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What is NDC?

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We are constantly introduced to new terms for systems and standards designed to make travel planning more effective and affordable, like NDC, in the constantly changing world of airline travel. This airline standard, launched in 2012, is revolutionizing how travelers and customers see fly shopping across the globe. Read until the end of this post to know more about this standard, its story, its benefits, and more.

New Distribution Capability is referred to as NDC. The International Air Transport Association (IATA) created this standard to improve communication between airlines and travel agencies. NDC refers to the airline’s capacity to exchange data and market its products and services directly to travel agents without the GDS middleman.

How Did NDC Come To Be?

Every airline company runs on two basic requirements- passenger satisfaction and profits. As a result, companies usually thrive to offer additional benefits

to take care of the first requirement.

It includes better food onboard, lounge facilities, luggage insurance, smoother check-ins, and more. The ancillaries or the additional services are offered for some additional cost. Because the transportation services bring in a small profit margin, the cost of additional benefits helps generate a little extra.

NDC was created to give the travel sector the flexibility to market its air products to businesses, leisure travelers, and business travelers. Here are the points that justify the establishment of this standard well:

Extended Time To Market

Airlines can immediately promote new offers on their websites, such as a new premium economy class or a new baggage policy. However, it takes a lot of time and effort for travel brokers to uncover these deals, and frequently they are unsuccessful in doing so.

Narrowly Differentiated Products

Airlines can display their many offerings using images, videos, or detailed text. By doing this, the consumer can better comprehend what is being offered and decide on their purchase with knowledge. However, because the tools are outdated, sending this content through the middleman to the travel agent is highly challenging.

No Customization

Your frequent flyer number will enable you to receive deals from the airline when you purchase a ticket through the carrier’s website. On the other side, since travel agents don’t have access to this data, you won’t receive personalized recommendations based on your interests when you book with them. To benefit themselves, the travel agent, and the consumer, NDC enables airlines to immediately copy the material from their website to the travel agency’s channel.

What Advantages Does NDC Offer?

There are no two ways that the establishment of NDC has brought about several positive changes. Here is a list of some of the most important benefits that you may want to know about:

Customer Information And Personalized Shopping Experience

Currently, most of the customer’s personal information is still under the control of intermediaries, such as OTAs and GDSs. As a result, airlines only receive the most basic data on their customers, making it impossible to customize the purchase experience, which has become commonplace in contemporary travel eCommerce. The NDC standard aims to give airlines access to direct customer information.

Independence In Pricing And Content

Pricing independence is an additional advantage of customization. Currently, ATPCO, the technology supplier and primary pricing data source, is where most airlines publish their tariffs. Airlines lose the chance of dynamic pricing when third parties act as intermediaries between distribution and revenue management channels.

The capacity to develop customized ticket and travel package offers based on specific client information is known as dynamic pricing. The new XML standard enables airlines to create their APIs and independently modify prices, enhancing their offers and customizing prices for each consumer.

Discounts, Ancillaries, And Content Offers

Airlines cannot offer ancillaries while distributing flight data through GDS’s EDIFACT. Since ancillaries are carriers’ primary earnings sources, this causes financial losses for service providers.

Differentiating A Product

One can display only airline prices and schedules under the conventional GDS paradigm. While OTAs and tariff metasearch engines make it simple for travelers to compare prices, airlines cannot effectively compete by marketing their additional value offerings. This issue is resolved with rich content that contains all service information.

Decreased Reliance On Outdated Technology

Most airlines employ legacy passenger service systems (PSS) that provide a schedule, pricing, and reservation information. The PSS’s primary function is to display available seats on a particular aircraft.

PSSs can perform poorly, have a variety of additional limitations, and the majority of PSS providers indeed lag in terms of modernization. NDC will function as a distinct engine independent of older systems that enable the presentation of data from PSS databases utilizing airline-specific proprietary interfaces.

On September 1, 2015, the initial set of formal standards was made public. The way airline tickets are issued will change thanks to a new message standard. Bypassing Global Distribution Systems will assist service providers in bringing tailored content straight to OTAs, TMCs, and metasearch engines (GDSs).

NDC was designed to disrupt the GDS oligopoly that had grown over time. We must take a step back to comprehend the current state of airline distribution and understand the reasons behind the emergence of NDC.

Important Questions To Ask About NDC

The above information offers all the essential details about the standard, but you may still have questions. Therefore, here is a compilation of a few common questions, the answers to which will help you better understand the whole concept.

How Can You Access NDC Content?

There are two methods for getting access to NDC content:

  • First, work with an NDC aggregator who will take care of your specific airline connections, like a technology supplier.
  • Progressively establish direct relationships with airlines

What Do Direct Air Links Entail?

Instead of going through a middleman like a GDS, a direct connection occurs when a technology vendor or travel agent interacts with an airline’s reservation system. Building direct integrations won’t be an excellent solution for most travel sellers. Each integration must be built and maintained, which averages three to six months. Sellers may have to wait long before beginning integration and must negotiate the deal’s conditions.

NDC Aggregator: What Is It?

Aggregators are businesses that gather options from several sources and present them to customers in one location. For example, the term “aggregator” is frequently used in the travel industry. Or, in the case of flights, they are businesses that collaborate with numerous airlines to compile the content onto a single platform.

NDC is open. Thus it can be used and implemented by any third party, IT provider, or intermediary. As a result, the distribution world has become fully accessible, allowing for the entry of new companies, particularly aggregators.

To enable a single integration and avoid managing ongoing maintenance for each airline, travel marketers might choose a technology supplier as their NDC aggregator. Today, there are two categories of providers:

  • New distribution players include AirGateway, Duffel, Travelfusion, and more.
  • Amadeus, Travelport, Sabre, and more are examples of traditional GDSs.

Why Is The Number Of NDC Aggregators Increasing?

Integrating and keeping relationships with every airline requires significant complexity and time investment. In addition, since not all airlines adhere to the same standard, low-cost airlines frequently create their integration requirements. As a result, it is made more challenging. However, you can delegate the grunt work to an aggregator and gain access to many airlines, including NDC airlines, on a single platform.

The entry barrier for new aggregators to enter the market and connect with airlines is reduced because NDC is an open standard using the more popular XML. As a result, aggregators have a more incredible opportunity to give customers of travel seller companies better experiences as new airlines begin to use NDC and expand their capabilities.

Conclusion

Given all the advantages, it is no surprise that some of the major airlines worldwide choose to use NDC. Airlines who aim to increase their NDC volume have been encouraged by IATA to join a group called the Leaderboard. Twenty-two airlines are represented on this Leaderboard, including some of the most well-known in the world.

NDC standardization in the airline sector leads to a more effective system that is advantageous to airlines, agents, GDSs, travel start-ups, and customers globally. IATA is dedicated to using the NDC system to give its consumers inspiration, individuality, and immediacy while shopping and booking flights. It translates into improved customer experiences all around and better end-to-end service. Although NDC still has a ways to go, the future is hopeful.

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