Aeroplane undercarriage

New NDC coms system offers huge benefits for air passengers

By: Gill Upton @gillupton1
Published: Thursday, January 29, 2015 - 11:22 GMT Jump to Comments

From next year air passengers will be able to do more transparent comparative shopping, comparing seat size, price, food offering and all while viewing videos, full-colour photos, and reading passenger reviews.

Next year a brand new communication language will be launched to better communicate between airlines and travel management companies but the industry is divided over its merits and demerits.

New Distribution Capability – NDC – will be launched by the 300-plus member airlines of IATA as a new language through which to retail their products.

The launch is long overdue as airlines are still not using the language of the internet – XML - but a 40-year-old data exchange standard for ticket distribution. It will bring them into the 21st century and airlines will be able to show more, and sell more - or that’s the idea.

Revenue from selling ancillary products will be the big winner as this already represents a huge chunk of airline revenue streams and it’s easy money for them. Unsurprisingly, airlines want to drive more sales from this, be it a meal on board, extra baggage, seat reservations and the like. Ancillary sales by airlines generated more than £32.bn in 2014, up 15% on the previous year.

For the business traveller, NDC will mean a dramatic change in how they buy seats and services. Passengers will be able to do more transparent comparative shopping, comparing seat size, price, food and beverage offering and the like. They will be able to view videos, full-colour photos, and read passenger reviews.

Trial schemes took place last year and will again during this year so the product can be thoroughly tested before being launched. The likes of American Airlines, Air New Zealand, Swiss, British Airways, Qatar Airlines and Aer Lingus have all been trialling NDC. Some are undertaking live transactions with TMCs to iron out any glitches.

One area of concern is that NDC is not mandatory; IATA is launching it and waiting to see how many airlines adopt the new standard. It’s quite possible that smaller or less profitable airlines will not be able to afford to change their systems and the industry will run with a two-tier booking system for a time. Such a scenario could mean longer transaction times and the spectre of more costly transaction fees being passed back to the corporate customer.

But it’s not just airlines that need to adopt it. NDC has to be taken on board by multiple stakeholders, namely IT providers, the Global Distribution Systems (GDSs such as Amadeus) and industry aggregators. The major GDSs adopted NDC last autumn and they are busy creating their own solutions for travel management companies.

The corporate business travel community is concerned that that these all-new, all-singing & dancing sites, with their tantalising array of products and services available at the touch of a button, will tempt their travellers to book services or products outside their company travel policy. What the traveller will see is a personalized package based on their travelling history.

There is also a question mark about what fares will be offered. Airlines could black out budget fares on a high yield flight, for example.

NDC has had a bumpy ride to date because IATA chose not to collaborate with the travel trade in shaping the early concepts of NDC. The airline body has been playing catch-up ever since to overcome negative feelings in the industry. Now all eyes are on how further developments unfurl.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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