If NDC ever comes to be, it will be years away. It is a move by the world's airlines to reduce their distribution costs and get greater control of passengers who don't happen to book through airline websites.
If you are a road warrior who books flights through your corporation’s self-booking tool or through a travel agency, online or off-line, then the world’s airlines have a grand plan to send you the kinds of personalized offers for premium seats and upgrades that they currently serve up to frequent flyers who buy tickets on airline websites.
IATA, the global airline group spearheading the effort, calls its initiative, a New Distribution Capability, which doesn’t exactly roll off the tongue.
What this means is that IATA will take the next couple of years to develop — or borrow from existing — XML standards that would enable airlines to merchandise to their customers through global distribution systems and travel agencies.
Today, when airline customers start searching for flights on airline websites they can enter their frequent flyer information, and the carrier knows who they are, their travel preferences and patterns as they are searching, and then can make customized offers for everything from lounge access to free, onboard Wi-Fi.
IATA wants to level playing field and get control of customers
The NDC initiative would allow airlines to do the same sorts of marketing when travelers begin their searching and booking on intermediary sites such as Orbitz and American Express, or through corporate self-booking tools such as Sabre’s GetThere.
“As for the traveler I can only conclude there will be an upside of more channels having access to the same content as opposed to the limited access today due to a variety of reasons,” says Marc Rosenberg, a former Air Canada distribution official, who is president of Marsalyn Creative.
Perry Flint, an IATA spokesperson, explains that these new capabilities on travel agency sites would work if passengers agree to provide the airlines with personal information up-front.
“Providing personal information will not be mandatory but just as providing a frequent flyer passenger number may provide benefits on an airline site, it will allow customers to be recognized through the indirect [travel agency] channel,” Flint says.
“When I shop at many stores (CVS, Giant, Safeway, PetSmart), I provide a little card on my key chain that gets scanned and it gets me a discount on some items,” Flint says. “When I applied for card, I provided certain personal details. But I never have to provide that card to make a purchase.”
Don’t expect any changes to be in effect for years. IATA — perhaps optimistically — projects that these new capabilities would be in place anywhere from 2014 to 2016.
And, behind the scenes, there will be lots of travel industry maneuvering, which is already beginning, over the airlines’ plans.
Flint of IATA explains that about 60% of flights today are booked through travel agencies, and airlines are going to be looking for “new entrants” to make things more competitive, and lower costs for airlines.
As the airlines see it, GDSs and travel agencies would cede some control of the airline customer to the airlines, and the carriers are looking to pay GDSs a lot less in fees if they want to have access to these airlines’ ancillary services.
If the drive to create an NDC ever goes through, airlines would be empowered to reach more passengers with more marketing offers through a broader array of distribution outlets.
It’s all part of the airline drive to build up their ancillary-fee capabilities, which would undoubtedly escalate.
And, implementation of NDC in the far-off future would also serve to mute the cry for airline “transparency,” as GDSs and travel agencies playing ball with the airlines would be able to display a broader array of airline services for comparison purposes.
However, GDSs and travel agencies won’t readily want to change the status quo and their role in the distribution ecosystem so expect plenty of fury.
The Daily Newsletter
Our daily coverage of the global travel industry. Written by editors and analysts from across Skift’s brands.
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