NDC, a controversial change
Encouraged by the increasing awareness around the new standard created by IATA, the International Air Transport Association, airlines are turning to increasingly more personalised offers.
NDC. Behind these 3 letters, the acronym for New Distribution Capability, hides a revolution for air travel distribution. This is a “standard” driven by IATA which is about to be extended to all airlines and their sales channels, in order to offer travellers tailor-made offers. Ultimately, the goal is to set a standard approach to how airlines distribute fares and IATA expects that by 2020, 90 airlines will have adopted this approach. The standard is updated every 6 months to best meet the needs of companies and their travellers.
Thanks to the aggregation of data, this evolution provides travel agencies and the end customer with features and fares specific to their requirements, which were previously unavailable. It gives airlines the opportunity to integrate detailed data on traveller profiles and offer personalised solutions. In practical terms, a business traveller will be able to consult the options they have with the selected seat for every flight in the future, obtain images of the cabin, get the list of additional services on board, check the availability of Wifi, etc. In short, this will totally transform the way we buy flights.
A controversial change
This evolution is motivated by the need for companies to increase their number of contact points, the need to stand out from the competition and showcase their ancillaries, maximising the opportunity for additional revenues.
After Lufthansa, British Airways and other direct competitors, Air France – KLM will also adopt the standard this year.
“But the problem today, is that only the large national companies can afford to adopt this standard directly. Regardless of the interest linked to the wider distribution of these services, companies will gain an economic advantage as they avoid paying the famous GDS distribution fees,” says Hugo Vicherat, Channel Sales Director at Traveldoo. “At this time the NDC approach is not advantageous to small companies, whether they are agencies or technological players, as it requires significant development resources to prepare for these changes.” He also believes that we are seeing “a step backwards.”
“Thirty years ago, GDS were created to provide a single-entry point for all airlines. With this evolution, we have ended up with a situation in which we find GDS on the one hand, and NDC standards on the other for each of the larger companies. This is a situation that complicates the travel environment to the detriment of small set-ups that will not be able to handle the integration and updates required. “