Our Travel Experts guide to:
Understanding NDC
Air travel has come a long way since the Wright brothers first took flight in December 1903. The first scheduled passenger flight took off from St Petersburg, FL to Tampa, FL on 1 January 1914, and the industry has been evolving ever since. From buying exclusively from airlines and travel agents to having access to all fares online, travellers have adapted to the way that airlines presented their tickets for sale. This change towards greater choice and availability for travellers was made possible with the introduction of Global Distribution Systems (GDS).
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A BRIEF HI STORY OF GDS The GDS platform is a centralised data processing system that is used to create and manage airline seat reservations with data available electronically to any travel agent, anywhere around the world. The first GDS was developed through a partnership between IBM and American Airlines with conversations starting in the early 1950s. The SemiAutomated Business Research Environment, now known as Sabre, launched in 1960, revolutionising the travel industry for both consumers and carriers. By using the GDS, travel agents could search for prices, availability and flight schedules across various airlines, making bookings for customers cost-effective and guaranteed. And airlines benefited too as they were able to avoid costly mistakes such as over- or under-booked flights, passenger service issues and under-utilised aircraft. The humble GDS is still in use today, although it has evolved to accommodate modern-day traveller demands.
How the internet changed the travel industry The advent of the internet brought new opportunities and challenges. Airlines were suddenly “online” and able to by-pass the GDS and travel agents to sell seats directly to consumers through their own websites or via third party aggregators and comparison sites. These new channels gave consumers pricing transparency and even more choice. In by-passing the GDS, airlines were able to avoid paying one of their three highest operational costs, the GDS
costs themselves. This cost-saving led to low-cost airlines being able to offer “no-frills” rates directly to travellers, and a new market opened up. The legacy airlines found it hard to compete on price, so they began to differentiate their product offering. Airlines began to offer “exclusive” extras, such as extra legroom, early boarding, preferred seating and airport lounge passes via their sites and APIs. However, TMCs booking on the GDS didn’t always have access to the full range of airline products. New “luxury” airlines such as Emirates, Etihad and Qatar began investing significantly in their end products, offering business travellers lie-flat seats, onboard wi-fi on international services, restaurant-quality food and new aircraft. Their challenge was that they couldn’t differentiate their high-end product in the GDS from others, causing much frustration. With the complexities around the GDS and its challenges for all airline types, IATA launched New Distribution Capability – or NDC as it’s known - in 2012 to standardise the different sources of content.
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WHAT EXACTLY IS NDC , AND HOW WILL IT AFFECT THOSE THAT BOOK AND MANAGE BUSINESS TRAVEL?
What is NDC? New Distribution Capability (NDC) is a modern way for airlines to distribute content – specifically around airfares and services onboard. Content covers everything from airline seats to upgrades, meals and preferential seat bookings. NDC will allow IATA to standardise the different APIs that airlines and aggregators use enabling travel management companies (TMCs) and travel agents to offer competitive and fair pricing. The idea is that airlines, TMCs and selfbooking tool providers all speak the same (technical) language and use the same syntax to exchange messages on shopping and booking components of travel. This streamlining means all the products an airline offers on its website, such as upgrades and speedy boarding, will be available to everyone.
Why is NDC being rolled out? IATA believes that NDC will transform the way air products are sold to companies and individuals. By allowing airlines to bring differentiated and personalised products to market quicker, it will also give buyers access to a full and rich range of airfares. They also believe that it will bring additional transparency into the search and book process, helping customers make more informed decisions.
IATA says: “The primary driver for NDC is the revenue opportunity. NDC will unlock value through the travel agent channel by providing it with features and content that is difficult to access today.”
What does that mean for travellers? Currently, customers who want to book a preferred seat or add additional baggage have to do so on the airline's website or app after the booking is made. But soon these add-ons will be available to select during the booking process, whether booking yourself or using a travel management company like Flight Centre Business Travel.
CHALLENGES OF IMPLEMENTING NDC. While we believe NDC will encourage innovation and competition between airlines offering business travellers greater flexibility in airfares and add-ons, it doesn’t come without challenges. Those challenges are around the more complex services that a TMC provides for its clients, such as servicing partially flown bookings and handling during strikes and weather disruption. Additionally, sometimes NDC changes the actual way a booking looks, while this may seem minor, the systems that provide Traveller tracking and client reporting are built to read bookings in a certain way, so if that changes the end-to-end processes sometimes also need rebuilding.
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HOW FCBT IS MANAGING THE ROLLOUT OF NDC Understanding the opportunities and challenges presented by NDC, Flight Centre Travel Group (FCTG) has created a new Global Airline Distribution team, who will oversee our transition to NDC. Nicola Ping, manager of air content and distribution at Flight Centre Travel Group EMEA, said: “Our corporate customers need access to good reporting, a good duty of care and flexible 24-hour servicing. By ensuring that we’re taking the NDC content from the right sources, Flight Centre can be sure we’ll get access to the content without any disruption for our customers.” TMCs, travel managers, arrangers, travellers and airlines alike will benefit. Together with our airline partners, our travel experts will be able to tailor quotes and products that meet each of our client’s specific requirements. “As a corporate customer, we will ensure that nothing changes from a processes perspective – you’ll simply get access to the new content,” confirmed Ping.
Power in numbers As part of the Flight Centre Travel Group, our Global Airline Distribution team is working with Amadeus, Sabre and leading airlines to ensure that our customers maximise the benefits that NDC can bring. FCTG is the launch agency for Amadeus NDC-X Selling Platform connect and was a launch partner of Sabre's 'Beyond NDC’ programme and is helping to design solutions that will drive travel distribution in the future. And as an active member of the IATA Global Travel Management Executive Council, we are working collaboratively with other leading TMCs to ensure NDC benefits all parties. Our sister company, FCM, is also running several NDC tests and pilots with in-house technology through its innovation entity, FCM Labs. “The ability to improve the processes that are really inefficient today is very exciting,” concluded Ping. To find out more about NDC and how working with Flight Centre Business Travel could help give you access to the best and most comprehensive range of airfares and rates, please contact us on 0208 336 6475 or enquiry@flightcentrebusinesstravel.co.uk or speak with your local Travel Expert.
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