As airlines push travel agents from GDS to NDC (using tactics like levying fees for GDS use, shifting the best fares to NDC-only and allowing only direct bookings to count towards loyalty rewards), many in the industry believe the push is premature.
“I'm disappointed. The airline sector together with Iata, who helped build those standards, have done a poor job of recognising and understanding the business needs of their distribution channels – the travel agents,” says Otto de Vries, CEO of Asata.
The two main challenges presented by NDC appear to be the disjointed approach to content provided by airlines and the fact that its abilities are only a third of the capabilities required to fulfil ‘modern airline retailing’ aspirations.
Implementation
"The first challenge is that whilst NDC is an Iata standard, there is no requirement for members to adopt the standard, which means that airlines have made their own business decisions on how they will or won't integrate NDC into their distribution processes," says De Vries.
According to Iata, in 2022, of airlines' total indirect offerings, just over 30% of their indirect options were presented on NDC. Furthermore, airlines are independently choosing which content to put on NDC, and these do not align across all the airlines.
"It has just become so disparate and all over the shop. Without consistency, immense pressure is placed on distribution channels as they have to find ways to integrate the offerings without disrupting their business flow," explains de Vries.
The approach used to introduce NDC, has left the responsibility up to travel agents to integrate NDC offering with all the other GDS offerings, on back-, middle- and front-end dashboards, overwhelming and overflowing distribution channels, he says.
NDC: One third of the way
“I have real concerns about NDC: one of them, the fact that it has existed for 12 years and there's still such a lot of confusion and uncertainty. Now it’s apparent that NDC is just a piece of the whole modern airline retailing system.”
De Vries explains that modern airline retailing sits on three legs: NDC bringing the offers for retailing, the delivery of ‘offer and order’ standards, and digital identification. Of the three, the industry is currently only able to visualise NDC.
According to Iata, the digital customer identification standard will comprise a digital database of customers’ biometric and travel logistics information in order to streamline information-sharing between airlines, distribution channels and consumers. Iata says this is to ensure contactless and seamless processes at airports for travellers.
The ‘order’ standards are intended to allow travellers to aggregate all reference numbers and documents including Passenger Name Records (PNRs), e-tickets and Electronic Miscellaneous Documents (EMDs), throughout travel disruptions and itinerary changes.
“But if we talk about what ‘orders’ look like and what a digital ID looks like in the real world, we are so far away from the dream,” points out De Vries.
Nonetheless, large GDS providers such as Amadeus, Travelport and Sabre are investing billions into integrating NDC offerings into more holistic ‘offer and order’ systems.
“I'm not suggesting that we shouldn't dream, I'm suggesting NDC's introduction was done particularly badly,” concludes De Vries.
At the Web in Travel Africa conference on March 14 and 15, in Cape Town, senior travel industry executives had the following to say regarding NDC:
John Friel, Country Manager Travelstart:
-
“Who are the big players? Singapore for sure, is one of the number-one partners in the NDC because they understand it, they get it. The biggest issue with NDC is that airlines don’t actually understand it themselves. They think they know what it is, but they don’t.”
-
“We sit and talk with airlines about NDC strategy and they say ‘I’m waiting for airline X to go live and I’ll learn from their mistakes’… A couple of African airlines are getting it right, Kenya Airways for one, where they started an NDC strategy that is more around GDS charges. More recently Emirates in this particular market has started taking a much more aggressive approach, which is taking booking classes out of the GDS. From a Travelstart perspective, what that has done is move 60% of all our Emirates traffic to NDC by doing that one thing. I can see the trend in the next couple of months moving to a more aggressive approach to that.”
Louis van Zyl, Founder and CEO of Trans-End Africa, a tech platform that allows direct connect content aggregation:
-
“Where NDC is emerging, it’s a growing initiative... But the important part here is that it doesn’t necessarily have to be the answer. I still believe there is a very good, valuable role to play for the GDS systems.
-
“It’s a new technology and filled with new opportunities for new adopters to take it from there.”
-
Van Zyl said the travel industry had sourced, selected, searched for, bought and paid for travel products that had been the same for 60 or 70 years.
-
“Along comes NDC which does push them out of their comfort zone… As with anything new, there is a lot of resistance to it.”
Liezl Gericke, Virgin Atlantic Head of International (Africa, Middle East & Asia Pacific):
-
“We’ve talked a lot about the elephant in the room today, NDC. Our approach is very much ‘let the others mess it up and then we’ll come in and do it better’. But Delta (a 49% shareholder in Virgin Atlantic) and Virgin Atlantic are super-aligned in terms of our approach to the NDC proposition and we all believe in being multi-channel first.”