Travel Analytics Blog
NDC – The New Standard Behind Air Travel Distribution
Posted by Sonja Woodman on Tuesday, March 25, 2014
IATA’s New Distribution Capability (NDC) provides long-awaited standardization for airline dynamic shopping, retail & ancillary revenue generation. It represents a unique opportunity to modernise how air travel is sold, opening up the opportunities for airlines to become more profitable by selling not just seats, but unbundled options such as wifi, lounge access, seat and menu choices, baggage options, etc.
Currently, airlines use internet programming language (XML) on their websites and are able to offer travel consumers an online shopping experience similar to what they can find on retail websites such as Amazon.com and we all know how customer focused Amazon is.
NDC is the IATA initiative to make it happen for the 60% tickets sales that still take place through Global Distribution Systems (GDS). The adoption of NDC will make it easier for airlines to offer the same array of option through third party providers as through their own channels, thus transforming the air travel landscape and giving customers greater choice.
To kick-start the task of adopting the NDC, IATA has brought together key airline industry stakeholders into pilot schemes to adopt XML (eXtensible Markup Language) standards in order to overcome the constraints of the GDS based on pre-Internet EDIFACT. This technical legacy is regarded as a limiting factor in airlines access to the growing online travel market served by third party distributors and the ability to offer more customised products. A group of airlines, travel distribution channels and technology companies are currently piloting the new capability for distributing airline travel products through third party channels based on XML. The use of this established international data-exchange is already well practiced by the online hotel industry (including aggregators and wholesalers) to enrich the scope for personalisation and customisation in their touch points with their customers.
By using XML, companies can exchange information including data and content in a variety of ways. By structuring, XML makes files very easy to understand, move, and translate into other environments. This flexibility makes XML the perfect ‘next generation’ choice for the growing online travel business in general and the airline industry in particular at this crossroads.
Unlocking the Intelligence of XML
Having considered the case for the adoption of IATA’s NDC, it is also only reasonable to point out that as with any new technology investment two mantras ring true – you can’t measure what you don’t manage and the devil is in the detail. Essentially, if airlines want to derive the most value from their XML-based implementations in accordance with NDC, they should also apply reporting techniques and analytics to their XML web services and operations to get the maximum insight into their actual business performance. For example XML intelligence can help them:
Enhance operational efficiencies where possible and
Identify opportunities that can give value to services or deliver financial RoI.
The ability to derive actionable information from web services is key to dealing with competition and growth. Knowing for example how to improve yields and revenue, being able to identify inventory gaps and tracking trends is all part of the rich tapestry of buying behaviours that XML analytics can identify.
The airline industry is currently at a crossroads. One road is a set of standards that promote interoperability across the entire travel industry and the other is a discordant set of unrelated, imprecise, non-extensible, supplier-centric formats.