In the ever-evolving world of airline travel, we are endlessly introduced to new terms for systems and standards which aim to make travel planning more efficient and cost-effective, like NDC. This airline standard introduced in 2012 is transforming how travel agents and customers worldwide view flight shopping. But let’s start from the basics.
NDC in travel: Everything you should know
What does NDC stand for in travel?
NDC stands for New Distribution Capability. It’s a standard developed by the International Air Transport Association (IATA) to enhance communication between airlines and travel agents.
What exactly is New Distribution Capability?
In other words, NDC refers to the airline’s capability to share information and sell their own goods and services directly to the travel agents without the GDS intermediary.
What’s the difference between GDS and NDC?
GDS stands for Global Distribution System, and it works as an intermediary between a travel agent and the airline. GDS works as a reservation system that allows travel agents to book, change or cancel a ticket. Travel agents can also make hotel and car reservations via GDS.
However, NDC is purely related to what the airlines offer. Some airlines provide unique content on NDC that is not available in GDS. This ability facilitates transactions between airlines and travel agencies. Plus, it skips the GDS fees.
Why was NDC created?
NDC was designed to allow the travel industry to evolve in selling its air products to companies, leisure, and business travelers.
As explained in the video, nowadays, there are still many limitations regarding airlines selling their products through travel agents. The way airlines and travel agents communicate hasn’t changed in years.
Limited product differentiation
Airlines can show their different products through pictures, videos, or just descriptive text. This helps the customer to better understand what is offered and make an educated decision on their purchase. However, pushing this content through the intermediary to the travel agent is very difficult because the tools are ancient.
Airlines can push new offers right away on their websites, like a new premium economy cabin or a new baggage product. But for travel agents, it takes a long time to find these offers, and in most cases, they’re unable to find them.
When you buy a ticket through the airline’s website, you know you can get offers directly from the airline with your frequent flyer number. On the other hand, when you book with a travel agent, you don’t get personalized recommendations based on your preferences because travel agents don’t have this information.
So NDC allows airlines to directly replicate the content from their website to the travel agent’s channel, benefiting themselves, the travel agent, and you, the customer.
The benefits of NDC
The NDC standard ensures that these ticket sellers stay up-to-date on each airlines’ newest offers and products. This allows you to see the full range of products and services available to you.
NDC benefits include:
- You get direct access to upgrades, exclusive packages, or limited-time offers even when buying from a third party.
- Your entire experience can be personalized to suit your individual taste.
- You can compare all airline options, including their different services, products, and promotions, not only price.
- Airlines can distribute their products widely and with more speed across third-party agents or sites.
- Travel agents can sell the same content that airlines offer on their websites.
The downsides of NDC
Though NDC has been around already for a few years, it’s still in development and far from perfect.
There are a couple of downsides:
NDC is an XML-based system. This means that the system code is written in the XML coding language. Although this language is supposed to be standardized, its implementation is dependent on the IT providers of each airline.
So what does this mean?
It means that there is no actual “standard” to base it on; if each airline used its own, it would create countless connecting channels making it impossible for online travel agents to integrate the technology.
The second drawback of the NDC system is that most travel agents and aggregators refuse to leave the comfort of their current GDS system. A switch to NDC may mean additional expenses for these companies and require them to make changes to their business model. For now, NDC remains a premium addition to online travel sites rather than an absolute necessity.
Airlines working with NDC
With all of the available benefits, It’s no surprise that some of the world’s biggest airlines opt to use NDC. IATA has been incentivizing airlines that want to grow their NDC volume to join a group called the Leaderboard. This Leaderboard comprises 22 airlines, including some of the world’s most popular.
Standardizing the airline industry with NDC creates a more efficient system that benefits the airlines, agents, GDSs, travel start-ups, and customers worldwide. IATA is committed to using the NDC system to provide immediacy, individualism, and inspiration to its customers throughout the process of shopping and flight booking.
This means better end-to-end service and overall enhanced customer experiences. Though there still a long way to go for NDC, the future looks promising.