Update: May 18, 2023. In paragraph 12, the information was updated to reflect that not all agents, but agents who are Amadeus users can book flights on the GDS and book the associated ancillaries on NDC – all bookings will be integrated, purchased and linked on the same platform, and also that it is on the Amadeus platform that NDC segments are an active flight segment so the NDC booking will appear in the GDS PNR and reporting will continue but will also include additional airline products purchased.
NDC and how it works in the travel agency environment – this is the first in a series in which Travel News speaks to role players to get an overall perspective. Part 1 is the perspective of an NDC distribution channel, Thomalex, and a word from Iata.
Iata’s New Distribution Capability (NDC) is transforming the airline retailing landscape from that of the traditional GDSs that have defined the travel industry for decades.
The NDC allows carriers to adjust airline offers to suit current market demands and customer preferences in real time rather than rely on GDS systems that provide static airfares.
The rise of low-cost carriers and seat-only ticket options means that airline ancillaries are becoming an increasingly important way for airlines and travel agents to differentiate themselves from their competitors and make more money by upselling airline products.
Travel News spoke to Louis van Zyl, MD of Thomalex Africa about NDC. Thomalex Africa has developed an agency tool that provides for all affiliates like Multi-GDS and NDC content, low-cost carriers, charters, bedbanks, travel insurance and Blue Ribbon bags, all in one platform. Van Zyl says that in future, having only GDS content will cripple your business and it is an absolute must to have a wider range of direct integrations.
What is NDC?
NDC is a new standard of transmitting data, developed by Iata. NDC allows airlines to distribute their individual products to travel agents (like booking your baggage, WiFi and meals separately and accessing low-cost airfares) in real time. Airlines see NDC as an enabler to deliver more content to travel agents to increase revenue and also to improve the travel experience for their customers. NDC is not mandatory, it’s a choice, and it runs alongside the GDS. One of the differences between NDC and GDS is that, while using the GDS distribution channel, the travel agent is issuing the ticket using the GDS/Ticketing System provider solution, however the NDC transaction is issued by the airline itself.
What changes for the passenger?
Clients will benefit from their travel agent being able to access and upsell a range of airline products and extras as well as having real-time access to competitive pricing and the newest market segment airfare offers.
Rich content available from airlines aligned with NDC will provide an enhanced passenger experience. (Rich content refers to the information and media accessible through NDC to showcase the features of these experiences, for example, videos of business-class suites, photos of seats with extra leg-room, or information about a first-class airport lounge.) Dynamic pricing (charging a higher price at a time of greater demand, and a lower one at a time of less demand), and the delivery of personalised offers will enable agents to optimise fare prices and deliver a more personalised customer experience and, of course, they can increase revenue by adjusting their service fees accordingly.
How does NDC impact corporate travel agencies?
NDC creates growth and creativity in the corporate travel environment, benefiting corporate travellers and increasing travel agent revenues. For example, WiFi or meals on the flight could be included in a client’s corporate agreement.
NDC is not a system or database, it is a different method for exchange of data between airlines and travel agents. It enables consultants to shop and order airline products from airlines on behalf of their customers, providing a better product. For the corporate travel agent, the new communication standard means the travel adviser can pay for a preferred seat, add additional baggage or priority boarding on a client’s behalf through NDC, which sits on the GDS platform and is integrated into the one desktop they are using. NDC is to the travel agent what the website is to the client and those offerings can enhance corporate contracts giving clients more content that can be built into their existing contracts and reporting models.
Agents need to be aware that NDC-booked inventory does not form part of GDS override agreements.
How do GDSs benefit?
GDSs are investing in NDC to bring value to travel agents, making it easy to search, compare and book. NDC will be fully integrated into existing GDS work flows, ensuring the evolution of GDS systems so that more content from more sources is accessible and they all come together in one platform. Integrated NDC content on the back end will push out NDC content with other GDS content ie agents who are Amadeus users can book flights on the GDS and book the associated ancillaries on NDC – all bookings will be integrated, purchased and linked on the same platform. On the Amadeus platform NDC segments are an active flight segment so the NDC booking will appear in the GDS PNR and reporting will continue but will also include additional airline products purchased.
How do airlines benefit?
Iata Resolution 787 (Enhanced Airline Distribution) allows airlines to manage the distribution of their range of products and services effectively, irrespective of the distribution channel. Enhanced standards are necessary to enable airlines to move to a more dynamic content distribution model. NDC recognises that airlines and their customers need more real-time dynamic interaction with travel agents so they can offer all their products in one place and enhance the airline ‘shopping’ experience.
An Iata spokesperson told Travel News: “Airlines will count on NDC for a full post-COVID rebound, providing more offers and making more sales. Some smaller carriers have not invested in NDC and are still only available on GDS but the standardisation of NDC is the end goal, to make it work for the entire travel industry. Additional ancillary revenue opportunities, and increased business traveller satisfaction is the way forward.”
