By the end of next year, the term “NDC” is set to disappear, with “orders and offers” intended to replace one of the industry’s most debated acronyms.

IATA’s NDC – or New Distribution Capability – has been evolving since 2012, and is a standard designed to enhance the capability of communications between airlines and travel agents. IATA’s Aleks Popovich told delegates that as more airlines adopt NDC, and as its One Order scheme develops, NDC will no longer be used as a term. 

Speaking at the GTMC Conference at the Grand Hotel Huis ter Duin in the Netherlands, Popovich, who is senior vice-president, financial and distribution services at IATA, was asked how he saw the evolution of NDC to One Order. “My goal would be to stop using the term NDC, and to start using the term ;offers and orders;”, he told moderator Jo Lloyd of Nina & Pinta.

“By the end of next year, our leaderboard airlines will hit critical mass and 20% of indirect sales will be via NDC. NDC will then go into maturity, and we’ll replace the terminology NDC with orders and offers. We’ll then focus on simplifying the back office. NDC now is still stuck with tickets, PNRs and electronic miscellaneous documents (EMDs). The goal is to replace those legacy documents, which are a nightmare for the customer, with a One Order record.”

Corporate challenges
Popovich also defended the airline association’s track record on its engagement with the wider business travel community. When asked if IATA had underestimated the impact of NDC, in terms of distribution and stakeholders, he replied: “The short answer is yes. NDC is bringing retailing to a commoditised industry. That is big. What would have I done more in hindsight? I would have included customers and corporates.”

However, he argued more emphasis needed to be placed on passengers. “It’s the job of the customer to shout down the value chain. While you lot are arguing about complexity, I’m the customer and this is what I want to see… we were slow on that, but I think we’ve got corrections to address that.”

Popovich added IATA would also gauge the success of NDC on airline revenue generation. “People assume the motivation is to reduce cost, but we asked airlines where they see the benefits. For the CFOs – broadly speaking – 70 per cent is about growing revenue, 30 per cent about reducing cost. [NDC] enables product differentiation to come… airlines want to show  their products through all channels to the customer. They want to delight the customer.”

Airline strategies

Aleks Popovich from IATA discusses NDC with Jo Lloyd at the GTMC Overseas Conference

Another topic tackled at the conference was the variations in airline approaches to NDC, including the use of a GDS fee by some carriers, with Lloyd asking: “Where do you see IATA’s role in distribution?”

“Our job is to provide standards which are business model neutral,” Popovich replied. “If you look at NDC implementation in recent years, there’s a host of business model implementations being made. Airlines all work to one standard, but there’s a variety of models. We see airlines developing strategies in isolation. Where IATA can add value is – without interfering in those commercial models – pointing out where best practice is. 

“When I speak to airlines individually, they can tell me about their commercial models, but I can’t tell anybody or make any disclosure. But to implement what they want, what can they learn from each other? For example, response times. In today’s world, moving from milliseconds to 10 seconds is not acceptable with NDC… if you’re an airline coming in thinking about the next business model, that’s none of our business. But what we can do is share the practices of the group and encourage smarter choices to be made.” 

Servicing issues
Another area discussed was servicing. Lloyd pointed out that the nature of business travel means plans can change roughly three times before a trip goes ahead, and on average twice while somebody is on the road. “With NDC, through the chain as to how that is fulfilled and deployed, that has caused some real issues,” she said.   

“There is learning going on,” Popovich told delegates. “If we look at NDC levels, we’re at level 3 or 4. We’re realising that when it comes to servicing, stuff happens, and level 4 is full offer and order management, but the level 5 is about NDC at scale. It will be business travel ready.”

Read BBT‘s feature about how servicing is set to transform the use of NDC-enabled airfares

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