seat, in

- flight entertainment, pre

- reserved seating, meals etc.

2.7 PRODUCT OFFER means the response including product attributes and ancillary services capable of being displayed in the requesting system.

2.8 RULES ENGINE means the repository of an airline’s business rules capable of receiving and responding to requests to provide a product offer.3. BUSINESS PROCESS DESCRIPTION

3.1. The Business Process Description comprises the following:

3.1.1 Authenticate and Shop Process Description

3.1.1.1 The authentication and shopping process is a dialogue that is generated from a direct or indirect distribution channel to an airline rules engine via a DAS API to request a product offer from a carrier and will allow such carrier to r espond with the offer based on the information received in the request. The request shall include but

not be limited to:

3.1.1.1.1 data to identify who is making the request where an intermediary is present. Data may include, but not be limited to:

spe cific IATA number (generic numbers shall not be sent), agent’s pseudo city code, electronic reservations service provider number, corporate or group identification, type of trip (e.g. leisure or business).

3.1.1.1.2 data to identify on whose b ehalf the request is being made. Data may include, but not be limited to:

Name/Age/Marital Status, Contact Details, Frequent Flyer Number or Profile number, Customer Type (e.g. adult/child), Travel History, Nationality, Shopping History,

P reviously Purchased Services.

3.1.1.1.3 attributes data for what is requested. Data may include, but not be

limited to:

` Point of Sale, Travel Dates, Origin and Destination,

` Number of Passengers and passenger type, Trip type (e.g. open, round trip, one way).3.1.1.2 Personal information that may be passed will be as bilaterally or multilaterally agreed with due consideration for compliance with all government privacy laws.

3.1.1.3 Upon receipt of a request, the carrier shall respon d with a product offer. The
offer should include but not be limited to:

unique request identifier, a description of the product attributes, a list of optional ancillaries for example, bundle information, name of optional ancillaries, charges,

l ink if applicable, discounts and special offers (optional), product availability warnings (optional), promotional codes and discounts (optional), terms and conditions associated with the offer, expiration of offer.

3.1.1.4 Multiple repetitions of t his dialogue process shall be provided.

3.1.2 Order Process Description

The Order Process is a dialogue that is generated from a direct or indirect distribution channel to an airline rules engine via a DAS API that will confirm the commitment to purchas e. This may also include payment information. The order process will provide the carrier the opportunity to fulfill the transaction, create the booking record, issue the document(s) and respond with confirmations.

3.1.2.1 The commitment to purchase data to enable the booking to be made may
include but not be limited to :

passenger details,

name, address,date of birth, gender, passenger profile information, frequent traveler number,

` special requests, payment information if applic able.

3.1.2.2 upon receipt of an order, if payment information is not received, carriers shall respond with either a request for payment or an option to hold the product offer
either with or without a fee.

3.1.2.3 upon receipt of payment data, carriers will create the reservations records and issue the traffic documents (electronic tickets and/or electronic miscellaneous documents as applicable) and respond with a confirmation. This confirmation should

include but not be limited to:

Ticketing Informatio n and receipts in accordance with the provisions of Resolutions 722f, 722g, 725f or 725g as applicable, Terms and Conditions of the offer, Legal Notices.

3.1.2.4 Carriers, that have confirmed or requested interline space shall ensure that

reservations an d ticketing data is communicated to their interline partners in accordance with the provisions of standard industry messages published in AIRIMP

Passenger and the UN EDIFACT and XML standards as published by IATA under the provisions of Resolution 783.

3. 1.3 Change Process Description

3.1.3.1 The Change Process is a dialogue that is generated from a direct or indirect distribution channel to an airline rules engine via a DAS API that will request a modification, addition, cancellation or refund to an exis ting confirmed order. The request shall include data that enables a carrier to identify the original order. The request shall also include authentication and attributes data as shown in 3.1.1.1.1 through 3.1.1.1.3.

3.1.3.2 Upon receipt of a change reques t, carriers may revise the product offer and respond back to the requestor. Carriers shall respond based on the provisions of 3.1.1.3 or deny the change request.

3.1.3.3 Changes to interline bookings should be effected in accordance with the provisions of paragraph 3.1.2.4.

3.1.3.4 Fulfillment of a revised order shall be in accordance with the provisions of

3.1.2.Attachment A

PASSENGER DISTRIBUTION MANAGEMENT GROUP

1. ESTABLISHMENT OF THE MANAGEMENT GROUP

A Passenger Distribution Management Grou p hereinafter referred to as the Management Group is established for managing the development of passenger distribution processes and standards as published in IATA Resolutions and Recommended Practices, and the development of modern technology messaging

s tandards (e.g. XML) under the provisions of Resolution 783.

The Management Group shall report to the Joint A4A/IATA Passenger Services Conference (JPSC) and shall consist of up to fifteen (15) members appointed by the JPSC. The Management Group shall incl ude representatives from airlines and shall be able to invite other interested parties (e.g. IATA Strategic Partners and all other third party industry stakeholders) as required from time to time to reflect the multi

stakeholder nature of the passenger dis tribution process.

The JPSC will ensure that the membership is so constituted that adequate expertise

is maintained.

2. FUNCTIONS OF THE MANAGEMENT GROUP

The main functions of the Management Group are:

2.1 to review and approve proposed additions, changes an d deletions to the key principles of passenger distribution;

2.2 to manage the development of processes and standards;

2.3 to submit an annual report of its activities to the JPSC meeting;

2.4 to liaise closely with other A4A and IATA Committees impacting on pa ssenger distribution standards.

3. MEETINGS OF THE MANAGEMENT GROUP

3.1 The Management Group shall meet as required but not less than once per year. A quorum shall consist of not less than one

- third of the Management Group

members.

3.2 The Management Gro up shall elect its own Chair

- Person and Vice

Chairperson from IATA and A4A member airlines.3.3 Any IATA or A4A Member who is not a member of the Management Group may attend Management Group meetings and may vote on any issue except the

nomination o f officers.

3.4 Decisions of the Management Group shall be by an 80% positive vote of the IATA and A4A Members present at the meeting and entitled to vote. Abstentions do not count in the voting.

3.5 The Management Group shall determine its own working procedures and may
establish sub

- groups as it determines necessary.

4. AMENDMENT PROCEDURES

4.1 Proposals to amend the passenger distribution standards may be submitted by the passenger distribution sub

- groups, any A4A or IATA Member, or members of the

IAT A Strategic Partners Program.

4.2 The Management Group shall consider all such proposals and shall act upon
them as follows:

4.2.1 Adopt the proposal if accepted by 80% of the IATA and A4A Members entitled to vote on such proposals;

4.2.2 Reject the pro posal;

4.2.3 Refer the proposal to the next Management Group meeting for further review;

4.2.4 If the proposal is in conflict with existing industry standards, refer the proposal to the next meeting of the JPSC for further review and resolution.

4.3 All amendments agreed by the Management Group shall be circulated to all IATA and A4A Members within thirty (30) days of the Management Group meeting.

4.4 In determination of its working procedures, the Management Group may utilize a mail vote procedure to p rogress proposals to amend passenger distribution standards between Management Group meetings. Utilization of the mail vote procedure is limited to amendments of an urgent nature and which are requested by or supported by five (5) or more Management Group members. Adoption of proposals using the mail vote procedure will follow the above amendment procedures.

4.5 Amendments endorsed by the Management Group shall be forwarded to the JPSC for final adoption.5. PASSENGER DISTRIBUTION IMPLEMENTATION M ANUAL

Whilst developing and enhancing the resolutions and messaging standards for the implementation of enhanced airline distribution it is acknowledged that there are a number of items that, whilst not appropriate for inclusion in the resolution text, ar e fundamental to obtaining a clear understanding of how enhanced passenger distribution is implemented.

Further, given the variety of stakeholders, there is significant benefit in documenting various aspects of the overall processes to promote a common un derstanding and standardized approach to enhanced distribution implementation. Consequently the Management Group shall oversee the development of a Passenger Distribution Manual which provides clarifications and explanations of the functions related to

Enh anced Airline Distribution as well as guidelines and best practices in accordance with the requirements as documented in this resolution.

5.1 The Passenger Distribution Implementation Manual shall contain:

• An end

- to

- end Passenger Process,

• A Passenger Pro cess Toolbox covering the end

- to

- end process,

• Recommended Practices,

• Technical Specifications,

• Implementation Guides,

• Templates for Service Level Agreements.

5.2 A new edition of the Passenger Distribution Implementation Manual shall be

issued as and when determined by the Management Group and in consultation with
the Secretariat.

Filing Period: Effective Date: 29 January

- 1 June 2013
18 March 2013

### SUMMARY OF CHANGES

RESOLUTIONS/RECOMMENDED PRACTICES ADOPTED AT:

3 4th PASSENGER SERVICES CONFERENCE (PSC)

INTENDED EFFECTIVE DATE: 1 J une 20 1 3

Below is an extract from the relevant Minutes from the 34 t h meeting of the PSC regarding agenda items P6.6, P7 and P7.1

.

P6.6 Report

– New Distribution Capability (NDC)

29. Mr Eric Leopold, IATA Director Passenger, advised that IATA had formed a new section to drive the establishment of industry standards to support and shape a new airline distribution capability. The new standards will aim to offer more choice, transparency and per sonalization to consumers by stimulating innovation and competition in the distribution space. He noted that airlines could do this quite well today via their own websites but found great difficulty in providing the same experience when selling via third parties. Therefore many airlines wanted to raise themselves to the next level of retailing and merchandising, looking at models such as Amazon.com.

30. He reported that the IATA Board of Governors launched this initiative as one of the 2012 Industry Priorit ies with a goal to first deliver a foundational standard in the form of an industry resolution to provide a high

- level framework for airlines to move to a dynamic content distribution model. This would allow airlines to take advantage of new technologies and start selling their products in a similar way through all distribution channels, whether they
be direct sales (e.g. airline’s own website) or indirect sales (e.g. via a travel agent).

31. Mr Leopold described the high level scope of the new airline distr ibution
model as follows.

• Change how an airline distributes its products and services

• Airline responds with price, constructs the offer and intermediary aggregates

• Collaboration across the industry

– open and transparent process

• The relationship airline

- customer is more interactive

• The airline knows who is requesting the offer

• Offer the ability to sell what airline wants, to who they want, through

more channels

32. He described the industry benefits as follows.

For Passengers :

• Greater transparency of what they are buying

• Ability to compare airline offerings

- different kinds of seats, for example

• Recognition by airlines and potentially preferred and personalized products, prices or availabilitiesFor Airlines :

• Ability to differentiate their product offe rings, gaining value from investment in product quality

• Greater ability to recognize and reward customers

• Increased competition in the area of distribution (system providers which will stimulate further innovation, improving the value offered by

the indi rect channel)

For Travel agents :

• Greater access to airline ancillary products, some of which currently are only available on individual airline websites

• Will have the ability to show, and therefore sell, the value of the proposition, not just standard se ats

• Increased competition in the area of distribution will mean more innovation and more choice for travel agents

• Simplified and quicker shopping and booking process for the end

- to

end journey

33. Accordingly IATA’s initial role would be to bring together airlines, the travel trade, GDSs and other third parties to develop industry standards, starting with the “shopping” experience. He advised that an industry business case and associated 5 year roadmap would be presented to the IATA Board of
Governors in December 2012. Conference noted this report with interest.

P7 Report

– Passenger Distribution Group (PDG)

34. The Secretary reported that the PDG had been established by the PSC in 2011. Since that time, member representatives had been defining the vision of a new distribution capability where requests come to airlines who will respond with an offer for their product. This is considerably different to the existing model where content is “pushed” to systems (e.g. schedules, fares and availability) and the o ffer is created without direct involvement of the

carriers.

35. The rationale behind the new distribution capability is to increase competition, stimulate innovation, reduce distribution costs and improve consumer choice. The PDG had defined a set of key bus iness principles which would allow carriers to more dynamically interact with the customer behind intermediaries in order to provide access to a much wider range of products and services across a much wider number of distribution channel providers where cu rrently they may only be provided through “direct” channels (e.g. airlines’ own websites).

36. The requirement that had been identified was for a foundational standard that gives a clear industry direction on how to approach a more “shopping and comparison” based travel purchase experience that goes beyond the current publication of schedules and fares, and the location of key records such as an airline booking in a traditional reservations and ticketing environment.

37. At the request of the PDG, the first mee ting of the Data Exchange Working Group (DDXWG) had been held during 9

- 13 July in Geneva where business scenarios were explored and some business requirements for data exchange standards formulated. The DDXWG included representatives from airlines, ITsyst em providers, Global Distribution Systems (GDS), Online Travel Agency (OTA) and a Travel Management Company (TMC). Conference was advised that subsequently various webinars had been provided to the industry to provide more detailed information as shown in **Attachment E**

.

38. The PDG therefore drafted a proposal for a new Enhanced Airline Distribution resolution to initially cover only the concept of the business requirement, being a foundational resolution to provide an industry framework for
“authenticated sho pping”. It was noted that Resolution 787 would be a platform to enable further resolutions and messaging standards to be developed as more business requirements are evaluated.

39. AC, AF, AZ, AY, DL, LH and LX voiced strong support for the establishment of Resolution 787. FI urged IATA to ensure that small and medium sized carriers would be encouraged to join in the activities surrounding the development of industry standards regarding Enhanced Airline Distribution. JL advised that they had invested heavil y in the current distribution system and therefore it would be important to ensure that transition to any new distribution system would be on a voluntary basis.

40. Regarding voting for the establishment of Resolution 787, the Chairman saw no opposition from the PSC and noted abstentions from JL and TK. Accordingly Resolution 787 was adopted as shown in the book of finally adopted resolutions & RPs (Part 1 ). The A4A Secretary advised that they will review this at their next meeting of the Passenger Council.

ACTION: A4A Passenger Council

41. Conference agreed to extend the mandate of the PDG for a further 12 months
with terms of reference as shown in **Attachment F**

.

P7.1 Resolution 787

– Proposed Amendment

42. JL proposed to add an extra “key principle” to Resol ution 787 to ensure that

“ a ny cost attributable to this new business model, from IT research development to implementation/operation, will not be incumbent on Members who do not wish to adopt it ”. JL felt that it was important to have this
clarification e nshrined in Resolution 787 in order that airlines not interested in this initiative would not be obliged to convert any of their systems unless they determined there would be an appropriate benefit.

43. Mr Tim Powell (Sabre) noted that whereas it is too early to be able to estimate costs by any individual supplier or airline, implementation is not mandatory as per the opening language of Resolution 787. Accordingly, noting the abstention of HR, the PSC adopted new paragraph 1.2.9 in Resolution 787 as

shown in the book of finally adopted resolutions & RPs (Part 1 ). The A4A Secretary advised that they will review this at their next meeting of the Passenger Council.

ACTION: A4A Passenger CouncilSimplifying the Business 1  COPYRIGHT IATA 2012 

# New Distribution Capability (NDC)
Webinar: Introducing Resolution 787

‘Enhanced Airline Distribution’Simplifying the Business 2  COPYRIGHT IATA 2012 

# Webinar Presented by the NDC

Team

Facilitator: Shaunelle Harris Drake Manager, NDC Implementation

Presenter: David McEwen Manager, Airline Distribution StandardsSimplifying the Business 3  COPYRIGHT IATA 2012 

# Guidelines for Participation

This meeting is being conducted in compliance with the Provisions for

the Conduct of the IATA Traffic Conferences

. Pursuant thereto, this meeting will not discuss or take action to develop fares or charges, nor will it discuss or take action on remuneration levels of any intermediaries engaged in the sale of passenger air transportation

. The meeting also has no authority to discuss or reach agreement on the

allocation of markets, the division or sharing of traffic or revenues, or the number of flights or capacity to be offered in any market

. Delegates

are cautioned that any discussion regarding such matters, or concerning any other competitively sensitive topics outside the scope of

the agenda, either on the floor or off, is strictly prohibited



# .Simplifying the Business 4  COPYRIGHT IATA 2012 

#  Objective

 Introduction and background to NDC

 Some Clarifications

 Benefits the WIN! WIN! WIN! WIN!

 Introducing Resolution 787

 Resolution 787 Highlights

 Introducing Your NDC Team

 Final Thought

 Questions 

# Running OrderSimplifying the Business 5  COPYRIGHT IATA 2012 

#  Provide Detailed Background

 Understand the Issues that are Raised

 Look at NDC, what it is and what we are doing

 Look in detail at the proposed Resolution text

 Opportunity for you to review the proposal

 Ask questions and give feedback 

# ObjectiveSimplifying the Business 6  COPYRIGHT IATA 2012 

# What is Distribution

 How the airline product gets to

their customer

 All the processes are connected

 NDC will first focus on building standards that impact the shopping process 

# Airline Distribution Life Cycle

NDC focuses on this aspect

of the processSimplifying the Business 7  COPYRIGHT IATA 2012 

# Introduction to New Distribution Capability

 What IATA member airlines are saying:

 Need ability to differentiate through innovation and personalization

 Need ability to sell what they want to whom they want through more

channels



#  What is IATA going to do about it:

 Setting Industry Standards to support airline distribution capability

 The new standards aim to stimulate competition, innovation and offer

more choice to consumerSimplifying the Business 8  COPYRIGHT IATA 2012 

# Stakeholder Engagement

 NDC

– A balanced view & value chain collaboration

 Stakeholder engagement

- Collaborative mindset, fully open and
transparent

 Engage all players

 Airlines (IATA members and non

- members)

 System providers

– GDSs and others

 Third parties

– ATPCO, ARC, etc.

 Travel agents

– including TMC and online TAs

 Engage at all levels

 Board

 PDG

 Distribution Data Exchange GroupSimplifying the Business 9  COPYRIGHT IATA 2012 

#  Passenger Distribution Group (PDG )

 Includes Directors Distribution at AC, AZ, UA, DL, AF/KL, BA, LH, LX, KE, CX, SQ

 Initial meeting: 7 th 

## September 2011

 Membership in the group is restricted to airlines



#  PDG unanimously endorsed the NDC model

 Endorsement for model: 18 th 

## April 2012

 There are 8 Key principles

 Stakeholders and landscape for new model

 Message flows



#  PDG created a Distributed Data Exchange workgroup (DDX WG)

 First meeting: July 09

- 13, 2012

 Next meeting: Nov 27

- 30, 2012 

#  NDC Background

- SummarySimplifying the Business 10  COPYRIGHT IATA 2012 

# So... What is NDC About?

Enabling the capabilities that exist on the airlines’ website through Indirect channels

 There are 2 basic requirements

 A standard way of connecting (common API)

 Personalisation through Authenticated Shopping



#  The initial scope is the shopping process

 In tomorrow’s new distribution, airlines will have greater ability to interact with who is requesting and provide tailor

- made product

offers

 Product innovation / Differentiation / PersonalizationSimplifying the Business 11  COPYRIGHT IATA 2012 

# The Problem Today

 Airline pushes the data

– GDS constructs the offer

 Airlines **push** information through 3 rd 

# parties suppliers Distributors

who constructs the final offer

 The “push” has limited **interactivity** with the airlines

 This became obvious constraints with ancillary trend, sophisticated dynamic pricing revenue management and increasing data mining

usage

 N ew technology: more agile, faster and more cost effective

 Lots of noise with several “standard organizations” aiming at re

engineering distribution landscape ( bottom

– up approach )Simplifying the Business 12  COPYRIGHT IATA 2012 

#  It is critical airlines construct/own their product. Need to connect to customers through indirect channels with interactive relationship

 Should use modern messaging. XML based protocols and web services as an example

 Must not to be constrained by backward compatibility with existing legacy messages

 Standards must facilitate authentication of customer identity, enable personalized offers through the whole distribution supply chain

 The new model will be able to cope with changes and support a shopping basket approach (to add and remove product)

 The ways to display product attributes will be standardized to facilitate comparison on sites such as fare comparison sites 

#  Key Principles New Distribution ModelSimplifying the Business 13  COPYRIGHT IATA 2012 

# Airline builds & owns a personalized offer for each consumer

 Airline  Product

 Price and Availability

 Engine  Dynamic

 Airline

 Shoppin

g



###  Interfa

ce 

##  RetailerConsumer 

##  Distributor

 Retailer

 Benefits:

• Bring consistency in price/product offers across the different channels with one industry standard

• Greater access to airline ancillary products which currently are only available on individual airline websites and gain in competitiveness.

• Increased competition in the area of distribution will mean more innovation and more choice for agents

• Simplified and quicker shopping and booking process for the end

- to

- end journeySimplifying the Business 14  COPYRIGHT IATA 2012 

# Areas to clarify

 This is not about by

- passing the GDSs

 This is not about going direct to the Customer

 This not about simply rolling out the Direct Connect concept as it exists in the US today

 This is a top down approach where we will engage all key

stakeholders

 Both distribution models will live side by side for some

considerable timeSimplifying the Business 15  COPYRIGHT IATA 2012 

#  Airlines

 Passengers

 Distributors

 Travel Agents 

# W hat are the benefits of NDC?Simplifying the Business 16  COPYRIGHT IATA 2012 

# Benefits of NDC 1/2

Airlines :

 To bring consistency in price/product offers across the different channels with one industry standard

 Greater ability to recognize and reward customers

 Increased competition in the area of distribution (system providers which will stimulate further innovation, improving the value offered by the indirect channel)

 Simplification of the airline distribution model



# Passengers :

 Greater transparency of what they are buying

 Increased competition by getting access to each carrier’s full offerings, e.g., seat selection, lounge access, wifi , etc.

 Greater personalization and offerings based on authenticationSimplifying the Business 17  COPYRIGHT IATA 2012 

# Distributors

 A wider display of products and services

 Stimulate innovation and offer more choice to consumers

 Flexibility to bring new products to markets

 Ability to facilitate the content to Travel agents

 With one industry standard it enables connectivity to Low Cost Carrier



# Travel Agents :

 To bring consistency in price/product offers across the different channels with one industry standard

 Greater access to airline ancillary products which currently are only available on

individual airline websites and gain in competitiveness.

 Increased competition in the area of distribution will mean more innovation and more choice for travel agents

 Simplified and quicker shopping and booking process for the end

- to

- end journey



# Benefits of NDC 2/2Simplifying the Business 18  COPYRIGHT IATA 2012 

## IATA DG & CEO Tony Tyler

- IATA AGM, Beijing 11 . June 2012

“I have also focused on how IATA can contribute to **greater innovation in distribution** than is currently possible through the GDSs. I understand that airlines cannot afford to miss any more business opportunities while waiting for the GDSs to meet their needs. GDSs and others are of course welcome partners in the process. **Our target is to complete the foundation standard for a new distribution capability for approval during the World Passenger Symposium this** 

**October.** The **new distribution capability** will unleash innovation and new entrants that will revolutionize airline relationships with their customers. In parallel with developing the standard, we are evaluating what other innovations IATA can offer to ensure that we are delivering the greatest value to you in this area .” 

# NDC

– Supported by the BoardSimplifying the Business 19  COPYRIGHT IATA 2012 

# Introducing Resolution 787

‘Enhanced Airline Distribution’Simplifying the Business 20  COPYRIGHT IATA 2012 

#  Based on the key principles agreed at PDG 18 April

2012

 Idea of a DAS API and the infrastructure framework diagram based on a small focus group discussion in February

 The basic business requirements for data exchange standards based on selected output from DDXWG in July

 Definitions to support the text

 Reviewed and endorsed by PDG 11 September 2012 

# The Resolution

– How it was craftedSimplifying the Business 21  COPYRIGHT IATA 2012 

#  Is a foundational resolution to provide an industry framework for ‘authenticated shopping ’

 Becomes a platform that will enable further resolutions and messaging standards to be developed as further business requirements are evaluated

 Covers the business requirements for data exchange

standards 

# The ResolutionSimplifying the Business 22  COPYRIGHT IATA 2012 

#  All product offers (including ancillaries) will be available for distribution through all channels that an airline wishes

to sell them through

 The standard will enable the creation of a Dynamic Airline Shopping engine Application Programme Interface (DAS API) based on IATA XML messages

 The focus of this resolution will describe the main business processes that are required to support it

 Not be constrained by any need to have full backwards compatibility 

# Resolution AdoptionSimplifying the Business 23  COPYRIGHT IATA 2012 

#  Does not obligate any Member to implement this capability if they choose not to

 Members who choose to adopt the capability uses these

standards

 Resolution does not mean industry mandate to do it but more if you decide to follow this business model this is how you should implement it. Systems should also follow

it

 Recommended Practice offers a best practice to implementation



# Resolution Adoption

– what does it mean?Simplifying the Business 24  COPYRIGHT IATA 2012 

# The New Distribution LandscapeSimplifying the Business 25  COPYRIGHT IATA 2012 

# Members and/or systems providers may, for online or interline carriage, provide capability to offer a wide selection of their products and services to
their customers through a wide variety of distribution channels

. Members
and/or systems providers shall apply the following procedures when distributing enhanced content through multiple channels of distribution with

their many partners

.

This resolution recognizes that a standard process is required for airlines

to create their own product offer within their own systems (i

. e

. assemble fares, schedules and availability

- all in one transaction) which will be provided directly by and owned by the airline

. This will enable more agile pricing and more personalized offerings

. In this way, all product offers (including ancillaries) will be available for distribution through all channels

that an airline wishes to sell them through

. 

# Resolution 787 Highlighted TextSimplifying the Business 26  COPYRIGHT IATA 2012 

# Resolution 787 Highlighted Text

 2.1 ANCILLARY SERVICES means anything outside of product attributes (optional or discounted).

 2.2 AUTHENTICATION means the process by which a system identifies an individual or a business entity to make sure that the user or the business entity is who they claim to be, based on attributes that are sent in a message.

 2.3 DYNAMIC AIRLINE SHOPPING APPLICATION PROGRAMME INTERFACE (DAS API) means a set of routines, protocols and tools for building software applications capable of processing interactive messages from a requester to an airline rules engine.Simplifying the Business 27  COPYRIGHT IATA 2012 

#  2.4 EXTENSIBLE MARK

- UP LANGUAGE (XML) means a simple,

flexible mark

- up language which enables the exchange of a wide variety of data on the internet and supports the implementation of a wide range of web services.

 2.5 INTERMEDIARIES means any entity that has the capability to interface with an airline’s DAS API (e.g. metasearch engines, distribution channel IT solution providers, travel agents including online agencies, travel management and corporate travel companies, high street agencies, specialist agencies, tour and cruise line providers) and interline partners making a booking
request. 

# Resolution 787 Highlighted TextSimplifying the Business 28  COPYRIGHT IATA 2012 

#  2.6 PRODUCT ATTRIBUTES means what is bundled and included in the fare, e.g. flat bed seat, in

- flight entertainment, pre

- reserved seating, meals etc.

 2.7 PRODUCT OFFER means the response including product attributes and ancillary services capable of being displayed in the requesting system.

 2.8 RULES ENGINE means the repository of an airline’s business rules capable of receiving and responding to requests to provide a product offer. 

# Resolution 787 Highlighted TextSimplifying the Business 29  COPYRIGHT IATA 2012 

# Resolution 787 Highlighted Text

 3 Business Process Description

 Authenticate and Shop

 a dialogue ..... to request a product offer from a carrier and will allow such carrier to respond with the offer based on the information received in the request.

 Order Process

 A dialogue .... that will confirm the commitment to purchase. This may also include payment information. The order process will provide the carrier the opportunity to fulfill the transaction, create the booking record, issue the document(s) and respond with

confirmations.Simplifying the Business 30  COPYRIGHT IATA 2012 

#  Change Process

 a dialogue .... that will request a modification, addition, cancellation or refund to an existing confirmed order. The request shall include data that enables a carrier to identify the original order.

 Data Elements

 A number of key data elements identified in the business requirements at DDXWG have been included in each process description text that should be included. This is not exhaustive and will be expanded in future workstreams

. 

# Resolution 787 Highlighted TextSimplifying the Business 31  COPYRIGHT IATA 2012 

#  A Passenger Distribution Management Group hereinafter referred to as the Management Group is established for managing the development of passenger distribution processes and standards as published in IATA Resolutions and Recommended Practices, and the development of modern technology messaging standards (e.g. XML) under the provisions of Resolution 783

.

 Proposals to amend the passenger distribution standards may be submitted by the passenger distribution sub

- groups, any A4A or IATA Member, or members of the IATA Strategic Partners Program. 

# Resolution 787 Highlighted TextSimplifying the Business 32  COPYRIGHT IATA 2012 

#  The Passenger Distribution Implementation Manual shall

contain:

 An end

- to

- end Passenger Process,

 A Passenger Process Toolbox covering the end

- to

- end process,

 Recommended Practices,

 Technical Specifications,

 Implementation Guides,

 Templates for Service Level Agreements 

# Resolution 787 Highlighted TextSimplifying the Business 33  COPYRIGHT IATA 2012 

# Next Steps and Future ActivitiesSimplifying the Business 34  COPYRIGHT IATA 2012 

## ä IATA World Passenger Symposium, 16

- 18 October 2012

 New IATA Resolution 787 for airline distribution to be adopted at PSC

October 2012

 Technical messaging standards to be developed (PADIS Board (XML))

 Industry Business Case & Roadmap to be presented to the Board

 Value chain collaboration

 Enable airline product differentiation

 1 st 

## industry pilot in 2013 

# The Future of Airline Distribution

– Next Steps and ActivitiesSimplifying the Business 35  COPYRIGHT IATA 2012 

# Introducing Your NDC TeamSimplifying the Business 36  COPYRIGHT IATA 2012 

# Introducing Your NDC Team

 Claude Muller; Head NDC

 Shaunelle Harris Drake; Manager NDC Implementation

 Cécile Rousseau; Manager Channel Distribution

 Guennadi Klioutchnikov ; Manager Distribution Technical Standards

 Andrei Grintchenko ; Manager NDC StandardsSimplifying the Business 37  COPYRIGHT IATA 2012 

# Final ThoughtSimplifying the Business 38  COPYRIGHT IATA 2012 

#  Questions, Summary, Conclusions ?  Its all Connected Through AutomationSimplifying the Business 39  COPYRIGHT IATA 2012 

# QuestionsSimplifying the Business 40  COPYRIGHT IATA 2012 

# World Passenger Symposium and PSC

15

- 19 October 2012

Abu Dhabi

Further information and assistance
http :// www.iata.org/workgroups/psc
http://www.iata.org/events/passeng

er

- symposium/Pages/index.aspxJPSC/32 PSC/34 Oct 12 Agenda Item: P7 Page: 1 of 2

Subject: Report

– Passenger Distribution Group (PDG)

Submitted by: Chairman, Andrew May (BA)

Background:

The PDG was established by the PSC in 2011 with terms of reference as shown in

**Attachmen t A_P7**  . Member representatives have been defining the vision of a new distribution capability where requests come to airlines who will respond with an offer for their product. This is considerably different to the existing model where content is ‘pushed’ to systems (e.g. schedules, fares and availability) and the offer is created
without direct involvement of the carriers.

The rationale behind the new distribution capability is to increase competition, stimulate innovation, reduce distribution costs and i mprove consumer choice. The PDG has defined a set of key business principles which will allow carriers to more dynamically interact with the customer behind intermediaries in order to provide access to a much wider range of products and services across a m uch wider number of distribution channel providers where currently they may only be provided through ‘direct’ channels (e.g. airlines’ own websites).

The requirement that has been identified is for a foundational standard that gives a clear industry dire ction on how to approach a more ‘shopping and comparison’ based travel purchase experience that goes beyond the current publication of schedules and fares, and the location of key records such as an airline booking in a

traditional reservations and ticketi ng environment.

At the request of the PDG, the first meeting of the Data Exchange Working Group (DDXWG) was held during 9

- 13 July in Geneva where business scenarios were explored and some business requirements for data exchange standards formulated.

The D DXWG included representatives from airlines, IT system providers, Global Distribution Systems (GDS), Online Travel Agency (OTA) and a Travel Management Company (TMC).

In making this proposal for a new ‘Enhanced Airline Distribution’ resolution, it will

co ver only the concept of the business requirement, being a foundational resolution to provide an industry framework for ‘authenticated shopping’. This new Resolution
787 as shown in Attachment B_P7 becomes a platform that will enable further

resolutions and messaging standards to be developed as further business requirements are evaluated.JPSC/32 PSC/34 Oct 12 Agenda Item: P7 Page: 2

This resolution proposal (if adopted) does not obligate any Member to implement this capability should they choos e not to. By documenting a process in resolution it will allow industry to keep costs of implementation down by avoiding individual proprietary solutions whilst allowing innovation, ease of implementation, differentiation and competition. One final and imp ortant point to note is that the new standard(s) should not be constrained by any need to have full backwards compatibility.

This resolution meets the requirements from the IATA Board of Governors who set a priority on the development of “new distribution capability”. This was announced at the IATA Annual General Meeting in June 2012 where it was highlighted during a panel discussion that examined evolving trends in airline distribution in order to try to predict the future and to determine how IATA can h elp shape the future of airline distribution by providing a common infrastructure and standards for consumer
benefits.

Proposed Action:

1. Conference to note the report and extend the mandate of the PDG for a further
12 months with terms of reference as s hown in **Attachment A_P7** ;

2. Conference to establish Resolution 787 as shown in Attachment B_P7

.JPSC/32 PSC/34 Oct 12 Agenda Item: P7
**Attachment: A_P7**  Page: 1 of 1

Passenger Distribution Group (PDG)

Terms of Reference

The Passenger Distribution G roup is established by the Passenger Services Conference (PSC) to with the following terms of reference.

Objectives

• Set a vision for multi

- channel airline distribution

• Validate the strategy and industry business case and requirements

• Act as an industry vo ice on airline distribution

• Define key industry messages for distribution

- related matters

• Review progress of IATA projects in distribution

• Act as a watch group on industry developments

• Be the central provider of industry informational and statistical data

Appointments

• This is a group comprised of IATA member airlines; non

- member airlines may receive a special appointment by IATA SVP IDFS

• Delegates are airline director

- level or above in charge of airline distribution or distribution system strategy; there a re no alternates

• Industry stakeholders may be invited to attend meetings upon invitation by IATA SVP
IDFS

Schedule

• annual in

- person meetings at IATA’s Head (Montreal), Executive (Geneva), or Regional offices

• Regular calls (monthly or quarterly)

• Meeting ag endas shall be circulated in advance of each meeting for review and comments by delegates, the Chairmen of the PSC Steering Group and the StB Steering Group. Minutes shall be taken at each meeting and circulated among the delegates for review, comment, and approval.

Technical sub

- groups 1. The PDG may create technical sub

- groups to address specific issues and business requirements, for example requirements to develop new schemas or rules and tools.
Such sub

- groups will be coordinated with the secretariat of the PSC and/or the Passenger Agency Conference (PAConf).

Administrative

• The PDG will have a one year mandate (renewable as required) and will report to the PSC with any proposed technical improvements, recommendations and an industry standards implementat ion plan.

• During the year the PDG will provide regular progress reports to the PSC Steering Group and the StB Steering Group

• The group will coordinate its activities with other industry groups involved in airline
distribution

• The Secretary is the IATA Dire ctor Passenger ( leopolde@iata.org )