5 min read
The global buzz around the NDC (New Distribution Capability) is getting louder by the day, as corporate travel buyers increasingly agree that the NDC is ‘a positive thing’ for the travel industry. New research from Business Travel Show reveals that one in five buyers (18%) believes the NDC offers more transparency with pricing.
A lot of noise has been made around how this new set of rules by the International Air Transport Association (IATA) will ‘facilitate’ communication between travel agents, but what changes can travellers and travel agents expect?
Offers tailored to the client’s preferences
With NDC, travellers can choose to save their information to their profile.
Those who suffer from Big Brother phobia can rest assured they don’t have to save their details to their profile. However, by saving their information, they can have the benefit of easily customising their search results.
For example, Wi-Fi on the plane could be included in the company’s corporate agreement with the airline, while for the leisure traveller, Wi-Fi would cost an additional R150 on the same flight. The different pricing results will immediately be reflected in the NDC results, giving the traveller a more accurate overview of what they can expect to pay.
Thanks to the NDC, airlines will also be able to access any personal information the customer is willing to share to construct an offer tailored to that specific client. Take for example Lufthansa. The airline could send the client an offer for a Bavarian brewery tour if they have a long stopover in Munich.
A faster service from the travel agent
For the travel agent, the new communication standard means they can pay for a preferred seat, add additional baggage or re-order catering through any Global Distribution System (GDS) they are using instead of having to book this on the airline’s website.
Right now, if the client wants to book pre-boarding or pre-pay for their luggage with the travel agent or the Travel Management Company (TMC), the consultant has to leave the GDS. With NDC, agents will be able to shop for all these services in a single transaction in one place.
Travel agents will be able to offer their clients a lot more options in a more efficient way, whether they would like extra legroom, extra baggage fees, comfort class upgrades or special meals.
A visual representation of what to expect from your travels
Is the client hesitating whether that extra legroom is worth the splurge?
Since NDC is based on a high-quality XML standard, both travellers and travel agents will have access to a rich content experience with pictures and videos. That means that the travel agent can show exactly how much extra space the client is actually buying. It also makes it easier to compare several items (and airlines) at once.
For travel agents, the visual representation means it becomes easier to communicate with clients about product differentiation beyond price and schedule.
The ability to comparing apples with apples
It can sometimes be hard for clients to understand exactly why the travel agent or TMC advises them to pay more for a flight that leaves at about the same time and follows the same itinerary.
Why would they fly Air France instead of British Airways for example if they’re headed to Brussels? One will take them via Paris, the other via London, but other than that: what’s the difference?
Thanks to the NDC, the travel agent or TMC can show their clients what the seats on their chosen airline look like, and help them compare what they can expect from the lounge and what mileage they earn on each airline.
An easier way to book low-cost carriers
The rise of low-cost carriers, which were traditionally outside the GDS, have seen travel managers lose visibility and control of a growing proportion of their air spend. The NDC could help in this regard.
IATA explains that for low-cost carriers with no GDS presence, NDC will enable such a carrier – which today only sells direct to the customer – to sell via travel agents and TMCs, using technology compatible with their website.
If it’s that great, why is not everyone jumping on the NDC bandwagon?
Firstly, the NDC implementation doesn’t come cheap. The technology is expensive and it’s not a mandatory requirement for any airline or travel agency.
The NDC is not a uniform technology either and can look different from one organisation to the next. There are different versions of NDC as well as different levels.
How about the surcharges airlines have started charging?
A number of airlines have started charging fees for bookings made in the GDS, instead of through their own channel or through the NDC. Among these are Lufthansa, British Airways, Iberia Airlines, and Air France – KLM.
The Flight Centre Travel Group has signed multi-year distribution deals with most of these airlines to eliminate the booking surcharge. This means that FCM Travel Solutions’ clients will be exempt from the surcharge.
Further good news is that the three main global distribution systems: Amadeus, Travelport and Sabre, have all decided to get on-board with NDC capability.
The reality is that the NDC could have profound effects on how air travel is booked and marketed to travellers in the next few years. Exciting times are ahead…