Demystifying IATA’s NDC: Study’s Key Findings

The debate around IATA’s New Distribution Capability (NDC) has been given a new dimension with today’s release of the NDC: Travel Agencies’ Enabler to Success report; the result of a global study conducted in conjunction with a number of member associations of the World Travel Agents Association Alliance (WTAAA), including ASATA.

Funded by IATA and undertaken by T2Impact and Atmosphere Research Group, the study reveals the views of global travel agents with regards to changing air travel search behaviour, the role that NDC will play within this and its impact on the travel trade.

The reports key findings are:

Travel agencies use a diverse mix of channels to book clients’ flights

As airlines have evolved what they sell, and how they sell it, agents have adjusted. Although GDSs remain the predominant channel agencies use to book airline reservations, on average, a travel agency in the survey books 26% of its air reservations outside the GDS.

Airline product complexity influences agency booking behaviour

Agents have had to respond to airlines’ evolving product strategies. To be competitive and serve a diverse mix of travellers, airlines have introduced a variety of products to the marketplace. Two categories, “Branded Fares” and airline ancillary products have influenced airline distribution strategies. For example, airlines may offer all of their optional ancillary products through their websites, but the GDSs may carry only a portion of these. To serve their clients, travel agencies use airline websites and other channels to book these products. A majority of agents in the study feel that airline websites have an advantage over GDSs in terms of content, and view the booking channel fragmentation as counterproductive.

NDC-enabled processes must be usable in multiple GDS environments

Agencies are more likely to use the GDS native display, also known as “green screen”, to book airline ancillary products than other channels. Fifty-four percent of the travel agencies in the study use the native display to book ancillaries, ahead of agency desktop solutions (44%) and proprietary agency solutions. 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, must 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.

Travel agents express limited awareness of NDC

Although NDC has been discussed extensively in travel trade press and elsewhere, more than half (53%) of the agencies in the survey said they hadn’t heard of NDC before they took the study.  It will be very important for each NDC provider to deliver a singular view of what NDC is, what it means, and what its value is to each of the respective stakeholder communities.

Agencies are optimistic about NDC

In spite of agencies’ limited awareness of NDC, they show considerable interest in the programme. Why? Agencies want better access to airlines’ complete catalog of fares, products and offers – and they believe NDC-enabled processes will help them achieve that. Agencies believe NDC-enabled processes will help provide easier access to all relevant airline fares and products, allow them to search for and book the content through a single GDS screen, and lead to faster transaction times.

Agencies want to be positioned for success using NDC

As a new and somewhat unknown series of processes and solutions, agencies want to be sure that NDC providers will create effective “onboarding” programmes as they begin to use NDC-enabled solutions. In the survey, agencies’ primary concerns about NDC are the costs to support NDC implementation, employee training to use NDC-enabled processes, possible added booking complexity associated with using NDC-enabled processes to search for and book flights, and ongoing product and technology support. Even though much of NDC will operate on the back-end, invisible to agencies or their clients, agencies deserve the support of the NDC provider community to ensure they are equipped withthe tools and training needed to use NDC effectively and fully.