Why is NDC important for airlines?
We have seen the evolution of airline distribution firsthand. And let us tell you, the introduction of New Distribution Capability (NDC) has been game-changing for the industry.
But why is NDC important to an airline? We are here to demystify that for you.
Traditionally, airlines have two options for selling their flights – on their website or through a third-party channel, such as an Online Travel Agency (OTA), consolidator, corporate booking tool, and so on. On their website, airlines have complete control over the customer experience. They can track every customer interaction, know what customers are looking at and if they make a purchase, and offer additional services such as seat selection and baggage fees. However, via third-party channels they have limited visibility, and airlines don’t always know what has been booked until they receive the booking confirmation.
This is where NDC comes in. By swapping out traditional technology for more modern methods, NDC closes the gap in customer experience between the airline’s website and third-party channels. You might be thinking, “But third-party channels won’t change.” You’re right, many of them still use the old technology to access airline content. But the big players in the GDS (Global Distribution Systems) world have now caught up and are delivering NDC solutions for their agency customers.
So, why should airlines adopt NDC?
The answer is, it depends. For some, it may be about access to content, while others might be more concerned with cost reduction or having more control over which travel agencies they work with. Let’s dive into each of these reasons a little deeper.
Cost reduction is a common motivator for airlines to move from traditional methods to NDC. The technology and distribution costs can be significant, and some airlines have found that NDC offers a more cost-effective solution. If you’re struggling to figure out the numbers, don’t hesitate to reach out to us at TPConnects. We’d be happy to help.
NDC also gives airlines more control over which travel agencies they work with. With NDC, each booking is a “handshake” relationship, allowing airlines to choose agents that align with their brand and customer base. Unless that “handshake” is approved, the translation won’t work. Low-cost carriers have been operating this way for a long time, but as many travel agents sell products from multiple airlines, the industry needs to standardize technology changes. That’s why the International Air Transport Association (IATA) introduced NDC.
The newer technology also gives the ability to offer more flexible and customer centric content. However, just because the technical ability is there, it doesn’t mean all airlines are doing this. In fact, the lack of new content is frequently cited as a frustration by travel sellers and corporate customers alike. To encourage adoption, it’s important that an airline understands what new content they will offer. There are lots of options here and we’d be happy to help out.
In conclusion, NDC is a game-changer for the airline industry, offering benefits in content, cost reduction, and control. Whether you’re an airline or a travel agency, it’s important to understand the reasons why NDC is important and how it can impact your business. At TPConnects, we’re here to help you every step of the way.
Next time, we’ll look at why NDC is important to a seller.
