Post-COVID, airlines are restarting investment in IATA’s New Distribution Channel (NDC), and a new NDC schema, or standard, is enabling fuller exploitation of NDC’s smart-selling capabilities.
But to reap full NDC benefits, carriers must partner with and carefully manage their relationships with sellers, according to Maria Gray, senior product manager for NDC at Datalex.
“NDC is more than an API [application programming interface],” Gray stresses. “It’s a partnership.”
Datalex provides software that helps airlines merchandise through both NDC and other channels.
NDC’s core is XML-based data transmission that lets airlines know indirect customers as well as they know direct website visitors. The ultimate aim is to enable airlines to manager their indirect sales channels as profitably as they manage direct website sales, including dynamically tailoring prices and offers to each interested customer. This would maximize revenue while avoiding GDS distribution costs.
For that, collaboration is crucial. Airlines have massive data about their customers. But “agents know their local customers better,” Gray observes. The closer the two work together, the more flexibility is available to each to engage in smarter selling.
Gray notes that NDC is headed away from choosing among many but finite booking classes, toward an infinite number of prices delivered in real time and guided by artificial intelligence.
Datalex chief revenue officer Bryan Porter stresses NDC’s ability to tailor offers by market segment or individual, bundle or disaggregate auxiliaries, and let agents compare different offers. NDC also can let airlines make the same offer across all channels or customize offers by channel or point of sale.
And now is a particularly good time to begin NDC implementation. IATA’s latest messaging schema, 21.3, allows airlines, whether or not they have used NDC in the past under earlier schemas, to “jump straight forward into full offer and order management,” Gray said. “Airlines coming on now can leapfrog other early adopters.”
Porter cautions that NDC is more than an IT implementation. It is a digital transformation that touches multiple parts of the airline and thus needs CEO-level commitment. Airline sales units must be transformed, and new selling channels must be steadily brought onboard. These sellers can ultimately include online and other leisure travel agencies, metasearch engines, content aggregators, GDSs acting as aggregators and travel management companies. GDSs, once reluctant to work with NDC, are now “keen to participate,” Gray said.
After onboarding, Gray added, carriers must appoint individuals to own and manage each new selling channel relationship.
Datalex is now working with travel agents and carriers such as easyJet, Virgin Australia and LATAM to deploy or trial NDC capabilities, including full shop, order and payment, quick testing of new auxiliaries and optimizing prices for each customer.
One NDC challenge has been high look-to-book ratios and thus a high volume of queries hitting airline systems. Porter says this challenge is now being mastered as Datalex uses airline passenger service systems web services, not EDIFACT, and its own shopping and pricing engine to handle high volumes economically.
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