New Distribution Capability (NDC) has emerged as a transformative technology in the airline industry, fostering a paradigm shift in how air travel is sold and distributed. Developed by the International Air Transport Association (IATA), NDC is designed to enhance the way airlines market and sell their products to travel agents and consumers. By facilitating direct access to airline content and dynamic pricing, NDC promises a richer and more personalized booking experience. Despite these advantages, the adoption of NDC has encountered persistent delays, especially among corporate and leisure travel advisors.
Accelya, a key player in the NDC ecosystem, has reported a remarkable increase in NDC volumes, more than doubling from the previous year. Major airlines such as American Airlines, United, and Lufthansa are already leveraging NDC capabilities. Yet, there is a notable absence of corporate travel engagement, raising questions about future adoption trends.
Many travel advisors exhibit caution regarding NDC, often due to unclear messaging about its benefits and operational processes. Accelya’s Chief Customer Success Officer, Tye Radcliffe, acknowledges the role of education in alleviating misconceptions surrounding NDC’s potential. “There are misunderstandings about what NDC can and cannot do,” he explains. He advocates for increased knowledge-sharing to empower travel agents and facilitate a smoother transition to NDC.
The slow uptake of NDC can be partially attributed to the lack of economic incentives for agencies to shift away from Traditional Global Distribution Systems (GDS). As cited by NDC consultant Cory Garner, agencies often require external motivation to embrace this new technology. However, Radcliffe contends that the influence of NDC is beginning to penetrate the market, particularly through innovative offerings and enhanced airline content.
One notable factor fueling NDC growth is the rollout of continuous pricing, allowing airlines to offer real-time pricing that reflects market dynamics. This shift not only enables greater transparency but also provides customers with tailored offers based on their unique preferences. Radcliffe believes that the realization among corporations regarding NDC’s capabilities is a gamechanger. “These corporations have finally understood the power of NDC,” he states, indicating a significant shift in corporate attitudes toward this technology.
Furthermore, the collaboration between major GDS providers—Sabre, Amadeus, and Travelport—is a critical step towards mainstream NDC adoption. Their efforts could potentially unlock a surge in transaction volumes once agencies feel confident that their needs are being met. Radcliffe asserts that this collaboration is not just beneficial but crucial, acting as a valve that will release significant NDC transactions.
Although there are many promising signs for NDC, challenges remain, particularly around servicing capabilities. Travel agencies have expressed concerns about the functionalities offered by the top three GDSs. While these systems have made commendable strides in booking and shopping capabilities, they still lack certain nuanced servicing options necessary for complete integration into agencies’ day-to-day operations.
Radcliffe notes emerging players like Spotnana and Navan, which have effectively developed methods to optimize NDC usage and enhance efficiency. These new entrants often possess the agility to adapt more readily to the demands of NDC, thus pressuring traditional GDSs to expedite their development roadmaps.
Furthermore, he emphasizes that transaction speed can be a crucial sticking point. As NDC providers enhance the variety of content they present, the time taken to process complex bundles can affect user experience. Speedier transaction times would not only streamline routines but also optimize the overall user experience, thereby increasing NDC’s appeal.
As we move further into 2023, the future of NDC looks promising, driven by enhancing technological capabilities and growing acceptance within the industry. While existing GDSs continue to refine their offerings to better meet agency needs, the continuous influx of innovative solutions from newer companies will keep the momentum going. With corporations increasingly recognizing the benefits NDC brings, it is likely that more travel advisors will begin engaging with NDC solutions.
While NDC faces challenges in widespread adoption, the increasing clarity regarding its advantages, coupled with enhancements from GDSs and emerging technology solutions, positions the airline industry for a dynamic transformation in air travel distribution. The proactive steps taken now will pave the way for a more integrated, consumer-focused model that ultimately benefits all stakeholders involved.
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