Fact Sheet: New Distribution Capability
The New Distribution Capability (NDC) is an IATA-led industry-supported initiative to develop an XML-based data transmission standard for communications between airlines and travel agents. The NDC standard is open to all IATA members, any third party, intermediary, IT provider or non-IATA member, to implement and use.
Approximately 60% of airline ticket sales by value are sold by travel agents (including travel management companies and online travel agencies (OTAs)). The pre-Internet messaging standard (EDIFACT) used to deliver airline fare and schedule data to these partners cannot easily accommodate the way in which many airlines want to market and sell their products today. XML makes it easier, faster and cheaper to provide the customer more information about fare alternatives, ancillary services, on board amenities, and graphics such as pictures or seat maps.
Global Distribution Systems (GDS) companies are working towards making it possible for airlines to better merchandize their products via travel agents. But each is working on its own proprietary solution—at its own pace and with its own priorities.
A common, open XML-based standard will enable travel agents and consumers easy and transparent access to the same products, services and product information that they currently are only able to access on airline websites.
IATA has created a video that envisions what the air travel shopping experience could be like in an NDC-enabled environment.
- Increased transparency of what they are buying regardless of where they do their travel shopping
- Greater access to airlines’ product and services when using a travel agent
- Ability to compare airline offerings across many dimensions – not just price
- Recognition by airlines and personalized products offers
- Capability to sell all products through all channels
- Leverage the investments made for their direct channel and develop retail capabilities for all channels
- Greater ability to recognize and reward customers, provide personalized offers
- Broader access to airline products with a one stop access to ancillaries and other airline services
- Better service for clients by comparing complex product offers
- More productivity when dealing with complex offers
- Significant reduction in ADMs
Aggregators (including global distribution systems)
- Improved capability for displaying wider range of products and services
- Stimulate innovation and offer more choice to consumers, open new business opportunities
Resolution 787, the foundation Resolution supporting a New Distribution Capability (NDC) was formally approved by the IATA Passenger Services Conference (PSC) in October, 2012. In March 2013, IATA filed an application for approval of Resolution 787 to the United States Department of Transportation (DOT). Under the “Provisions for Conduct of IATA Traffic Conferences”, IATA is required to file any and all resolutions and agreements coming out of its various conferences with DOT.
In June 2013, at the 69th Annual General Meeting (AGM) in Cape Town, South Africa, IATA members reaffirmed their support for NDC initiative via an AGM Resolution that was approved unanimously.
- The AGM Resolution affirmed that NDC will support current shopping methods, including the ability for consumers to compare base fares and to do so without identifying themselves (“anonymous shopping”).
- The AGM Resolution also noted that consumers will be protected by data privacy protection laws and regulations regardless of how and where they choose to purchase air travel.
- Additionally, members confirmed that airlines and other industry players will be free to decide whether or not to adopt NDC to support some or all of their distribution needs, and that IATA would continue to support the existing legacy standard while demand for it exists.
In September 2013, another important technical milestone was achieved. The business requirement document for NDC Shopping and the associated XML schemas were presented to a technical industry group for review. This is another step towards defining and deploying an industry standard for enhanced airline distribution.
In parallel to the NDC business requirement and schema activities, a number of industry pilots are in the works that will aim at validating the requirements and the schema and ultimately fine-tuning the NDC model.
The pilot program was launched in February 2013 and currently has 5 pilots in the deployment phase and 6 pilots in the pipeline to be launched between now and the end of 2013.
It is expected that this phase will last through 2014. In 2015 the initiative should move into a deployment phase, in which a number of airlines will have adopted the initial version of NDC.
A global roll-out is expected to begin in 2016.
Updated: November 2013