The past year has been far from quiet for New Distribution Capability. While NDC’s decade-long evolution continued to lurch along, American Airlines shook things up with its April announcement that it would begin offering third-party public channel content only through NDC connections. Then in December, United announced its own move to limit bookings through its small business loyalty program to those clients booking through travel management companies.

Exactly where such moves will lead remains unclear. In United’s case, that includes phasing out PerksPlus, a program for small and mid-sized enterprises that spend more than $5,000 annually on business travel on United and its joint venture partners.

“The move is the first step of several in the longer term that will end up with us ultimately sunsetting the PerksPlus program and platform entirely, and moving all customers onto United for Business,” says Adam Keeter, director, United for Business product strategy and alliances.

This follows the 2022 introduction of the United for Business portal, which gives administrators the ability to take steps such as choosing a company travel plan, viewing reports on travel activity, and setting preferences for booking and payment. “As more features have been rolled out this year, we’re moving small and mid-sized enterprises that already use United channels for their PerksPlus travel to the new portal to deliver more functionality and a better customer experience,” Keeter adds.

For others across the travel landscape, the pace of change is also gathering momentum. “What seems clear is that we’re past the building phase of NDC and are moving towards acceleration,” says Jay Richmond, senior director, global solution consulting, Amadeus. He notes that 71 airlines are now certified by IATA’s Airline Maturity Index, and 23 airlines are currently live with NDC-based content through the Amadeus travel platform.

In recent months Amadeus has seen a significant growth in bookings, with five times more NDC-based bookings than last year. Within the distribution mix for a few airlines, one of three bookings is now NDC.

“One of the most important ways to accelerate the adoption of NDC is to focus on content innovation, to create tailored offers and differentiate the content to provide added value to travelers and corporations,” Richmond says. “Over the past year, content differentiation made available through NDC is increasing, and both airlines and their tech providers are working hard on building additional merchandising capabilities.”

Similar growth has been seen at ARC, according to Paige Blunt, senior manager, Direct and ONE Order. She reports that the number of airlines implementing NDC in their distribution channels increased by seven in 2023, bringing the total number of ARC Direct Connect airline participants to 27. Plans are to add a comparable number in 2024. The volume of NDC transactions has also increased. ARC began the year with about 9 percent of its overall transactions coming through ARC Direct Connect, but as of November, that total was up to 17 percent for the month.

John Keichline, CEO, USA for Reed & Mackay, notes that the majority of big NDC developments in airlines’ own technology has taken place in the past year, while in some cases further TMC integration has been slightly slower. His company has been preparing for the transformation in air travel shopping and buying by working with suppliers, and has recently integrated British Airways NDC into its proprietary technology.

"There are still certain types of airfares and routes that can’t yet be booked via NDC – such as for the marine industry, where much more information is required for the purchase of tickets – but it will get there," he says.

Lane Shifts Ahead 
While AA has drawn widespread attention with the boldness of last year’s move, other aspects of its focus on NDC may not be as well recognized.

"We’re the only carrier who has connected our NDC content to all three global distribution systems, including Sabre which launched its NDC connection with American earlier this year,” according to Neil Geurin, managing director of airline retailing at American. "We continue to add new functionality for those who use NDC." As one example, he notes that technology partner Accelya has developed a solution to address the challenge of exchanging unused GDS tickets in EDIFACT for use in NDC.

American is currently at about 70 percent of revenues booking through its direct channel, including NDC technology, and continued acceleration is expected. "NDC technology is now our primary mode of distributing our content to third parties,” Geurin maintains.

Just what will the coming year bring? It’s unlikely that NDC will be resolved in 2024, but it will be better than it is today, says Julian Russell, executive director information technology and supplier relations, GlobalStar Travel Management. “Currently there is no single platform offering an end-to-end servicing solution for all NDC carriers, and this is unlikely to change in the year ahead,” he says. “However, the GDSs are making real progress.” He notes that a number of combined agent and OBT platforms are also beginning to offer attractive NDC solutions, while the NDC aggregator platforms continue to offer a more complete solution right now.

Peter Vlitas, executive vice president, partner relations for Internova Travel Group, looks for 2024 to be a continuation of 2023 with airlines rolling out NDC while the industry, OBTs and the GDS play catch up. "This will create certain confidence issues by travelers and corporations, especially in their ability to offer the best value," he says. He looks for continued distribution challenges as all the content players rapidly try to fix their systems so they can offer the full benefits of NDC while supporting all the servicing functions required.

“Airlines will continue to push for NDC enablement within corporate travel in key home markets as they look to further recover profitability and their cost invested so far,” says Thane Jackson, senior vice president at BCD Travel. He also expects the GDSs to make further progress to deliver servicing capabilities that are critical to corporate travel. He says they remain the parties equipped to aggregate widely varying content and present it in standard, digestible formats that enable post-booking servicing and reporting, all with an acceptable ongoing cost at scale across the corporate travel landscape.

American’s Geurin also anticipates significant progress. “We will continue to work with our technology partners and tech-forward TMCs to enhance features and functionality in NDC connections throughout the next year,” he says. “We expect greater adoption in the corporate travel market as corporate booking tools incorporate NDC into their technology platforms.” As an example, he notes that Concur’s new travel platform has American’s NDC content via Sabre and will soon be available through Amadeus and Travelport.

Caution: Speed Bumps 
Certainly, challenges remain on a number of fronts. “There’s a lot of expectations and opportunities to modernize travel retailing with NDC,” says Kyle Moore, global head of customer strategy at Travelport. “But in the last year, it seems that much of the industry has forgotten that NDC, at its core, is just another source of content.” He feels that despite great progress over the past year, more work needs to be done for NDC to truly drive modern travel retailing forward.

The greatest challenge with NDC is still consistency, according to Russell. “In this post-COVID era, TMCs do not have enough resources available to source and service NDC through multiple channels,” he says. “There’s a risk that the additional fees needed to manage the fragmented solution currently in place will negate any savings from the NDC fare itself.” He predicts that over time this will resolve itself. At that point, TMCs will have to decide on a longer-term strategy – GDS, alternative platform or direct API connectivity.

Moore sees the need for a greater focus on service. “As we see more and more industry players celebrating the ability to access and book NDC fares and offers, there’s a servicing aspect for NDC-sourced content that seems to have been de-prioritized or overlooked entirely,” he notes.

This is a reality despite the growing hue and cry for agents to be able to easily manage returns or exchanges. Moore notes that travelers want to be able to make changes quickly and easily when needed, even if it means switching from an NDC-sourced ticket to an EDIFACT-sourced ticket. To meet these and other traveler expectations, agents and travel managers must be able to quickly process a refund or exchange without having to point customers to the airline to manage modifications. “Effective NDC solutions need to be built with agency and traveler needs in mind, and not just focus on the airline community,” he says.

Merging Traffic
From American's viewpoint, more modernization on the part of some others is needed. "Adoption of NDC by corporate-focused travel agencies and travel management companies remains a challenge as several parties are involved, especially the corporate online booking tools, who need to modernize their technology," Geurin says. “These businesses need to evaluate their tech stacks and should look toward modern technology such as NDC so they can continue to serve our mutual customers.”

Richmond argues for continued standardization. “For the entire industry to get on board, we need to prioritize a streamlined flow and user experience for everyone involved,” he says. He predicts that this will be achieved as more and more airlines move to the latest NDC version, 21.3, since the description and guidelines of how each flow should be implemented and working have been enhanced.

The perceived value of NDC presents an ongoing challenge that shouldn’t be overlooked, Russell adds, noting that the concept of NDC was originally introduced with a focus on delivering value and personalization to the end traveler. “The focus for the GDSs and other platforms has understandably been on the technical integration, while airlines have focused on delivering like-for-like content,” he says. “With few exceptions we are yet to hear about the promised end user personalization.”

Previously unanticipated shifts may also be seen, according to Steve Reynolds of Tripbam. “It’s not just about NDC,” he says. “Fares only available on airline websites could potentially be a much bigger issue for the industry.” He says that as fare parity agreements between the GDSs and airlines disappear, airlines will have greater flexibility in offering lower fares by channel. “If there are significantly lower fares – both restricted and unrestricted – only available on airline websites, we could see a shift in buyer behavior and booking away from the GDS and TMC,” he notes. “Corporations will have to figure out how to capture this booking information to continue to service their travelers or pay more through the TMC.”

Road Widens
While all concerned seem to agree on the need for continued refinement, there is also good reason for optimism. “After more than a decade of prognosticating, forward-thinking views or predictions, it finally feels like NDC and its impact on travel retailing is starting to come to some fruition,” Moore says. “Like many others in the industry, we’re excited to see NDC evolve and come to life.”

With airlines around the world launching new NDC strategies, some at scale, the industry is becoming more energized toward getting a system in place, he notes, adding that progress being seen with NDC has fostered some healthy discussions around the role of distribution and how airlines can personalize their offers. “What’s even more exciting is that for the first time, the agency community is able to actively engage in the NDC dialogue – which was previously very much supplier driven – which feels increasingly healthy to me,” Moore adds. “The industry-wide collaboration is very necessary to make NDC work as it was intended, and it’s something the travel industry has been missing when it comes to introducing and adopting a standard like NDC.”

Reynolds points to lower costs for buyers. “If NDC enables lower cost distribution channels, this should allow airlines to provide lower fares to corporations or increase their margins,” he says. “However, this could reduce TMC incentives and GDS revenues which could have a big impact upon GDS and TMC financials.”

Also promising is the continued work of ARC’s NDC advancement working group, which has brought together TMCs, technology providers, airlines, OTAs and consolidators to help each stakeholder understand NDC issues as well as create solutions. "The group has been met with genuine enthusiasm and we’re encouraged by the uptick in conversations being had," Blunt says. Additional meetings of this group will be held over the next few months.
Looking to the months ahead, it’s important for buyers to talk with their TMC for information and advice to help drive the best solution for their company’s program, Jackson advises, as well as communicating with airlines to discuss the implications of their distribution strategies. “Guide your travelers,” he advises. This means helping them understand the importance of remaining within the program’s policy and parameters when shopping and booking, as their decisions can either support or compromise savings, safety and satisfaction goals.

"Business managers must educate themselves and understand the opportunities NDC offers and think outside the box," Vlitas says. "Trust and the do-no-harm philosophy by your partners have to be paramount.”