What is the NDC?
NDC consists of a series of XML-based schemas that will enable participating airlines to improve how third parties, including GDSs and travel agencies, search for and book flights.
IATA’s New Distribution Capability will allow the travel industry to transform the way air products are retailed to corporations, leisure and business travellers, by addressing the industry’s current distribution limitations: product differentiation and time to market, access to fuller and richer air content and a more transparent shopping experience.
What changes will the NDC bring about?
The aim of NDC is to enable airlines to offer rich content, such as ancillary services, and personalised offers through travel agents, GDSs and third-party websites.
Currently airlines primarily communicate schedules and the availability of fares to travel agents, through the GDS’s. They have historically not distributed rich content about what they offer or promote new products, except via their own websites.
How will my business change with NDC?
NDC is not just a message standard. It allows airlines to become better retailers, which means expanding distribution channels and products, controlling offers, enabling full transparency of the shopping experience, and product differentiation and in the process unlocking comprehensive retail capability for participating airlines. NDC facilitates the distribution of product offers combined with rich content, to give customers and agents more compelling information to differentiate.
Why should a TMC care about being NDC Ready?
NDC-enabled processes will help provide easier access to all relevant airline fares and products, allow TMCs to search for and book the content through a single GDS screen, and lead to faster transaction times.
NDC’s schemas will allow the airlines that opt to use it, create personalised, relevant offers to travel agencies and their clients via the distribution channels agencies use, such as GDSs.
One of the objectives of NDC is to help travel agencies across all segments – including retail leisure agencies, TMCs, OTAs, and others to possibly become more competitive with airline direct channels.
Providing the right content, in a comparable and controlled way to meet the client need is critical to win and then retain business for the TMC.
In the clients’ eyes it’s not enough to just deliver the content, it needs to be comparable and then overlaid with policy to control the level of choice. These three Cs, Content, Customer and Control, are essential for the TMC to consider for future prosperity, and they are joined by an additional “C” to consider: Commercials. Each of these “Cs” presents increasing challenges for the TMC of today.
Does the NDC spell the end of anonymous shopping?
No, anonymous shopping will still be possible. However, if the traveller agrees, the NDC will facilitate the collection of enough information about the traveller so the airline can identify the traveller and provide a customised offer.
Does the NDC spell the end of the GDS?
Not at all. In an NDC environment, there will be a clear need for an aggregator to organise the requests from travel agents to airlines for offers. This could be filled by today’s GDSs or tomorrow’s new entrants.
Will the NDC offering have the same functionality as the non-NDC offering?
GDSs are working on enhancements that will allow the travel agent to fully service a booking, but there will be differences in the NDC workflow vs the traditional workflow that agencies are used to. Travel agencies will have access to this new workflow as they upgrade their GDS platforms. Several TMC Groups are working directly with GDSs to design a new NDC-enabled platform for travel agencies, others are working on direct connect solutions with airlines.
Will NDC be usable in all GDSs?
This is subject to the airline being NDC ready, but yes, all GDSs are preparing to be NDC ready. Agencies will be able to use their GDS to book airline ancillary products. As NDC-enabled processes are brought to market, NDC providers, which include airlines, GDSs, mid- and back-office software firms, and other travel technology firms, will create ways to present airline products and enable booking via both GDS native displays and through agency desktop applications, which use graphically rich user interfaces.
Will all airlines use the NDC?
Airlines can choose not to implement the NDC model and opt instead to continue to use the existing EDIFACT messaging standard. It’s quite possible that smaller or less profitable airlines will not be able to afford to change their systems and that industry will run with a two-tier booking system for a time. Such a scenario could mean longer transaction and processing times.
What are the benefits of the NDC?
For the travel agent
NDC’s value proposition is focused on its ability to help agencies compete with airlines’ direct distribution channels on a more level playing field.
Today, a travel agent booking a flight is most likely to use the native, or character-based, “green screen” display to search for and book airline ancillaries, because agents find processes in the green screen mode more efficient than those available in the graphical user interface (UI) “agent desktop” displays.
The trouble is, retailing airline ancillary products isn’t as easy or as compelling in the green screen display as it is in a graphically-rich environment like an agency desktop solution. As NDC-enabled processes are developed, NDC providers must create ways to present airline products and offers, and allow agents to search for and book those products in both the “green screen” mode and the more graphically-rich agent desktop UI modes. The newer generation of agency desktops are starting to demonstrate hybrid screen displays mixing both the “green screen” with graphical elements.
In summary:
- Travel agencies will have broader access to special fares and ancillary services, which were previously only available through the airlines’ websites.
- No more ADMs! Since airlines now own the offer, they can ensure that fares are correct, and that should result in a reduction in ADMs.
- Travel agents will be able to work with real-time fare, product and policies information.
- Travel agents will be able to deliver improved comparison capability to customers, based on product and service rather than price only.
- Travel agents will be able to provide personalised service based on customers’ full travel history and preferences, if the traveller chooses to be recognised.
For the traveller
NDC should enable travellers to search and book flights based on what the traveller wants, from a fare that offers just a “seat and seatbelt” to a more comprehensive experience that includes multiple amenities and services.
Business travellers using a TMC should see their negotiated fares and any benefits negotiated between their employers and their preferred carriers. Elite-tier airline loyalty members should see the perks provided as a result of their loyalty status.
NDC should enable more appropriate personalised offers to be made to a traveller, yet will deliver the capability into the market of solutions that are both direct and indirect via agents.
Passengers will also be able to do more transparent comparative shopping. They’ll be able to compare seat size, price and food offering. They can then select the most appealing travel option, based on product quality, service level, schedule and price or what it is they value.
Travellers will be able to view videos and full-colour photos as well as read passenger reviews.
What are some of the challenges associated with the NDC?
Booking changes
It will be difficult for the travel agent to make a change to a traveller’s booking. Airlines will allow refunds or exchanges by travel agencies, but the agency will need to submit a refund or exchange request directly with the airline instead of making the changes in the GDS. This will create a new and perhaps less efficient process.
Implementation challenges
Airlines may choose to use the NDC in some markets or routes and not others. Eg. An airline could implement the shopping and ticketing component of the NDC, but not any of the other functions. This means that each travel agency will need to be able to support a variety of processes and business rules for each airline, contract or market.
Travel agency accreditation
Airlines currently rely on interaction with the GDS to authenticate the IATA accreditation of an agency. If airlines choose to deal directly with the travel agent and bypass the GDS, they will need to maintain accreditation records for all travel agents in order to authenticate and/or approve an agency request.
Billing
Cash and credit cards are both acceptable forms of payment for NDC transactions. Airlines can customise the way they bill for ancillary fees. This could require new processes if the form of payment is cash.
NDC Resources
Videos
IATA: What is NDC?
CAPA: Interview with IATA’s Yanik Hoyle
TnoozLIVE@TTE 2018: Interview with Amadeus NDC-X lead Gianni Pisanello
Sabre: Beyond NDC
Amadeus Blog: what you need to know about NDC
CAPA: Travelport presentation on NDC
Apex Aero: Interview with IATA’s Yanik Hoyle
Amadeus NDC and travel sellers
CAPA: Travelport interview
PhocusWright Executive Roundtable: Airlines – From NDC to LCCs
Articles and Whitepapers
IATA NDC Report
IATA NDC Factsheet
Phocuswire Article
Skift Article
Travelport Resources
Amadeus Article
Sabre Whitepaper
IATA Presentation on NDC
BizCommunity Article
Amadeus infographic
