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BBT March/April 2018
March/April 2018
For Business, Corporate Travel & Meeting Buyers & Arrangers

Just what exactly is NDC?

IATA’s New Distribution Capability has been debated for a couple of years now – but are you still struggling to get your head round it? You’re not alone, as many in the industry cannot agree what it is, why it should be introduced or what impact it will have on those buying and selling air travel. Here’s a quick lowdown...

What is NDC?

In simple terms, NDC is a set of technology standards, which will give airlines the ability to distribute all their content through third parties.

Why does IATA want NDC?

Today, airlines are offering a wide variety of products and services on their websites to appeal to the business traveller – early boarding, preferred seating, a day pass for an airline lounge and so on. But TMCs using GDSs may not be aware of the full range of airline products on offer, and airlines cannot customise the offer based on who is making the request.

Why will it benefit airlines?

Airlines say they are investing hundreds of millions of dollars in upgrading their products, with lie-flat seats, wifi on international services, new aircraft and so on – and yet the legacy indirect-distribution model does not support product differentiation – so one business class seat looks like any other, when it’s displayed as codes on a screen. However, the GDS providers say they have the capabilities to display rich content with images and info – it’s up to the airlines to supply them with the relevant data. The debate rumbles on…

Why are parts of industry against NDC?

Some people in the industry believe that ultimately NDC means the airlines can charge more if there is less transparency with fares, and the ability to compare is limited.

Also for TMCs and agents, going directly to the airline could end up with more costs being passed on to the traveller, because the economics of NDC are still unsure. There is the possibility that airlines might start charging TMCs for queries as well as bookings.

So this is just a scheme to make airlines more money and sell direct to the traveller?

Some TMCs have raised this point, but it’s worth noting that there will always be new routes to market in any industry.

TMCs will have more information about the travel offers available than they currently can access via the indirect channels. This, in turn, could increase the potential value agents can provide their customers.

Will everyone use the same standards?

All airlines will use the same IATA-verified standards, which means that third-parties – GDSs, TMCs, procurement departments, plus new entrants – can access the same content that airlines are selling directly, and redistribute them on the airlines’ behalf.

Apart from airlines, who else can benefit from NDC?

The threat of NDC could be more painful to the established TMCs, but smaller tech-based TMCs could profit from any change. A new way for them to connect with airlines could open up innovative solutions to deliver air content to clients.

Will it increase competition or drive it out?

This is still being debated. IATA says if you take the example of the low-cost carrier with no GDS presence, NDC will enable such a carrier – which today only sells direct to the customer – to sell via travel agents and TMCs, using technology compatible with their website.

However, some argue there will be a cost attached to NDC, and until we have an idea of what that cost will be, there is a danger the initiative favours those airlines that can afford big investments in new distribution systems.

It seems we’ve been talking about NDC for years, when will it come into play?

A global roll-out is expected to begin in 2016.

Click here for a more in-depth look at NDC by Martin Cowen: NDC: Friend or Foe?

See all the latest news report on the topic here: http://buyingbusinesstravel.com/category/tags/new-distribution-capability-ndc

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