New Distribution Capability (NDC) standards will help facilitate greater personalization and easier distribution of all elements of the ticket sale. However, it isn’t a catch-all solution for all of the airline industry’s retailing challenges. Recognizing that is key to implementing NDC standards the right way.
Customers don’t care about the source of an airline deal. They don’t care if the deal originates with an airline, online travel agency, or travel management company. They ultimately want the best deal and a seamless experience. While the New Distribution Capability (NDC) standards specified by the International Air Transport Association (IATA) can help facilitate the above, the industry cannot be short-sighted and treat it as a solution for everything.
“If we are myopic about it, we are going to get it exactly wrong,” said Kathy Morgan, vice president for NDC at Sabre. “The future lies in being content-source agnostic. All content should flow through a single integrated system that is then distributed across every channel. It’s really important that we don’t lose sight of that as we think about how NDC is changing things.”
NDC can be a conduit for new types of content to be distributed. In that context, it will provide more options to the end traveler. Right now, travelers are often frustrated that they have to go to so many different places to get access to the services they want. For example, a traveler who books his or her flight ticket through a travel agent has to often go to the airline’s website to pre-book a seat.
When implemented at scale and done right, NDC will reduce that fragmentation and stitch together all the different pieces of a passenger’s air trip. It will allow the traveler to book ancillaries and upgrades through travel agencies and provide a frictionless booking experience.
The other benefit of NDC is its ability to offer greater personalization and relevance to travelers. NDC can enable more information exchange between airlines, distributors, and agencies. This will allow the distributors and agencies to understand the context and offer a personalized experience that will make the purchasing decision easier for customers. For some airlines, that means personalizing in the context of each trip. For others, it means driving relevance based on a persona or personalizing offers one-to-one.
However, the industry still has some way to go before being able to leverage NDC connections to offer real personalization. “We are seeing a basic exchange of loyalty membership information to allow distributors to offer free upgrades with certain statuses and so on,” Morgan said. “But beyond that, we are still months away from being able to deliver a higher level of personalization at scale. And that’s primarily because the various stakeholders in the industry are still building the basic capabilities that will facilitate this kind of retailing.”
But Morgan also wants to recognize that there is early evidence that some of these things are beginning to happen. “A couple of airlines are beginning to do some pretty cool things in the corporate travel space. Instead of having agencies go directly to the airline, they are providing special bundles to certain corporate members or extending access to certain services,” she said.
As airline retailers continue to adopt NDC, they will be able to give travelers more options with diverse offers. Therefore, one of the major aspects of implementing NDC the right way is to simultaneously develop capabilities that will allow travelers to compare and understand the differences between these offers. All stakeholders — airlines, NDC application programming interface (API) providers, and distributors — who consume these APIs have a role to play in that.
“Airlines should focus on data completeness so that when NDC content is distributed, it is done with enough data to totally understand the offer,” Morgan said. “It is not just about how much it costs, but the offer should also specify the rules of booking around refunds and changes, if it includes baggage, etc.”
NDC API providers should make sure that the connection is able to communicate that level of detail around an offer. Distributors such as a global distribution systems (GDSs) should be able to visualize that offer for their sellers like travel agencies. Sabre, for example, is investing significantly in how their agency desktop solution, Sabre Red 360, presents the offers. Sabre 360’s ability to accurately display an airline ticket, however, is not restricted to NDC offers only. It is able to ingest and display the differences between deals from different sources.
While many steps are being taken in the right direction to transform airline retailing and make it more traveler friendly, challenges persist. Servicing an offer, such as allowing third-parties to make changes to a ticket, continues to be one of the top challenges facing the industry. “While we are taking strides in the right direction, we are not where we need to be yet,” Morgan said. “One reason behind that is that the NDC standards did not initially focus on servicing capabilities. They were primarily focused on how a traveler shops, books, and pays for an offer. As a result, the subsequent implementation of these standards also has gaps.”
How can the industry close these gaps? That will require active collaboration between all stakeholders in the IATA forums and working groups where improvements to the NDC schemas are decided. “Because of the diversity and number of players involved, unfortunately, the time it takes for a gap to be recognized by the industry, defined, and then resolved is too long,” Morgan noted. “One thing that we want to be looking at as an industry is how we can expedite such processes. How do we accelerate this process to close technology gaps that are preventing us from delivering the capabilities we absolutely need?”
The other challenge is that airlines and NDC tech providers are interpreting the standards differently. As a result, there are disparate workflows and incongruent applications of standards that create gaps with no immediate fixes. Every time a gap appears, airlines and NDC providers create a unique solution, and that further makes it difficult for every member of the ecosystem to normalize distribution of NDC content.
There is no easy fix for any of these challenges. It will take collaboration among leaders across the air travel ecosystem to share their perspectives and build solutions that address the needs of all. One way Sabre is leading these efforts is by closely engaging with its Beyond NDC Program partners and other customers via customer advisory boards and working groups. “Efforts like these provide proof that we can and will work together to deliver the promised benefits of NDC as an industry,” Morgan said.