IATA Counts Seven, Names None

Eric Marketts

Welcome to the V1 Airline Retailing Report. I'm Eric Marketts.

Steph Nell

And I'm Steph Nell.

Eric Marketts

If you're new, here's the deal. Every week we take the news on how airlines sell, explain how it works, and then argue about what it means.

Steph Nell

Mostly the arguing.

Eric Marketts

Mostly the arguing.

Eric Marketts

And this week, the airline industry got a motto. IATA the airline industry association, held its big finance and passenger symposium in Macao. And its interim director general, Sandrine Le Borgne, said this. Quote. Offers and Orders are the foundation. AI is the accelerator.

Steph Nell

It's a good line. Somebody's going to put it on a mug.

Eric Marketts

Somebody's already ordered the mugs.

Steph Nell

I hope they ordered them as an Order. Not a ticket.

Eric Marketts

For anyone new, that joke will make sense in about five minutes. Trust us.

Steph Nell

It's a slow-release joke. Like most airline jokes.

Eric Marketts

Three stories. First, IATA says seven airlines are now live or implementing Orders, which is the new way of recording what a customer bought.

Steph Nell

Seven airlines. Names given, zero.

Eric Marketts

Second, Amadeus, one of the three big companies whose systems travel agents use to find and sell flights, signed an agreement with NVIDIA, the chipmaker. They want to test whether NVIDIA's chips can make flight search faster, because AI assistants are searching more than ever.

Steph Nell

Cost published, also zero.

Eric Marketts

And third, three low-cost airlines signed up with Amadeus in twenty days. Air Arabia, Salam Air and Wizz Air.

Steph Nell

And none of the three announcements we read gives a fee or mentions NDC, the airline industry's newer standard for selling flights with all the extras. We'll explain why that second part matters, and why it doesn't mean what it sounds like.

Eric Marketts

So. Big claims all week.

Steph Nell

Seven airlines with no names. A computing problem with no price tag. Three deals with no terms. Let's start with the seven.

Eric Marketts

Okay, I owe the listener a joke explanation. Steph, what's an Order, and what's wrong with a ticket?

Steph Nell

Start with how a flight booking works today. It rests on two old records. The first is the PNR, which stands for passenger name record. It's the reservation. Who's flying, on which flights. The second is the ticket. That's the proof you paid and your right to fly. And extras, like a bag or a seat, often get separate documents on top.

Eric Marketts

So one trip is a little stack of records that all have to agree with each other.

Steph Nell

Electronic records, but yes. And when they don't agree, somebody at an airport counter is having a bad afternoon.

Eric Marketts

Usually me.

Steph Nell

Usually you. An Order replaces that stack with one record of everything you bought. Flight, seat, bag, lounge. One place, the way an online store keeps your order. IATA's standard for that record is called ONE Order, with ONE in capital letters, which sounds exactly like the normal words and helps absolutely nobody.

Eric Marketts

Great branding. So why has the ticket lasted this long?

Steph Nell

Because the money moves on it. Settlement, which is how the cash gets from the travel agency to the airline after the sale, runs on tickets. We covered this in Episode 18, our August episode on what "live" really means. IATA approved settlement with Orders back in 2019, and it was still piloting. The ticket isn't welded to the money forever. It's just what the money uses today.

Eric Marketts

And how long has this been the plan?

Steph Nell

ONE Order launched in 2016. And in December 2022, IATA set up a program called Modern Airline Retailing, with a goal it calls 100 percent Offers and Orders.

Eric Marketts

2016. So we're coming up on ten years.

Steph Nell

Which is why a count matters. Go ahead.

Eric Marketts

IATA's release on October 28 says seven airlines are live or implementing Orders, and more than 20 are expected to follow from 2027. Technology providers, the companies that build airline systems, have committed more than 1.7 billion dollars to Offers and Orders. And Le Borgne said finance has to be designed in from the start. Reconciliation, settlement and revenue accounting, built in, not added later.

Steph Nell

Translate those three, because they're the boring words that decide everything. Reconciliation is making sure every record agrees. Settlement is the money moving. Revenue accounting is the airline booking that money as earned. If those still run on tickets, you haven't replaced the ticket. You've put a nicer front door on it.

Eric Marketts

Hence the mug joke.

Steph Nell

Hence the mug joke. Funnier now, right?

Eric Marketts

It's more... informative now.

Steph Nell

I'll take informative.

Eric Marketts

One more number. IATA says airlines spend more than 24.5 billion dollars a year just processing payments.

Steph Nell

Which is why a finance chief keeps turning up in a retailing speech. IATA's point is that every new way to pay changes cost, cash flow and risk. Translation. Somebody in accounting has to reconcile every shiny new wallet app.

Eric Marketts

Okay. I'm going to argue this is good news, and I mean it. For years this program was vision statements. Now IATA puts a count, a dollar figure and a date on the table. And 1.7 billion dollars committed is not slideware. Nobody commits that kind of money to a slide.

Steph Nell

Funny you should say slideware.

Eric Marketts

Oh no.

Steph Nell

In that same Episode 18, the one on what live really means, we went through an IATA survey deck. The airlines that answered were fourteen members of IATA's Consortium, its group of the airlines furthest along on this. They rated their technology providers' readiness. Zero percent said operational and proven. And twenty-nine percent said, in IATA's own wording, mainly vision and slideware.

Eric Marketts

That was a survey. This is money.

Steph Nell

This is committed money. Not spent money. The release doesn't say over what period, who committed it, or how it splits. In this industry, committed can mean a signed contract or a very enthusiastic press release.

Eric Marketts

You're doing the thing.

Steph Nell

I'm doing the thing. Somebody has to.

Eric Marketts

Fine. Then take the seven airlines. Seven is real.

Steph Nell

Read the exact phrase. Live or implementing. Those are two different states. Live means customers buying through Orders today. Implementing means a project, which could be a year or more from a real customer. IATA puts both in one number, and neither the release nor the speech names any of them.

Eric Marketts

To be fair, if they named them, you'd go check every one.

Steph Nell

Every one.

Eric Marketts

So maybe that's why they didn't.

Steph Nell

Eric. Are you suggesting the airline industry would avoid publishing a number because somebody might check it?

Eric Marketts

I'm suggesting I've met the airline industry. But here's my serious point. Calling an airline live too early is worse than naming nobody.

Steph Nell

That's fair, and it's exactly what we found in Episode 18, our live-versus-pilot episode. The airline everyone holds up as the flagship for Offers and Orders was selling its new products on a portal its own executive called a pilot. So I'll give you that one. Unnamed beats wrong.

Eric Marketts

Write that down. Steph conceded.

Steph Nell

It happens every few years. Like a transit of Venus.

Eric Marketts

So give me the bull case properly.

Steph Nell

The bull case. IATA is finally publishing a count, a spending figure and a timeline, and it's naming the right problem. Orders don't stall on the shopping screen. They stall in the back office, where the money gets matched up. Saying finance has to be built in from day one is the lesson the early movers learned the hard way. And if more than 20 airlines really move from 2027, that's when the technology providers stop building for a handful and start building for a market.

Eric Marketts

And the bear case.

Steph Nell

Seven is an unnamed number that blends production with projects. Committed isn't spent, and there's no period or breakdown. More than 20 from 2027 is a forecast, from a program whose central standard launched in 2016. And the same release calls AI agents an opportunity and a risk, and puts no number on the risk. That's the pattern we've followed for weeks with airline AI terms. The warning comes with no price.

Eric Marketts

Critical take.

Steph Nell

A scoreboard without names isn't a scoreboard. In Episode 21, when Delta said it would launch NDC servicing first, we called that a testable claim, not a proven one. Same standard here. Seven is a claim until we know who they are, and which of them a customer can buy from today. Our guess, and it is a guess, is that the list includes airlines we've talked about before, like Finnair or Riyadh Air. IATA doesn't say.

Eric Marketts

So if you sell or buy air travel, here's your homework. Ask your airlines. Are you one of the seven? And are you live, or implementing?

Steph Nell

And if they say implementing, ask one more question. When can a customer buy something? That's the date that matters.

Eric Marketts

Story two needs a term before the news. Look-to-book.

Steph Nell

Look-to-book is how many searches it takes to get one booking. Every search costs computing power. Only the booking pays.

Eric Marketts

So a lot of window shopping.

Steph Nell

A lot of window shopping, and somebody pays for the lights. In Episode 15, our episode on two hundred thousand searches for one ticket, we walked through the estimates. In the early online era, an airline saw something like one hundred to two hundred searches for every ticket it sold. Today it's closer to ten thousand to twenty thousand. And OAG, a flight data company, projected two hundred thousand for a world where AI agents do the shopping.

Eric Marketts

Two hundred thousand searches. One ticket.

Steph Nell

That's why airlines care. Lufthansa Group actually writes a limit into its terms for sellers who use its NDC connection. Past five hundred searches per booking, it can switch off your access. That's in its published terms, and we covered it in Episode 17, our episode on what Lufthansa charges for access.

Eric Marketts

So that's one answer to the flood. Put a cap on it.

Steph Nell

Answer one. Cap it. Answer two, we covered in Episode 22, our episode on airline offers being saved and reused. Save the answers. A cache.

Eric Marketts

The price list.

Steph Nell

The price list. Picture a printed price list taped to a shop counter, versus phoning the supplier every time a customer asks. The list is fast and cheap. It's also only as fresh as the last time somebody printed it. Sabre and Amadeus both run versions of the price list. Amadeus even published the volumes that made it build one. Up to 400,000 shopping requests per airline.

Eric Marketts

And answer three is this week.

Steph Nell

Answer three. Make the phone call faster.

Eric Marketts

Which brings us to chips. On October 21, Amadeus and NVIDIA signed a memorandum of understanding. That's an agreement to explore, not a contract to buy anything. It extends work they'd already started. Three areas. Speeding up flight search with NVIDIA's chips. Travel-specific AI models, which Amadeus says are being assessed, not built. And running its cloud computing more efficiently.

Steph Nell

Quick one on the chips. NVIDIA makes G-P-Us. Graphics processing units. They were built to draw graphics, and it turns out what they're really good at is doing thousands of small calculations at the same time.

Eric Marketts

So the chips that draw dragons in video games are now pricing my checked bag.

Steph Nell

Some would argue the dragons were the easier problem.

Eric Marketts

And why does flight search want that?

Steph Nell

Our explanation, not Amadeus's. A flight search is a pile of combinations. Routes, flights, fares, rules, extras. A G-P-U can check a lot of combinations at once instead of one after another. Amadeus says it's already used NVIDIA's programming toolkit, called CUDA, to rework one part of its search so many calculations run simultaneously. And it ran early tests on two recent NVIDIA chip platforms, called Hopper and Blackwell.

Eric Marketts

And the results?

Steph Nell

In Amadeus's words, promising potential for response times and scalability.

Eric Marketts

That's not a number.

Steph Nell

That's not a number.

Eric Marketts

And why now? Amadeus actually says why. AI assistants increasingly search on behalf of travelers, and that's changing the volume and the complexity of search. Lutz Vorneweg, a senior vice president at Amadeus, said maintaining fast, accurate and bookable flight search at global scale requires new approaches.

Steph Nell

Hold on to "bookable." That's the word doing the work. A fast answer that you can't actually book is just a very confident guess.

Eric Marketts

Okay, here's my problem with this. Who pays? G-P-Us aren't cheap. If AI shoppers are driving the search volume up, somebody's paying for the computing.

Steph Nell

I'm going to defend Amadeus here.

Eric Marketts

You? Defending a press release?

Steph Nell

I'm defending the engineering, not the press release. Give me a minute. If the search volume really is heading where OAG projects, there are only three moves. Cap it, save answers, or make each live answer cheaper to produce. Capping it annoys your customers. Saving answers risks a price that's stale by the time you book. This is the third move, and it's the only one that keeps the answer live.

Eric Marketts

So that's the bull case.

Steph Nell

That's the bull case. It's the right problem. It protects the one thing a big distribution company still owns, the shopping step. And Amadeus is testing before it promises anything, and it says so. I'd rather read "we're exploring" than a fake benchmark.

Eric Marketts

Fine. Now me. The bear case.

Steph Nell

Go.

Eric Marketts

It's an exploratory agreement with no latency number, no search volume, no cost, no G-P-U count, no date. It doesn't even say whether Amadeus is renting the computing, buying it, or owning it. And computing is a cost that grows with traffic. If AI traffic grows, that cost has to land somewhere. Airlines, travel sellers, somebody.

Steph Nell

Label that last part. Amadeus says nothing about fees. Who pays is our question, not their answer.

Eric Marketts

Labeled. It's our question. It's a very good question.

Steph Nell

It's a great question. It's been our question since Episode 8, back in June, when we first asked what all that machine searching costs. Critical take?

Eric Marketts

All yours.

Steph Nell

Put the three answers side by side. Lufthansa caps the searches in its terms. Sabre and Amadeus save answers in a cache. And now Amadeus is testing chips to make the live answer cheaper. Three different answers to the same flood, and all three exist for the same reason. Machines shop far more than people do, if those estimates are anywhere close. Amadeus has now said in its own release that AI assistants are driving its search growth. What nobody in this story has published is the price. What does one machine search cost, and who pays for it? A vendor has named the cause. Still nobody's named the price.

Eric Marketts

So if you're an airline, here's your question for your distribution partner. When the AI traffic doubles, whose bill is it?

Steph Nell

And get the answer in the contract. Not the press release.

Eric Marketts

Last story. Steph, set up low-cost airlines for anyone who hasn't lived in this world.

Steph Nell

Many low-cost carriers built their model on selling direct. Their own website, their own app. Travel agencies sell through a GDS, a global distribution system, which is the big marketplace system travel agents use to search and book. Amadeus is one, Sabre and Travelport are the others. Using a GDS costs money, so plenty of low-cost airlines stayed out.

Eric Marketts

And Wizz Air is the classic example?

Steph Nell

Aviation Business News put it this way. Wizz has historically relied mostly on its own website and app, to keep distribution costs to a minimum. That's the trade press's description, not the airline's.

Eric Marketts

So what changed?

Steph Nell

Wizz's own announcement points at one reason. Business travel. Companies book through travel agencies and booking tools. If you're not in the system, you're not on the screen. So low-cost airlines want the reach without taking on the full machinery.

Eric Marketts

Which brings us to ticketless.

Steph Nell

Remember the ticket from story one? Many low-cost airlines don't issue the traditional kind. Amadeus has a product called Ticketless Access, which puts their flights on the travel agent's screen next to the full-service airlines, without the traditional ticket. And it isn't new. Trade coverage of it goes back more than a decade, to at least 2013.

Eric Marketts

A ticketless ticket.

Steph Nell

It's the airline industry. We name things the way other people name boats.

Eric Marketts

Now, the news. Three airlines in twenty days. On October 2, Air Arabia, a low-cost group in the Middle East and North Africa, announced a distribution deal with Amadeus. We covered that in Episode 25, our Air Arabia episode. Its announcement said the deal used something called light ticketing, and didn't define it.

Steph Nell

I'm still a little sore about light ticketing... What does that even mean?!?!

Eric Marketts

On October 20, Salam Air, a low-cost airline from Oman, signed with Amadeus. Its release says travel sellers on the Amadeus platform get access to its fares and services. It doesn't name markets, fees or dates. And it doesn't say ticketless or NDC.

Steph Nell

And here's a small thing I noticed. The same Amadeus executive, Maher Koubaa, is quoted in both the Air Arabia and the Salam Air announcements. He's having a busy month.

Eric Marketts

And October 22. Wizz Air. Amadeus says Wizz's flights and fares will be available on its platform for the first time, through Amadeus Ticketless Access. Fares, bundles and extras, for travel management companies, travel agencies, online travel agencies and tour operators. And it says corporate travel buyers can reach Wizz through the tools they already use. In what it calls selected markets.

Steph Nell

Which markets?

Eric Marketts

Selected ones.

Steph Nell

Ah. My favorite market.

Eric Marketts

Elena Avila, who runs travel distribution at Amadeus, said the deal expands choice for travel sellers and simplifies access, in what she called a fragmented distribution landscape.

Steph Nell

So Wizz gives a name to the thing Air Arabia's announcement left vague. That's new. We just don't know if light ticketing and Ticketless Access are the same product.

Eric Marketts

Now explain the NDC part, because that's the bit that sounds bigger than it is.

Steph Nell

NDC is the newer airline standard, from IATA, that lets an airline send a seller a full offer. Not just a fare, but a fare, a bag and a seat, priced as a package. And the reason it exists is written in IATA's founding resolution for it. The standards are needed, quote, so an airline can give an intelligent response for all products based on who is asking. Who is asking is the whole idea.

Eric Marketts

And a deal like Wizz's?

Steph Nell

A GDS reach deal puts your flights in front of the sellers. An NDC deal changes what you can send them. Different things. An announcement can do one without the other.

Eric Marketts

Okay, my turn to be the optimist. This is a win. A travel manager at a mid-sized company has been stuck with travelers booking Wizz on their phones, outside the company's tools. Now the cheap fare shows up in the tool. The agency can sell it. The company can track it. Everybody's happier.

Steph Nell

Shows up isn't the same as the same shelf. Does the agency get the same fares as Wizz's own app? The same bundles? Can it change the booking or refund it, or does the traveler end up calling the airline anyway? None of the three announcements says. And ticketless listings have a history of lagging the airline's own app on servicing and extras. That's a question to ask, not a finding.

Eric Marketts

Fair. But it's a start.

Steph Nell

It's a start. And honestly, we know why they're doing it this way. These airlines are dodging NDC because...

Eric Marketts

Careful.

Steph Nell

What?

Eric Marketts

That's the line we said in Episode 25 we can't say. The announcement not mentioning NDC isn't proof of anything. A press release leaves things out.

Steph Nell

...You're right. Withdrawn.

Eric Marketts

That's two concessions in one episode.

Steph Nell

Don't get used to it. Venus is very busy this week.

Eric Marketts

Bull case, properly.

Steph Nell

The bull case. Airlines that built their business direct are getting agency and corporate reach without building a sales force. The seller books inside the tools it already uses. And Wizz says outright that corporate buyers are a target, which is where the travel money that's harder to reach actually sits.

Eric Marketts

Bear case.

Steph Nell

These are announcements, not flights you can book today. No go-live dates. No markets named. No fees. No statement that the agency gets the same fares and extras as the airline's own channel. Reach without the same shelf is a listing, not a channel.

Eric Marketts

Critical take.

Steph Nell

Three airlines in three weeks, one distribution company, and the three announcements we read share two silences. None says NDC and none states a fee. That makes this a reach story, which is the same call we made on Air Arabia in Episode 25. What's new is the count, and that Wizz named the mechanism. What we won't say is that these airlines are choosing ticketless to avoid NDC. No source says that.

Eric Marketts

And no Steph either. Anymore.

Steph Nell

And no Steph either. The thing to watch is the same one from Episode 26, our episode on airlines launching NDC through aggregators. The first published fee, or a statement that the agency gets the same fares as the airline's own app.

Eric Marketts

Bottom line. IATA gave us a motto and a count. Offers and Orders are the foundation, AI is the accelerator, and seven airlines are live or implementing.

Steph Nell

With no names attached.

Eric Marketts

Amadeus says AI assistants are driving its search growth, and it's testing chips to keep up.

Steph Nell

With no cost attached.

Eric Marketts

And three low-cost airlines took the reach.

Steph Nell

With no terms attached. Four things to watch. The names behind IATA's seven, and which ones are actually live. Any cost or volume number from the Amadeus and NVIDIA work. The first fee or fare-parity term on one of these low-cost deals. And still open from the last few weeks, the first airline to publish a price for an AI agent's search.

Eric Marketts

And for anyone new to this industry.

Steph Nell

When somebody announces progress, look for three things. A name, a date and a price. If one of them is missing, that's usually the story.

Eric Marketts

We have no corrections this week.

Steph Nell

Which means we're due.

Eric Marketts

Before we go, some news of our own. We're proud to announce that the V1 Airline Retailing Report is now available on Amazon Music and Audible. So listen on your favorite platform. Apple Podcasts, Spotify, YouTube, and now Amazon Music and Audible. And please like, follow and subscribe. It really does help the show grow.

Steph Nell

Five platforms. Still no price per AI query. But five platforms.

Eric Marketts

Sources for every story are in the show notes. If you think we got something wrong, or you know who IATA's seven are, find us at v1advisory dot co.

Steph Nell

Especially the seven. I'm genuinely asking. The V1 Airline Retailing Report publishes every Monday. I'm Steph Nell.

Eric Marketts

And I'm Eric Marketts. Stay sharp out there.