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An update on the New Distribution Capability (NDC) Program

What is the NDC program?

The International Air Transport Association (IATA) is updating its Global Distribution System with New Distribution Capability (NDC). Something many may be asking is: ‘What does all that even mean?’. In short, it means good news for all air travelers. Basically what is happening is that the International Air Transport Association is beginning to update the types of things it can offer through third parties. A perfect way to think of it is like this: traditionally some of the best deals could only be obtained by going through your airline directly, but now with the update of the New Distribution Capacity, you will be able to get more of the enriched content that has traditionally only been available directly through your air carrier. This means that third-party vendors can begin to craft specific types of travel profiles for you to better serve your customer’s travel needs.

This is also especially helpful if you are a person who uses a travel management company. In the past, of course, travel management companies and travel agents had access to the Global Distribution System but were not necessarily able to view the enriched content that was offered directly from the airlines themselves. So while a certain airline might have a screaming deal on their homepage, if you attempted to find it through a third party vendor or travel management company, that deal might not be readily available or visible. However, with the New Distribution Capacity these types of enriched airline content will soon become more available to more third-party vendors helping to improve your travel booking experience.

Now that they started to implement it, what has changed?

One of the best ways to see what has changed is to have an idea of how the industry was before the change occurred. In the days before New Distribution Capacity there were a variety, and continue to be a variety, of Global Distribution Systems. Each of them was created and designed by different makers with proprietary software not readily available to all travel management companies or all third-party websites. Because of this, the types of deals you got depended largely on where you went. Because no single GDS had access to all of the enriched content offered by the airlines or travel services, your deals could fluctuate wildly depending on which service provider you used.

Now certainly you could compare between the various Global Distribution Systems as well as visit all the individual sites of the airlines to find out deals for your customers, but this is a time-consuming process and very inefficient. It would also be difficult to gauge how good a deal was because without a close study of the additional fees that certain airlines have, it would be hard to tell whether a ticket was actually a deal or not.

A perfect example would be like this: you find a flight to Las Vegas for $140 from airline A. Then you find a flight to Las Vegas with airline B for $100. The problem is that airline A might not charge you for your first checked bag while airline B does, so even though airline A is $40 more expensive per ticket than airline B, airline B charges you $50 to check your first bag making your client’s actual travel costs $150 instead of $140. Without reliable access to these types of differences between airlines, their fees, and their potential sales the content was not always as clear-cut if you were getting the best available flights.

NDC brings it all under a standardized banner. In place of having different types and kinds of GDS, NDC allows for a single entity to help provide all of the content available across all the different airlines. This means that your travel management company will be able to compare the true deals and values across multiple airlines by being able to view all of the offers that they traditionally feature on their website as well as those offered by third-party vendors on behalf of the airline. This can even include things like pre-checking a bag, ensuring that your customer gets his or her favorite types of seating, and gaining the ability to make quick itinerary changes by having all travel management companies utilizing the same system.

What impact is it having in the industry?

Although the process has been under way for some time, the actual implementation of New Distribution Capacity has been rolling out in a more serious way only since early 2016. Because of this, the long-term positive impact in the travel industry is difficult to gauge but certainly simplifying the process by bringing in GDS into a single standard and offering greater content to customers will have a positive impact in the way the industry books flights and provides information to its customers.

Is the travel community accepting it?

The answer is an unequivocal yes. According to Airlines International, 15 of the 20 largest providers by revenue have already begun or are beginning to implement aspects of the New Distribution Capacity. Two of the most notable of these are British Airlines and Qatar Airlines. With large airlines like these beginning to see the efficiency of the New Distribution Capacity’s ability to help provide enriched content, it will not be long before NDC becomes the industry standard.

What will the future be?

The future will eventually become one where every deal, every coupon, every price-affecting fee or surcharge will be known. It will be a future where no matter what travel agency or travel management company you use, you will be able to have the same high-quality deals and standards across the entire industry. It will be the ability to know exactly the pricing and also ensure that you get the greatest prices available to your clients. The future will offer greater convenience with the ability of swiftly changing your customer’s itinerary as well as the ability for them to pre-check bags and take advantage of other beneficial side effects. So with New Distribution Capacity becoming more readily available, what will the future be? The answer is better!

2017-07-20T14:48:17+00:00 December 5th, 2016|Categories: Blog, Travel Technology|34 Comments


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