New Distribution Capability (NDC)

New Distribution Capability, NDC for short, is an XML-based data transmission standard (NDC Standard) that was launched by the International Air Transportation Association (IATA) to transform the way the travel industry sells its products and address the shortcomings of the existing airline distribution system.

NDC is a modern technique  used for airlines to share their product offerings.

Two inter-related factors led to the creation of NDC. First, airlines wanted a way to share “rich content.” Rich content would let airlines bundle services with their flights to help them differentiate themselves from their competitors, provide more personalized offers, and increase revenue

Secondly, airlines were increasingly looking at ways to get around the GDS-centric distribution system and take control of their distribution channels. The existing system was complex, requiring multiple systems to publish a fare. For example, if an airline wanted to change their prices, they’d have to update them on a third-party system..

Benefits of NDC

Personalized offers and customer data

A business traveler prefers to sit in business class on a direct flight and often brings a second checked bag. With NDC, an airline can use their customer data to offer this passenger a package that includes a direct flight, extra checked bag, and a seat in business class immediately.

Share rich content and sell ancillary services

Traditional GDSs can only share prices and schedules, NDC supports rich content. Rich content can include a variety of extra details, optional ancillary services that can be added to a flight, and images and text that can catch the attention of customers. Furthermore, NDC allows airlines to directly bring this content to travel agencies and travel management companies (TMC) without necessarily requiring a GDS.

Airlines can publish dynamic prices

With NDC, airlines can change and adjust prices themselves, providing more personalization to their customers.

Airlines can bypass GDSs

NDC would allow airlines to directly share dynamic content with OTAs, travel search engines, and TMCs without the need for a GDS.

In NDC, offers are generated by the airline based on the search enquiries (Shopping request flow) of the Seller. Offer means flight and seat availability with airfare that could be bundled with other products such as ancillary services.

Offer becomes an order once the customer or Seller accepts the offer resulting in the creation of a unique order reference number, like a PNR in a traditional GDS environment.

Does NDC replace GDS?

It doesn’t, because NDC is only the standard that enables better retailing capabilities and will be connected also to GDS platforms. GDSs are building their own NDC capabilities and could connect to the Qatar Airways NDC programme via Oryx Link and serve as NDC aggregators in the future. We have implemented NDC in the Amadeus and Sabre GDS platforms and discussions are underway with a range of other Global Distribution Systems and aggregators.

Airways like Qatar Airways uses NDC for better retail capabilities.

The challenges with implementing NDC

Even with these benefits NDC has faced lots of  challenges 

It’s not standardized

Many airlines have adopted NDC and its XML-based standard, the practical implementation will be entirely different for each airline. Nearly every airline has taken a unique approach to NDC and created custom APIs. If that trend continues, it means that OTAs, TMCs, and even GDSs would need to integrate with each airline, something that they won’t be willing or able to do. This has created a need for someone to standardize or aggregate the different NDC channels.

A fuzzy value proposition for OTAs and TMCs

The value proposition for travel agents, OTAs, and TMCs is less clear. The GDSs are very integrated into their systems and still work perfectly fine. But NDC requires updating their current systems to handle the new communication protocols of each airline without any guarantees that NDC will bring any additional benefits.

GDSs are adopting NDC

In response to NDC’s potential to allow airlines to avoid GDSs, the GDSs have begun to adopt NDC themselves.We will see the continued spread of NDC but through the same GDSs that NDC sought to bypass.

Conclusion :-

There are various benefits of NDC. Firstly, for the airline, NDC standard enhances the capability of distributing in modern ways in Airways to the Trade Partners, TMC’s, OTAs, Consolidators and other 3rd Party Sellers. For the Sellers, NDC means better booking experience and upsell opportunities. It also provides the opportunity to improve the end-to-end airline distribution process, e.g. introducing flight details and ancillary products in a faster, richer and more dynamic way. It enables airlines to deliver enhanced customer experiences through personalised offers, rich content and dynamic pricing.

Customers increasingly expect personalised offers that contain a combination of products and services that best suit their needs. Many Airways has invested many capabilities so that fares, conditions, discounts, ancillary product and service combinations can all be adjusted based on the preferences of travelers, Sellers and stakeholders.NDC solutions will allow airlines to achieve their primary goal of selling their ancillary services. 

Vafion’s familiarity with various API standards like OTA (Open Travel Alliance), NDC etc. and our unique API integration life cycle helped us to offer the best and cost effective integration services to our customers. Because of our extensive experience in hospitality/airline sector, we are better positioned to execute NDC integration projects successfully. 

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