What is NDC? A Beginner’s Guide to New Distribution Capability
Published on: 23 Sep 2024
Comments 0
The world of airline distribution has been undergoing a quiet revolution. Traditionally, airlines relied on Global Distribution Systems (GDS) to sell their tickets, but this model, though effective for many years, is beginning to show its age. Enter New Distribution Capability (NDC), a game-changing innovation by the International Air Transport Association (IATA) aimed at transforming how airlines distribute their products. NDC promises to bring the digital commerce experience airlines have long craved, bridging the gap between outdated systems and the future of personalized, direct-to-consumer selling.
New Distribution Capability (NDC) is an XML-based data standard created by IATA. It allows airlines to distribute fares, ancillary services, and products directly to travel agents and third parties. With NDC, airlines no longer need to rely on outdated GDS technology. This standard arose from frustration with the limits of traditional systems. NDC gives airlines more flexibility in managing content and pricing. It enables greater control and innovation in how they sell to customers.
At the heart of NDC is the desire for transparency, customization, and efficiency. New Distribution Capability aims to replace the black-box nature of GDS systems. In those systems, airlines had little control over how their products were displayed. With New Distribution Capabilities, airlines can better showcase their unique offerings. This includes seat upgrades and in-flight meals, providing consumers with richer and more tailored content at booking. The ultimate goal is to enhance the traveler’s purchasing experience. New Distribution Capability seeks to match the seamlessness we expect from modern e-commerce platforms.
NDC allows airlines to differentiate themselves in ways that were previously impossible. No longer confined to basic fare classes, airlines can now offer a fully personalized booking experience. For instance, an airline might use a New Distribution Capability to provide a business traveler with a bundled fare that includes priority boarding, extra legroom, and Wi-Fi access, all in one seamless package. This level of customization not only improves customer satisfaction but also creates new revenue opportunities for airlines.
For travel agents, NDC brings a wealth of opportunities. By tapping into direct airline data, agents gain access to real-time pricing, availability, and exclusive offers that aren’t available through traditional GDS systems. This real-time access to rich content means travel agents can offer their clients more competitive fares and customized experiences. Additionally, New Distribution Capability reduces the complexities of the traditional supply chain by removing the need for multiple intermediaries, which helps both airlines and agents operate more efficiently.
In the traditional GDS model, airlines provide inventory and fare information to the GDS, which then distributes that data to travel agents. While this model has been effective, it often results in a lack of transparency for both the airline and the end customer. Additionally, GDS fees have long been a burden on airlines, further compounding inefficiencies. NDC, on the other hand, provides a direct connection between the airline and the agent or consumer, enabling more flexibility in pricing, product offerings, and the overall booking experience.
One of the greatest advantages of NDC is the direct connection it creates between airlines and their customers. This connection allows airlines to offer differentiated content, including new fare types, ancillary services, and promotional offers. They can do this without the constraints of GDS systems. NDC empowers airlines to innovate and fosters a more competitive market. Each airline can uniquely position its products to stand out from the rest.
The future of travel is personalized, and NDC is leading the charge in making that a reality. As NDC adoption increases, travelers can expect a more customized booking journey. From receiving offers tailored to their preferences to seeing detailed information about their flight experience, such as meal options and entertainment, NDC will transform how passengers interact with airlines. This personalized experience not only makes booking more enjoyable but also builds stronger relationships between travelers and airlines.
Corporate travel stands to benefit significantly from NDC. Business travelers often have specific needs that go beyond standard leisure bookings, such as flexible fare options, seat upgrades, or access to lounges. NDC allows airlines to offer bespoke packages that cater to the unique demands of corporate clients. For companies managing their travel through agencies, New Distribution Capability means better transparency, more accurate pricing, and faster transactions, ultimately leading to cost savings and improved employee satisfaction.
NDC is undeniably the future of airline distribution. It represents a paradigm shift in how airlines, travel agents, and travelers interact, offering enhanced flexibility, transparency, and personalization. As more airlines and agents adopt NDC, the travel landscape will evolve, delivering better experiences for everyone involved. The age of rigid, one-size-fits-all airline distribution is over—welcome to the new era powered by New Distribution Capability.