Opinion: The NDC explained – what does it mean for travel buyers?
17 Aug 2018 - by Euan McNeil
The global buzz around the NDC (New Distribution Capability) is getting louder by the day, as corporate travel buyers increasingly agree that it is ‘a positive thing’ for the travel industry. New research from the Business Travel Show reveals that one in five buyers (18%) believes the NDC offers more transparency with pricing.
Although a lot of noise has been made around how this new set of rules by the International Air Transport Association will ‘facilitate’ communication between travel agents and airlines, why should the corporate travel buyer care about this?
The short answer is: because it will offer you quite a few benefits.
An easier way to book low-cost carriers
The rise of low-cost carriers, which were traditionally outside the GDS, have seen travel managers lose visibility and control of a growing proportion of their air spend. The NDC could help in this regard.
Iata explains that for low-cost carriers with no GDS presence, NDC will enable such a carrier – which today only sells direct to the customer – to sell via TMCs, using technology compatible with their website.
Offers tailored to travellers’ preferences
With NDC, travel buyers can choose to save their travellers’ information to their personal profiles. By saving this information, travellers will have the benefit of being able to customise their search results on the corporate booking tool.
For example, WiFi on the aircraft could be included in the company’s corporate agreement with the airline, while for the leisure traveller, WiFi will cost an additional R150 on the same flight. The different pricing results will immediately be reflected on the NDC results, giving both the traveller and the travel buyer a more accurate overview of what they can expect to pay.
Thanks to the NDC, airlines will also be able to access any personal information the customer is willing to share to construct an offer tailored to that specific client. Take, for example, Lufthansa. The airline could send the traveller an offer for a Bavarian brewery tour if they have a long stopover in Munich.
A faster service from your TMC
For the TMC, the new communication standard means they can pay for a preferred seat, add additional baggage or re-order catering through any GDS they are using instead of having to book this on the airline’s website.
Right now, if travellers want to book pre-boarding or pre-pay for their luggage with the TMC, the consultant has to leave the GDS. With NDC, consultants will be able to shop for all these services in a single transaction in one place.
For travellers, this means that their travel consultant will be able to offer them a lot more options in a more efficient way, whether they would like extra leg-room, extra baggage, comfort class upgrades or special meals.
A visual representation of what to expect
Hesitating whether that extra leg-room is worth the splurge? Since NDC is based on a high-quality XML standard, travellers and travel buyers will both have access to a rich content experience with pictures and videos. That means that you can see exactly how much extra space you are actually buying. It also makes it easier to compare several items (and airlines) at once.
For the travel buyer, the visual representation means it becomes easier to communicate with the company’s employees about product differentiation beyond price and schedule.
The ability to compare apples with apples
It can sometimes be hard to understand exactly why your TMC advises you to pay more for a flight that leaves at about the same time and follows the same itinerary.
Why would the traveller fly Air France instead of British Airways for example if they’re headed to Brussels? One will take them via Paris, the other via London, but other than that, what’s the difference?
Thanks to the NDC, the TMC can show the traveller what the seats on their chosen airline look like, and help travellers compare what they can expect from the lounge and what mileage they earn on each airline.
If it’s that great, why isn’t everyone jumping on the NDC bandwagon?
Firstly, the NDC implementation doesn’t come cheap. The technology is expensive and it’s not a mandatory requirement for any airline or travel agency.
The NDC is not a uniform technology either and can look different from one organisation to the next. There are different versions of the NDC as well as different levels.
How about the surcharges airlines have started charging?
A number of airlines have started charging fees for bookings made in the GDS, instead of through their own channel or through the NDC. Among these are Lufthansa, British Airways, Iberia Airlines, and Air France KLM.
The Flight Centre Travel Group has signed multi-year distribution deals with most of these airlines to eliminate the booking surcharge.
Further good news is that the three main global distribution systems – Amadeus, Travelport and Sabre – have all decided to get on board with NDC capability.
The reality is that the NDC could have profound effects on how air travel is booked and marketed to travellers in the next few years. Exciting times are ahead.