NDC: The Future?
Travel has changed a lot since the 1960s. Flights are safer, quicker, and more accessible than ever. However, even though the entire industry has evolved and progressed, the method of booking a trip has not.
Read on to find out about the new technology disrupting the industry, and how companies are rising to meet the challenge
Sixty Years of Bookings
For the past sixty years, the vast majority of all airline tickets have been booked through the Global Distribution Systems (GDSs). Sure, technology such as computers, the internet, and data automation have helped make the process quicker and in some cases easier, but the general structure of the GDSs have not changed in all of these decades.
The GDSs aggregate and compile available airline offerings, then make that available to travel agents and online booking tools (such as Travelocity) as packaged itineraries.
This means that if you search for a flight from New York to London, you are going to get a long list of available trips and fares, all packaged together in a list based on price or schedule. But what if you wanted to pay attention to other points? Even if you filtered your search results by other data, you would still end up primarily with a list of itineraries shown by either price or by schedule.
- What class is the trip in?
- How much do meals cost?
- How many bags can be brought along with you?
- How many stops are there?
Let’s say you wanted to book a flight from New York to London in economy class, wanted to check two bags, board the flight in the first group, and be served a specific kind of meal. It would take forever to filter through your booking method of choice to find exactly the offered itinerary that provided all of these details as you wanted them.
Does that sound frustrating? It is to the airlines as well.
The New Distribution Capability
NDCs are the proposed answer to the above conundrum. An NDC system would be a compendium of airline offerings that are not packaged like they are in the GDSs. An airline would be able to tell an NDC that:
- They have 500 seats available on x date from New York to London departing at 8:40am (across multiple flights).
- Which meals would be available.
- What kind of baggage allowances there are.
- How many seats are in which class.
- How many layovers there will be.
What follows for the person booking the flight is an ala cart experience in which you could book exactly the details that you wanted without having to browse through dozens or hundreds of prepackaged itineraries.
Granted, this same information could still be provided to the GDSs via an NDC, but it would be in a format that others could break apart and offer ala cart as described above.
Not to mention, airlines are finding this alternate third party option far cheaper on their own pocketbooks. According to American Airline’s VP of sales, Cory Garner, NDCs are “up to 90 percent less expensive for American to book and that having an alternative to GDS distribution gives it leverage with GDSs.” (The Beat Travel).
Additionally – and perhaps most importantly to business travel – NDC has allowed the airlines to structure corporate deals differently. For example, they could easily bundle in certain ancillary features in a corporate agreement like when a traveler for that corporation boards, if that corporation’s travelers get blanket access to the airline’s lounge, or if all travelers from that corporation automatically get free wireless. If baggage is important to a company because they have a lot of equipment, a baggage waiver could easily be administered thus meeting the needs of that corporation far more directly and efficiently than before.
So not only does this new booking method allow for more customization on the part of the traveler and corporation, but it saves the airline money. Which of course means that the airlines will be very interested in adopting it more and more as the technology gets even better. Many consider this a win/win.
What’s Next with NDC?
In Cornerstone’s latest episode of “Time with Tom”, Sr Advisor on Product Management and Marketing Tom Ruesink sat down with Travel Technology Consulting’s Norm Rose to discuss the current state of NDC and where we can expect it to go from here. Check out the video here.
In the clip, Norm Rose expounds on the importance of NDC and how much it is going to grow. “We’re actually in an environment where this is happening as we speak… we’ve been moving toward NDC for many years.” He goes on to explain that “the airlines don’t want to be constrained…. They want to sell every seat in a unique way.” NDC allows the airlines to do this working directly with the TMCs.
“It’s really trying to take product and match it better with what demand and buyers want. From that perspective, it should be a very positive for the TMC community.” – Norm Rose
Interested in Learning More?
Cornerstone’s experts are excited at the new solution opportunities that NDC are opening up, and if you are interested in discussing how to implement NDC data solutions for your own company, please reach out to us here.
We look forward to seeing how we can make NDC work for you.