New Distribution Capability (NDC) adoption is transforming the travel ecosystem by giving airlines more control over their product, finances, and data, and evolving the way airlines do business with travel sellers.
Fast-tracked in part by the global pandemic, the airline industry as a whole has strengthened its digital technology capability. The wave of digital transformation across all industries has raised consumers’ expectations – if you cannot deliver a fast, seamless online experience, you could quickly lose customers to your competitors.
The low-cost carrier (LCC) industry was founded on the principles of employing the most cost-efficient operational and distribution methods, enabling them to keep prices low for a clear competitive advantage. Marketing and selling directly to travelers – wherever they may be searching for flights and fares – is a key part of their business model.
LCCs leverage open APIs to partner with travel sellers and keep costs low. With direct connections, LCCs can market their fares and flights on their own terms, strategically selecting the products and price points available in specific channels, resulting in a greater reach.
Those are the same principles underpinning the industry’s transformation to NDC - giving airlines unprecedented control over their offers and orders in third-party distribution channels. With its standardized API messages and the opportunity to introduce rich content in indirect channels, NDC enables airlines to take control of how third parties sell their products and services. It goes beyond the specifics of standardization and technology schemas.
NDC is all about adding capabilities. It is the enabler that the industry leverages to evolve airline reservation systems from aging and limiting legacy processing systems to flexible digital retailing platforms. Airlines, including full-service carriers, hybrids and LCCs, want to meet travelers in whatever channel they choose to shop. It is therefore imperative to give travel agencies and corporate customers the same merchandising capabilities that airlines have on their own websites and mobile apps. Airlines that are slow to update their strategy may miss out on the benefits NDC can deliver.
Today, online travel agencies see the trajectory and are eager for NDC content. They recognize that airlines of every business model – not just LCCs - are shifting much of their best content from traditional sales channels, or only adding new offers to NDC-enabled channels. Some airlines are offering exclusive fares and promotions to get travel sellers to move to NDC, and major travel agencies and aggregators, such as Expedia, Booking.com, CWT, Kayak and more, have embraced the change.
The adoption of NDC is transforming the travel ecosystem in profound ways. It is giving airlines more control over their distribution strategies and helping them differentiate themselves to attract travelers. It is also reshaping traditional business models and changing the way airlines do business with travel sellers. Airlines and travel sellers need to work together to unlock the opportunities that NDC enables.
Navitaire’s open architecture has empowered airlines to connect directly with business partners for over three decades. Our deep experience in using XML-based direct API connections helps our customers connect to NDC-enabled sellers across the globe. Learn more about how Navitaire is supporting NDC initiatives in our white paper.
Susan R. Adelman
Global Marketing Director
