Until recently, discussions about New Distribution Capability tended to focus on its basic value. Many were asking, why NDC? But as it continues to develop, the question seems more directed to the pragmatic: How do we make NDC work? Given recent progress, now may be the time for travel buyers to step up and create policies that reflect this new reality.
According to IATA, some 147 companies including airlines, IT providers and aggregators (including all three GDSs) have now successfully taken part in the NDC certification program and are capable of sending and receiving NDC messages. Building on this broad acceptance, the focus has turned toward driving a critical mass of NDC-based transactions, says Yanik Hoyles, IATA director, industry distribution programs.
Hoyles notes that to pave the way to critical mass, the NDC Leaderboard was launched in October 2017, composed of airlines that seek to grow their NDC volumes rapidly. By 2020, the 21 Leaderboard airlines hope to have 20 percent of sales powered by an NDC API.
“Concurrent with these activities, we have introduced changes to the NDC certification program to better support the industry through this phase of rapid volume growth,” Hoyles says. The changes include recognizing the ability to process service messages such as flight changes and cancellations using the NDC standard through NDC level 4 certification.
A new designation, NDC@Scale, was introduced in May. It recognizes the ability to support large volumes of NDC-supported transactions, with special recognition of those that have capabilities to meet business travel needs.
With such progress, NDC has moved well beyond the conceptual phase into the action phase, Hoyles says. He notes that airlines such as American Airlines, Lufthansa, Air France/KLM, British Airways, Iberia and Qantas are using NDC APIs to distribute their products and services in third party channels. In addition, TripActions recently announced the launch of its NDC-enabled business travel platform with United Airlines.
Shelly Younger, senior manager of airline retailing strategy and head of NDC for ARC, reports a corresponding shift in NDC conversations. The scope and pace of those discussions depend heavily on the distribution and retailing strategy of airline, agency, corporate travel buyers and travelers, together with technology partners. This has included more collaborative discussions across the value chain, especially in the US.
“Most recognize the need to bring all the stakeholders together to identify solutions that will fit with the way they do business,” Younger says. “Creating solutions that are flexible and meet the needs of everyone will be the linchpin of the success of NDC.”
While NDC adoption has been slower in the US than other areas, Younger notes that is not necessarily a negative. “It just speaks to the need to make sure all stakeholders are ready and can incorporate changes effectively,” she says. Many of the ARC and airline conversations center on the airline’s desire for the travel buyer and traveler to be able to access its content, fares, and ancillaries, through any channel. “NDC is a mechanism to make this a reality.”
Similar sentiments are driving work at Farelogix, according to CEO Jim Davidson. “The focus right now is on both implementation and adoption,” he says. Davidson cites efforts on behalf of airline customers with numerous distribution players, including several active NDC API integrations with all the GDSs.
Are We There Yet?
Certainly a number of challenges remain with NDC. Dale Eastlund, senior director, global network and technology platforms for CWT, says despite recent progress, the process is far from complete. “It took more than ten years to completely move off paper tickets,” he says. “With New Distribution Capabilities, we expect it’s going to take time to work through the multi-layered complexities and competing needs of the supply chains.”
He says items that have yet to be addressed, depending on the airline, include security rights as to who can manage a booking, practices for notifications for schedule changes and irregular operation, and slow response times. He adds multi-passenger itineraries are currently not in the scope of NDC, and interlining standards have yet to be created in some cases.
Scalability and security rights, including who can manage and work within a booking, also present challenges. The same goes for performance and productivity impacts. “Not having schedule-led shopping could have a significant impact to agent productivity,” Eastlund says. “And the ability to service or change a reservation after a booking online, without having to call the airline to make a change, also needs to be fine-tuned.”
Mohit Chandiramani, director of air and global mobility at Egencia, also points to challenges in scalability and serviceability of content booked through NDC channels. “Corporate travelers expect their TMC to deliver a service beyond just the shopping and booking experience,” he says. “Whether it’s efficient offline servicing, duty of care or reporting, the industry needs to work together to build these pillars for content delivered through NDC channels.”
Updating Policies
Travel buyers should be getting ready with updated policies as NDC-enabled content becomes more widely available, says Ilia Kostov, senior vice president, global accounts and Americas business travel agencies for Amadeus. His company is now preparing to deploy its NDC-enabled flagship solutions globally for travel agencies, including web services and selling platform connect.
“There is still a good amount of time remaining for most airlines to develop standards to fully address post-booking servicing, scalability and performance,” he says. Without these capabilities, he notes, the corporate travel buying experience will be frustrating in terms of latency in waiting for an airline offer, which should take sub-seconds, not tens of seconds. Buyers will also find that the inability to change or service a booking once it has been made is aggravating.
“With long response times and/or without the ability to service a booking after it’s been made, NDC content will be incredibly cumbersome for travel buyers and will remain significantly inferior to what we as travelers are accustomed to today,” Kostov says.
At the same time, Davidson points to recent progress as well as future potential. “With NDC, the airline has much more capability to deliver relevant and real-time content,” he says. “This will be a major win-win for the airline-corporate relationship.”
Younger says the whole omnichannel approach will allow travel buyers to book through multiple channels and is designed to meet the needs of a broad spectrum of corporations – from those sectors that have tighter travel policies to those that allow their travelers to book outside or don’t have booking tools.
“The actual travel policy is unique to the organization structure and culture, where an array of factors goes into designing a travel policy,” she says. “Distribution changes and access to a broader variety of content are just two of those elements.”
Going forward, continual communication with partners will be important in policy development. “Travel buyers should engage with their TMC to understand what different content will start coming through their online and offline booking channels as a result of NDC connectivity,” Chandiramani says.
Younger predicts the future will bring more content, ancillaries, fare bundles and traveler-centric offers to the travel buyer. “The key is communication with the travel management company and other relevant value chain providers,” she says. This includes asking questions such as how accessing content across different channels will affect reporting, and how current travel policy is applied in booking tools.
“The first phases of NDC may not have all the functionality to start, so it is essential to understand what the available features are,” she says. Younger and her colleagues see NDC evolving in the US market, with the flexibility of applying corporate policy across multiple channels coming. “This market is not a one size fits all, and NDC and future distribution changes will evolve to support the broad spectrum of travel buyer needs.”
Eastlund advocates broad-based thinking about how NDC will affect policies. “It’s not about which flight to book but the whole bundle,” he says. Elements might include flight choice, type of ticket, pre-flight seat selection and boarding priority, among others.He says a policy around booking the lowest airfare may not work in the future as airlines provide more bundles. For example, the lowest fare may not be the best option for a traveler who needs to check a bag and have WiFi, as an airline may have a bundle that provides these services at a discounted rate.
Policies should be clear about what services are acceptable for travelers to purchase based on their level within the organization, Eastlund says. “While preferred carriers within a corporate travel program will offer only those amenities that you agree to, it doesn’t mean non-preferred carriers couldn’t.”
Kostov asserts that travel buyers need to be vocal advocates of choice and transparency and the ability to efficiently comparison shop across airlines, ensuring that corporations and travelers have the ability to determine if they’re receiving the most value for their travel spend. “This means corporate travel managers need to carefully consider how they will measure the value realized under agreements that involve the purchase of NDC content,” he says.
One suggestion is that corporations seek to retain their ability to comparison shop against “public” rates as part of an overall set of measures to ensure they’re truly receiving the value. For example, consider a situation where an airline offers a company a 10 percent discount off published rates. In an NDC world of personalized offers and no published rates, how will travel managers buyers know if they received the expected value outlined in their agreement?
In addition, Kostov says, travel managers should give the same priority to policies they establish with their travel providers and/or TMCs as they give their own employee travel policies. NDC will bring with it the ability to provide personalized offers specific for each corporation, or even specific to the individual traveler, he says.
“It will be important for corporations to ensure their policies anticipate and account for this level of personalization, validating that offers which may be influenced by the traveler’s personal preferences also comply with corporate policies.”
The over-arching goal should be to ensure that NDC works for the benefit of all stakeholders, including consumers and corporate travelers. “There is still a lot of work to be done,” Kostov says. “But recent progress has been promising, and we’re confident this progress will continue at a steady pace.”
Coming changes are exciting and maybe a little bit daunting, Younger says. “Having the flexibility to do business according to the needs of the travel buyer opens up amazing opportunities.” She sees a turning point in the US to be the adoption of NDC content in the GDSs, and expects to see significant growth when that happens.
“NDC is really about getting the structure in place to create that opportunity,” she says. “Having a strong travel buyer strategy, collaboration and communication with your travel partners and education sets up travel buyers to adapt quickly.”
