Traditional channels, predominantly Global Distribution Systems (GDS), were characterized by a notable lack of flexibility in the realm of airline distribution. This blog explains to you what is new distribution capability and how it benefits both airlines and travelers.
New Distribution Capability (NDC) is an initiative led by the International Air Transport Association to modernize how air travel products are retailed to consumers. NDC aims to transform the airline distribution business from one based on static content to dynamic and personalized offers. This inherent rigidity posed significant challenges for airlines, hindering their ability to distinguish their offerings and provide tailored experiences to travelers.
What is New Distribution Capability?
NDC or New Distribution Capability is a new data transmission standard developed by the International Air Transport Association to modernize how air travel products and services are retailed to travelers.
Previously, airlines distributed their fares, schedules, availability, and other products through the Global Distribution System, which was very limiting. NDC provides an XML-based data transmission standard that allows airlines to distribute customized and personalized offers across any sales channel, not just traditional ones like travel agencies.
What’s the purpose of New Distribution Capability?
The role of NDC in travel booking is to enable airlines to provide relevant offers tailored to individual customers rather than using the “one size fits all” approach of the GDS systems. With NDC, airlines can distribute tailored pricing, rich content like photos/videos, interactive seat maps, ancillary products, and personalized recommendations. While understanding what new distribution capability is it also allows them to merchandise their products better and control how their brand is presented and sold across channels.
At its core, NDC transforms the old “ticketing” mindset into modern “retailing” focused on the customer experience. By adopting the NDC standards, airlines gain more control over their distribution and can provide travelers with a more seamless, personalized booking experience across any device or platform.
So, NDC was IATA’s way of changing this. They wanted airlines to have more control over what they offer. Instead of relying solely on these services (GDS), airlines could now create special packages with extra services and adjust their offers based on what travelers want now, not just what these systems could handle.
Who developed the NDC standards?
In 2012, the International Air Transport Association (IATA) introduced the NDC (New Distribution Capability) concept in response to the evolving air travel landscape. NDC standards, developed by IATA, represent a paradigm shift in the distribution of airline products and services.
At its core, the role of NDC in travel booking is to address the constraints associated with the traditional “indirect” booking process, where Global Distribution Systems (GDSs) play a central role in aggregating flight content for distribution.
How Do NDCs Work?
NDC allows airlines to distribute and retail their products and services through an XML-based data transmission standard. This allows airlines more control and flexibility over how their offers are displayed and sold through various channels. The key components of what is new distribution capability involves:
- Airlines – Create customized offers and make them available through NDC API connections. This allows airlines to tailor products based on who is requesting them.
- NDC API – The technical layer that connects airline offers to various sales channels. The NDC schemas and technical standards enable a common language between parties.
- Aggregators – often act as intermediaries, consuming content from multiple airlines and distributing it to various channels. Provide additional services on top of basic NDC content.
- Travel Sellers – The points of what is new distribution capability sale range from online travel agencies to metasearch sites to travel management companies. To source content, they connect to airline NDC APIs, sometimes via aggregators.
- Customers – Ultimately, search for and book travel through the various endpoints. They aim to receive tailored offers via the NDC-enabled distribution chain.
The steps in a typical NDC transaction are:
- A travel seller or aggregator sends an offer request to an airline’s NDC API. This specifies parameters like origin, destination, travel dates, passenger info, requested products, etc.
- The airline’s NDC engine processes the request and constructs tailored offers based on availability, business rules, customer value, etc.
- The offer response is returned to the requester via the NDC API in a standardized XML schema.
- The travel seller displays the offers to the customer, who can then choose to book the offer returned by the airline.
- Booking and payment details are exchanged via the NDC APIs to complete the order.
What is NDC Airline?
An NDC airline is an airline that has implemented the NDC standards, allowing it to have more control over its distribution strategy and offer a more dynamic and personalized booking experience to travelers. Through NDC, airlines can directly connect with distribution partners and customers, providing richer content, more flexible pricing, and the ability to sell ancillary services during booking.
The key features of NDC for airlines include the ability to:
- Distribute Directly: NDC allows airlines to distribute their products directly to travel sellers and customers, bypassing traditional Global Distribution Systems (GDS) intermediaries.
- Enhance Content: Airlines can provide detailed and customized information about their flights, services, and ancillaries, offering a more comprehensive view of their offerings.
- Implement Dynamic Pricing: The nuances of what is new distribution capability enable airlines to implement dynamic pricing strategies based on various factors, such as demand, market conditions, and customer preferences.
- Sell Ancillary Services: Airlines can sell additional services, like seat upgrades, extra baggage, and in-flight amenities, during the booking process, providing travelers with more options.
- Improve Connectivity: Using standardized communication protocols, NDC fosters better communication and connectivity between airlines and their distribution partners.
Exploring the Role of NDC In Travel Booking
Benefits for Airlines
- Understanding what is ndc airline will offer more control over how their products are displayed and sold through various travel agents.
- Allows airlines to differentiate their offerings and sell ancillary products directly to customers
- Enables personalized offerings and tailored recommendations based on customer data
- Streamlines distribution by connecting with multiple travel agents via NDC APIs instead of complex legacy connections
- Lowers distribution costs by reducing dependence on Global Distribution Systems (GDSs)
Travel Agents Benefits
- Provides access to richer air travel content and a broader range of airline products and services
- Allows agents to compare offers from multiple airlines side-by-side
- Enables agents to sell customized bundles and ancillary products on behalf of airlines
- Improves ability to personalize and tailor offerings for each customer
- Streamlines business travel booking through NDC API integration
Benefits for Travelers
- The actors of what is new distribution capability include transparency in airfares and fees for ancillary products and services.
- Access to personalized offerings tailored to individual needs and preferences
- Greater choice of air travel bundles and ancillary products like Wi-Fi, meals, seat selection
- More flexibility to customize air travel experience and select preferred options
- Ability to easily compare offerings across multiple airlines
- Streamlined booking experience through travel agent airline NDC integration
NDC Challenges
- Airlines must carefully assess the costs associated with NDC integration and develop a clear ROI strategy.
- Integrating NDC APIs into existing systems poses technical challenges and requires a deep understanding of airline operations.
- Airlines must adapt their distribution strategies to effectively utilize new distribution channels opened up by NDC, ensuring a consistent brand experience.
- Securing traveler data is crucial for airlines adopting NDC, necessitating robust cybersecurity measures and compliance with data protection regulations.
- Transitioning to NDC requires meticulous planning and execution to avoid disruptions and overcome internal resistance.
- Training staff on NDC concepts and tools is essential for successful implementation and maintaining a high level of service for travelers.
- In the evolving NDC adoption landscape, airlines must stay agile and innovative to remain competitive and meet traveler expectations.
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