NEW DISTRIBUTION CAPABILITY (NDC) 607 wholesale and distribution levels10 within the entire value-chain, for pushing out new and “rich” contents that traditional green screen cannot afford to do (or can barely afford to do due to limited capabilities). Traditionally, it is an EDIFACT-based data input protocol, with output protocol individually designed under the infrastructure of each individual GDS. Now, the NDC standardises a set of XML codes as the base language for transmission of data (whether or not through aggregators). On its face, it appears to be classic anti-competitive collusion because NDC removes one parameter of competition – technology. However, on a closer look, it is not an agreement for the standardisation of distribution practices (it would be completely different if all airlines agree to cease using EDIFACT-based GDS). It is not even a “standard-setting” agreement. At its highest, airlines are agreeing on XML as the basal technological language, and agreeing to a set of XML codes for the development of NDC APIs11. How airlines, aggregators and/or agents are to innovate and build an NDC-based interface (called Application Programming Interface, API) by the use of these standardised XML codes depends significantly on the technology and resources they have in research and development. It is clear that Resolution 787 is not an agreement between airlines on using the exact same distribution software/ website/interface for distribution. In fact, airlines are (and have always been) free to develop their own programming codes, whether using XML or other computer languages. From that perspective, standardisation through NDC creates a new playing field on the manufacturing and wholesale level of the supply value-chain, where airlines compete on (a) system and interface design i.e. how they are to connect and interoperate with downstream distributors and retailers, and (b) the travel product itself, because an NDC-based API can make available rich contents, i.e. a greater variety of options to consumers beyond using green screens. This in turn drives airlines to improve on their core product. In short, the introduction of this “new”12 standardised codes will heighten competition on both distribution practices, technology and product. 10 Theoretically it could extend to the retail level facing end-consumers directly. 11 NDC by its nature bear some similarity with standardising a UNIX interface in X/Open Group OJ [1987] L35/36, but X/Open Group is highly distinguishable since the restrictive effect on competition found in that case stemmed primarily from the membership system (see paras 32-34), whereas Resolution 787 is an agreement comprising of all airlines. 12 As how IATA has named it, despite XML being in fact an aged Internet language.
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