As airlines shift to New Distribution Capability (NDC) protocols, it’s important for corporate travel managers to understand its effects.
The air travel industry is undergoing a major technological shift, and at the heart of this is New Distribution Capability (NDC). It’s possible that you’ve already felt the transformation while booking flights, as airlines increasingly move away from the old standard of global distribution systems.
NDC isn’t just a new set of technical standards. While in the past airlines could only show basic flight details, NDC standards enable rich, personalized content and tailored offers. But at the same time, it requires careful management to ensure business travelers still enjoy a seamless booking experience through corporate booking tools.
In this blog, we’ll discuss the new NDC standard in a jargon-free way so that you can better understand how it works as well as its potential travel planning benefits – both in terms of better content, and potential savings.
Developed by the International Air Transport Association (IATA), New Distribution Capability, or NDC, is a term describing the data interface allowing airlines to sell their products and services in a modern, flexible way.
Compared to the old, text-only booking systems, NDC enables carriers to create personalized offers using rich content like detailed descriptions and photos. This gives airlines greater control over the products they sell, while giving customers a more retail-like buying experience with plenty of choice. We’ll go further into how this works, and how it’s different to the old standard, below.
Before NDC, the industry relied solely on a standard called Electronic Data Interchange for Administration, Commerce, and Transport (EDIFACT) combined with global distribution systems (GDSs).
For over 40 years, EDIFACT has been the interchange used to transfer booking information, including fares and flight schedules, from airlines to travel sellers. It completes these transfers using intermediaries called GDSs. A GDS aggregates data from travel providers, including airlines, and then shares with sellers like online travel agencies (OTAs) or travel management companies (TMCs).
This is the standard you’ve been using for years whenever you’ve needed to search, book, and manage business travel itineraries. Yet there are some limitations to relying solely on EDIFACT And GDS, which NDC was designed to address.
With today’s business travelers expecting flexibility and control over their own itineraries, traditional systems are often too rigid. EDIFACT’s booking classes are limited to the 26 characters of the English alphabet which restricts airlines from expanding their services in a competitive marketplace.
IATA began developing New Distribution Capability in 2012 using the web-based XML data protocol. This gives carriers the ability to present a wider range of dynamic pricing options in real-time, along with ancillary services like extra legroom and priority boarding that EDIFACT doesn’t support.
While NDC hasn’t replaced EDIFACT, it fills in its limitations. This gives travel sellers more options than ever before, while enhancing direct communications between airlines and booking websites.
While many GDS providers are working to become NDC compliant with the integration of airline APIs, there are currently several differences between GDS fares and NDC fares.
GDS fares:
NDC fares:
The new standard brings an array of potential benefits, seen throughout the business travel management process.
For corporate travel managers, one of the primary benefits of NDC airfares is cost savings. With access to a wider selection of custom fare options and bundled ancillary services, it’s easier to find fares that meet your preferred price point. You’ll also avoid the surcharges that airlines add to bookings made via GDS systems, resulting in better control over travel budgets.
Business travelers will feel the difference as well, with the technology enabling custom suggestions and rich content displays throughout the booking process. Travelers can view seat maps and add-ons like airport lounge access, selecting a product that best meets their wants and needs.
With NDC, airlines can also use historic data to craft personalized offers based on past trip bookings and individual traveler preferences. Users are presented with a seamless booking experience and bundled packages containing preferred ancillaries like extra leg room and Wi-Fi.
Better communication is a universal benefit for NDC. With advanced data analytics and a direct line between carrier and customer, you’re provided with real-time updates and notifications about flight cancellations. This reduces anxiety for business travelers in transit, while giving travel managers better visibility over their teams.
It’s clear that this technology is still in progress. The IATA monitors this progress regularly with industry updates. At the time of writing, it states that better visibility over their teams are certified to use NDC in some capacity, though they may not yet be offering all content through this standard.
Examples include:
When working with NDC airlines, you’ll be able to make a booking either directly through their own website, a dedicated NDC API, or an indirect NDC channel.
Third-party intermediaries, like travel aggregators and GDSs, can connect to the airline’s specially designed NDC APIs to access real-time airline offers, fares, and ancillary services. While still using third parties, many of these airlines are waiving the usual GDS fees to give full NDC benefits.
Of course, transitioning from one standard to another comes with some technology challenges to navigate.
The primary challenge is developing extensive legacy systems. Many travel management companies and booking tools, as well as the airlines themselves, are designed to work with EDIFACT and GDS standards. These must be modified to accommodate the more modern NDC standard, which involves integrating APIs and ensuring all associated systems are compatible.
The second challenge is collaboration. For NDC to become standard across the full travel industry, stakeholders must adapt together. This requires collaboration between distribution partners, technology companies, regulatory bodies, and airlines. And once it’s implemented, airline staff and travel agents must receive full training in NDC’s benefits and technicalities.
Though there are still challenges to overcome, NDC will change the way airlines, travel agencies, travel managers, and individual business travelers engage with one another.
Changes to the travel industry:
Changes to travel management:
Changes to the business travel experience:
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NDC holds promise for airlines, but it is still a technology in progress. In the meantime, Tripeden.com for Business gives access to a wide selection of flights and fares. You can use our comprehensive, free travel management tool to access business flights from over 380 airlines. Then, with booking filters, you’ll be able to narrow down options to create custom itineraries that fall within cost and compliance restraints, ensuring a smooth, user-friendly experience.
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