Why travel buyers should care about the NDC
10 Jan 2018 - by Euan McNeil
Iata’s New Distribution Capability (NDC) was a hot topic in 2017, but it may have flown under the radar if you haven’t been mixing in travel trade news circles.
Simply put, NDC is a standard developed by Iata to facilitate communication for travel agents and airlines.
The truth is that the NDC will have an impact on travel buyers as well.
Here’s an example: If you and your travellers are customers of British Airways, you will soon be able to pay for a preferred seat, add additional baggage or re-order catering on BA flights via your TMC through the GDS instead of having to book this on the airline’s website.
A number of airlines have however begun to charge fees for bookings made in the GDS, instead of through their own channel. Among these are British Airways and Iberia Airlines which have signed a multi-year distribution deal with the Flight Centre Travel Group that eliminates this booking surcharge.
This agreement means FCM customers will be exempt from the airlines’ £8 (R150) surcharge per sector on bookings made through travel agencies. Passengers flying British Airways between Johannesburg and London will enjoy a saving of £16 (R300) on their return trip, while the surcharge on a return ticket from Cape Town to New York on British Airways could save as much £32 (R600).
The far-reaching agreement also means that FCTG will work closely with British Airways and Iberia on developing the future roadmap of the NDC to allow airlines to change the way in which they sell their ancillary products.
But it isn’t just about being able to shop for ancillaries.
There are other benefits of the NDC for travel buyers. 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 recently also hosted what it called a “Propathon”, or proposition marathon, involving 15 buyers from large organisations. The 24-hour session came up with 60 ideas for new airline products and services that buyers would like to see and which NDC could enable.
Travel managers during the Propathon indicated they are looking for solutions to offer a better traveller experience, better cost management and better data.
Concretely, they would like to see a system for automatically recognising corporate travellers at the airport to give them fast-track services; a service where the airline contacts the corporate to offer lower fares on alternative flights; dynamic pricing of lounge access; a corporate notification service for traveller no-shows or a data feed showing total contribution to airline (including up and downgrades).
Although these are exciting prospect and plans, which could all be realised thanks to the NDC, it could also result in a higher spend. You only have to look at shopping platforms such as Amazon to realise that a slicker shopping experience often means spending more.
Iata has already recognised that widespread adoption of NDC could make it easier for TMCs to upsell additional services. And also participants in the Propathon recognised that additional products and services based on the ideas they created may be charged for or negotiated as added value as part of traveller or corporate recognition.
For now, 45 airlines have signed up for the NDC out of the 275-membership of Iata. These airlines include British Airways, Lufthansa and American Airlines. However, Iata says that more than 75% of major airlines have committed to adopt NDC.
Exciting times are ahead…
A qualified Chartered Accountant (SA), with a passion for business, Euan McNeil joined the Flight Centre Travel Group in 2013 in the role of Financial Controller for the corporate travel brands. In his current role, Euan heads up the South African arm of FCm Travel Solutions, the business travel partner of choice for large national, multinational and global corporations, and Stage & Screen, a specialist travel service for music tourism and the film and production industries. Passionate about developing people, challenging the status quo and adding value to front-end business, Euan is inspiring his team to transform the business of travel. Having completed a B Com Honours in Accounting from the University of Johannesburg, Euan admits to being a big sports enthusiast. When he’s not blazing a corporate travel trail, Euan enjoys playing golf, watching sport and spending time with his wife and daughter.