What is NDC? Current state of play
Some refer to it as a revolution, others call it a simple technological evolution, but ten years after its creation, NDC is still the talk of the town. In concrete terms, what is the state of play in air transport distribution?
For several years, the NDC standard, intended to provide airlines with new distribution capabilities resulting in a much wider range of services and fares than those offered by the current GDS, has divided business travel stakeholders.
"It's been going on for 10 years and it's clear that it isn't easy for anyone to implement", was the unanimous opinion expressed during the two AFTM workshops at IFTM Top Resa 2022.
For Delphine Barrault, Director of Corporate Sales at Air France-KLM, the NDC standard is being implemented gradually. "Not all airlines are at the same level on this subject and that's part of the reason it's taking time."
What is NDC?
Introduced by the International Air Transport Association (IATA) in 2012, the NDC is a technical standard aimed at modernising the distribution of products offered by airlines, freeing them from the costs associated with GDS and facilitating exchanges between the various stakeholders through a common computer language, XML. Thanks to this new standard, airlines can also customise their offers directly with TMCs in order to improve the passenger experience.
For businesses, the benefits of NDC should enable:
- direct access to more travel options according to the passenger's preferences or loyalty programme information;
- dynamic pricing based on real-time data and demand-driven pricing;
- better information on price comparisons;
- a large variety of additional services, such as types of meals according to the passenger's dietary requirements, baggage handling, Wi-Fi reservation, lounges, and even seat allocation options.
In concrete terms, the technology used by the GDS today, which dates from the 1970s, is becoming obsolete and is preventing the airline sector from making progress with the distribution of its fares and new services. Among other things, the NDC standard will facilitate automation as well as the offer’s customisation at the very best price.
What are the current developments?
While some airlines, such as Air France, felt ready to market the NDC standard to its business customers, it had to postpone the GDS surcharge for 6 months due to high demand from TMC which believed that the standard was not quite ready and was difficult to understand. The greatest added value of the GDS was the fact that it was easy for travel agencies to compare the various offers available on the market. With the NDC standard, it is difficult for travel managers to see how they can effectively monitor costs without losing out in terms of productivity.
According to Greeley Koch, a professor at New York City University and a long-standing expert in international business mobility, "travel managers must evaluate their policies and technology now in order to prepare for potential disruptions. If they don't, they may find themselves with a more fragmented, less secure and, ultimately, less efficient programme."
Today, only 34 airlines are at level 3 or 4 of NDC certification. In comparison, more than 450 airlines are distributed via GDS.
Henri Hourcade, CEO of Air France, also explained in a recent interview that "the NDC standard has the advantage of providing distributors with everything that, up until now, was only available on an airline's websites." This standard ensures TMC completely transparent access to a full content offer without any complexity for the end user.
In the same vein, in a press release, Amadeus and Lufthansa recently announced their partnership to include the NDC standard in their service. This means that it will be possible to book NDC offers from Austrian Airlines, Brussels Airlines and Eurowings via Amadeus from the end of 2022. They will be available to travel agencies and businesses through the various interfaces offered by Amadeus, such as Amadeus Cytric Travel & Expense.
The press release adds that: "Beyond the NDC offerings, travel retailers will continue to have access to the Lufthansa Group's airline content through existing Edifact (GDS) technology."
After almost a decade, things still remain relatively unclear and it will take several more years for the introduction of NDC to be effective and reach a level of maturity and understanding among the business travel ecosystem. The future of this standard will depend mainly on how the sector's stakeholders will use it and apply it.
FCM has become the first global travel management company to obtain the International Air Transport Association's (IATA) Level 4 (highest level) NDC certification.
FCM est devenue la première compagnie mondiale de gestion de voyages à obtenir la certification NDC de niveau 4 (niveau le plus élevé) de l’Association internationale du transport aérien (IATA).