NDC and the opportunities ahead

Year 2021 marks a milestone in the industry’s NDC. It’s an exciting time to be involved in airline distribution and there is an opportunity to transform the indirect distribution channel to be more effective, less complex and better able to deliver on the needs of travellers and the industry today.

To build a more responsive and agile industry capable of meeting the changing needs of travelers, IATA’s New Distribution Capability (NDC) is proving to be a foundation for digital retailing across the sector. Some are unclear about the impact the pandemic is having on the progress of NDC. However, a new report from Amadeus provides visibility on the standard’s readiness across the industry. Insights from airlines, travel agencies and corporations, as well as Amadeus’ own experts demonstrate that NDC momentum has accelerated over the past 18 months, concluding that 2021 is the year that NDC is being adopted at scale.

Airlines have begun to make tailored offers available, to experiment with innovations like ‘continuous pricing’ and new types of bundled offers. Travel sellers of all shapes and sizes are now going live across the world, with over 2,500 travel agencies across 50 markets are now able to book and service airline content via NDC.

The technology underpinning NDC has advanced significantly.  Travel sellers are now able to consume NDC and EDIFACT content, alongside LCC content delivered via APIs. Importantly, the report cites recent improvements in servicing and preparation of travel agency mid- and back- office systems as key to scaling over the coming months and years.

ÁngelGallego, Executive Vice President, Travel Distribution, Amadeus, had this to say on the findings in the report: “If we compare where we were 18 months ago to today, it’s clear that despite the strain caused by COVID-19, the industry has not sacrificed its commitment to NDC. On the airline side, we are now seeing new differentiated product bundles and price points. It is encouraging to see that the industry increasingly views NDC as a key pillar of recovery. With modern digital retailing, travel will be based around dynamic offers and this will deliver a competitive edge to airlines and travel sellers that embrace this change. Now is the time to engage with NDC to power great journeys for travelers and rebuild travel.

The report also sheds light on some of the remaining barriers to widespread NDC adoption, which include the need to upgrade airline systems, embrace a common NDC standard, and the transformation of mid- and back- office systems for travel sellers.

The report calls on the industry to prioritise collaboration and experimentation to advance NDC adoption.

The success of NDC remains dependent on the industry’s ability to keep talking. Through greater collaboration, it will be easier to recognize each other’s challenges and interests, helping to align goals and deliver the end-to-end value the entire ecosystem expects.

NDC represents a key pillar of the airline industry’s digital transformation, modernising the way airlines create and present tailored offers to different traveller segments. It’s an exciting time to be involved in airline distribution and there is an opportunity to transform the indirect distribution channel so it is more effective, less complex and better able to deliver the needs of travellers and the industry. It’s understood, there are still some issues to overcome around servicing, integration and lack of standardization to obtain the full benefits of NDC. NDC is a journey, and working together with the industry we will not only overcome these issues but unlock possibilities to improve travel retailing.

COLLABORATION IS KEY

Achieving the benefits and overcoming the barriers identified within this report require one trait above all: collaboration. As long as all stakeholders collaborate together and recognize each other’s challenges and interests, we can align goals and deliver the expected end-to-end value. Following a series of interviews with experts from airlines, sellers and corporations, general consensus emerged on the next steps needed to further accelerate NDC.

Until this point NDC has been in the ‘early adopter’ phase as interested airlines, travel sellers and corporations have worked to achieve live NDC bookings. The content, technology, understanding and commercial agreements around NDC have now advanced. Over the coming months, extensive NDC deployment is expected so commitment to NDC is critical as failure to prepare people, processes and technology could see some participants left behind.

EXPERIMENT

New airline content is now coming with new shopping and servicing experiences for travel sellers. Now is the time to ramp up NDC experimentation to understand how digital retailing can improve the travel experience and the bottom line. By trying new offers, analysing the impact and refining flows and processes, NDC delivers an innovation playground the industry hasn’t had before. It is critical to start working with NDC by testing and learning to obtain the maximum benefits from NDC.

KEEP TALKING

Airlines need to know what offers travellers want. Travel sellers need to discover what airlines will bring with NDC. Technology partners need to understand the issues travel sellers face when delivering for airlines. It’s only through dialogue and partnership that the industry will achieve the maximum benefits from investments in NDC.