The Basics of NDC

NDC, or New Distribution Capability, is a travel industry standard developed by the International Air Transport Association (IATA). Its primary purpose is to modernize the way airlines distribute their products and services, allowing for richer and more personalized offers through direct communication between airlines and travel agents or other third-party distributors.

Key points of NDC:

1. Richer content: NDC enables airlines to provide more detailed and dynamic content, including fare families, ancillary products (like baggage or seat selection), and real-time offers. This improves the ability of travel agents or platforms to present travelers with a more complete range of choices.
2. Personalization: Airlines can better tailor their offerings to specific customers, using data to customize pricing, offers, or packages in ways that were difficult under traditional distribution methods like GDS (Global Distribution Systems).
3. Direct connection: NDC allows for a direct connection between airlines and distributors, reducing dependency on GDS and giving airlines more control over how their products are displayed and sold.
4. Cost efficiency: By bypassing some GDS fees, NDC may help airlines reduce distribution costs, while also providing the flexibility to offer innovative pricing and packaging models.
5. Improved customer experience: Travelers benefit from more transparent pricing and offers, as well as a more seamless booking process that can include more detailed options like seat selection or other preferences.

In essence, NDC is aimed at giving airlines more control over distribution while enhancing the traveler's buying experience through richer, more tailored offers.

Why should a travel agent embrace NDC ?

Travel agents should consider using NDC (New Distribution Capability) for several reasons, particularly because it can enhance their ability to serve customers and stay competitive in a changing industry. Here are the main benefits:

1. Access to Richer Content

NDC allows travel agents to access more detailed and dynamic content from airlines, including fare families, seat options, baggage policies, and other ancillaries. This richer content helps agents offer travelers a wider range of choices and more personalized experiences.

2. Personalized Offers for Clients

With NDC, airlines can tailor offers based on traveler data, meaning travel agents can provide more customized and relevant options. This might include special fares, exclusive bundles, or loyalty perks that align with a client’s preferences or travel history.

3. Better Fare Transparency

NDC enables more transparent pricing. Agents can clearly present various fare options and any associated benefits or restrictions, allowing customers to make more informed decisions. This transparency builds trust and can lead to better customer satisfaction.

4. Direct Airline Relationships

NDC connects travel agents more directly to airlines, bypassing traditional Global Distribution Systems (GDS). This can lead to faster access to inventory, real-time availability updates, and direct negotiation with airlines for specialized deals or packages.

5. Competitive Advantage

As more airlines adopt NDC, agents using the standard will have access to exclusive offers or content not available through traditional channels. This gives them a competitive edge in attracting and retaining clients who are looking for the best deals and the most flexibility.

6. Lower Distribution Costs

Airlines often provide NDC content at lower distribution costs compared to GDS. These savings may result in better deals for clients or improved margins for travel agents, especially when selling ancillary services like extra baggage or upgraded seats.

7. Improved Customer Service

The richer and real-time nature of NDC content allows agents to offer better service by instantly responding to customer queries about flight changes, seat preferences, or add-ons. This can create a smoother booking experience and higher customer satisfaction.

8. Flexibility and Future-Proofing

As the travel industry continues to evolve, adopting NDC can help travel agents future-proof their business. The ability to offer richer, more dynamic products that meet customer demands will be increasingly important in a digital-first world.

In summary, using NDC enables travel agents to deliver a more comprehensive, transparent, and personalized experience, which can help them stand out in a competitive market while fostering stronger customer relationships.

Who is the clear winner as NDC evolves, The Airlines, The Travel Agent, or The Consumer ?

As NDC (New Distribution Capability) evolves, airlines, travel agents, and consumers can all be winners, though the benefits vary for each group. Here's how the impact breaks down for each:

1. Airlines

Biggest Winner: Airlines arguably benefit the most from NDC. It gives them more control over distribution, enabling them to bypass or reduce reliance on traditional Global Distribution Systems (GDS), which can be costly. By working directly with travel agents through NDC, airlines can:Reduce distribution costs.Gain greater flexibility in how they price and bundle their products.Offer personalized deals based on customer data, increasing potential revenue from ancillaries (like baggage fees, seat upgrades, etc.).Strengthen their brand presence by providing a more consistent and customized presentation of their offers, similar to what they offer on their own websites.

In short, NDC helps airlines optimize their sales channels and boost profitability.

2. Travel Agents

Conditional Winner: Travel agents can benefit from NDC, but they face both opportunities and challenges. On the plus side, NDC allows agents to:Access richer and more dynamic content, which improves their ability to offer clients customized, real-time options.Differentiate their services with personalized offers that were previously unavailable through GDS.Build stronger relationships with airlines, potentially negotiating exclusive deals or leveraging special rates.

However, NDC also brings complexity, requiring agents to invest in new technology and training to adapt. Those who successfully embrace NDC could see competitive advantages, while others may struggle with the transition.

3. Consumers (Travelers)

Big Winner in Terms of Choices: For consumers, NDC can improve the travel booking experience through:More personalized and flexible offers: Travelers can access tailored options like fare bundles, seat selections, and ancillaries that align with their needs and preferences.Better pricing transparency: NDC facilitates a more detailed breakdown of fare components and optional add-ons, allowing travelers to see exactly what they are paying for and choose the options that suit their budgets.Greater consistency across different booking platforms (whether direct with airlines or through travel agents), ensuring that the best offers are available through all channels.

While consumers benefit from greater choice and transparency, some may face a learning curve when comparing fares due to the complexity of bundled and unbundled services.

Conclusion: Airlines are the biggest winners, gaining the most control and cost efficiency, but consumers and travel agents also stand to benefit significantly. Travel agents who adapt well to NDC will thrive, while consumers enjoy more options and pricing clarity. The landscape becomes richer and more competitive, but success for any party depends on how well they adapt to and leverage the capabilities of NDC.

The team at www.farenexus.com can work with your team to enable the Distribution, Shopping or access to NDC content whether your company is an airline, or travel services provider.