As we work with IATA to unveil plans for an NDC offer repository, let’s recap how we arrived where we are today. EDIFACT and ATPCO standards have served the airline industry well over the years – and still do. Offering online travel agencies (OTAs) centralized access to airline content, while giving travel sellers the ability to develop in-house solutions to target specific traveler needs. However, this architecture limits airlines’ ability to ma
As weunveil plans for an NDC Offer Repository , let’s recap how we arrived where we are today. EDIFACT and ATPCO standards have served the airline industry well over the years – and still do. Offering online travel agencies (OTAs) centralized access to airline content, while giving travel sellers the ability to develop in-house solutions to target specific traveler needs. However, this architecture limits airlines’ ability to manage how their content is sold by third-party digital retailers. The emergence of e-commerce has created further challenges to the older standards, which are less able to meet increasing demands for tailored airline offers. This led to the introduction of a New Distribution Capability (NDC).
Across its ten-year life span, NDC has grown into a recognized and accepted standard which has started to address many airline requirements for improved retailing. The new standard was introduced to boost airline distribution capabilities, giving carriers a way not only to control the offer but also to accelerate product innovation towards the end consumer across all channels. We are seeing adoption of these new capabilities pick up, as more airlines invest in NDC technology and work with their distribution partners to enable more channels.
However, there is still room for improvement in how the standard can deal with the requirements of digital travel players such as OTAs and metasearch engines (MSE). Digital retailers are fundamental to the commercial success and long-term sustainability of many airlines. They bring airline inventory in front of travelers the airline itself would struggle to access. Some digital retailers may also have strong budgets to spend on technology and marketing, offering airlines a channel that delivers incremental revenue.
Challenges we face today
One of the major reasons some airlines are reticent to commit fully to NDC is the volume of NDC shopping requests coming through from digital travel players. This generates significant direct and indirect costs which are often out of sync with how many of these requests end up as a booking. On the other hand, for digital travel players, several limitations need to be addressed, particularly at the inspiration stage, in order for NDC to be a viable channel.
As far as functional coverage is concerned, there is inconsistency in terms of the capability levels among airline providers. For example, some airlines have calendar search covering +/- 3 days, others have +/- 7 days. OTAs find it difficult in these instances to offer travelers an easy-to-compare display with offers from multiple carriers.
Fast response times are of paramount importance to OTAs – and the current “pull model” can lead to delays whilst the digital travel player waits for an answer from the slowest airline before being able to consolidate all content and present options to the traveler. If an airline IT system times out or lacks required features, OTAs may end up cutting off this source of content, denying the airline the chance of a booking, likely resulting in lost business.
Ensuring there are no search restrictions for OTAs will be pivotal to NDC adoption. As per current NDC standard, OTAs are required to explore a large domain of offers in response to different traveler search queries. For example, an open date and destination search (considering 100 destinations, 365 departure dates and two-to-three weeks of duration) will require the search player to send 255,500 AirShopping queries to each airline to fulfill the calendar matrix. Costs are incurred despite the low chance of conversion when the traveler is still in the inspiration phase.
The current pure pull model of NDC, which is working effectively for shopping, needs to evolve to cope with the inspiration stage. There needs to be a focus on delivering instant access to a large quantity of offers from many airlines in a fast and cost-effective manner.
Solutions for tomorrow
IATA has been on the case since 2019 and Amadeus has played a key role in many discussions and initiatives. Working together with the industry and participating in IATA think tanks, we have come up with what we believe is a workable solution – the “NDC Offer Repository”. A cloud-based solution that will allow digital travel retailers to access NDC airline inventory outside the airline’s core systems, in a standardized way, but with the airline still in control of what inventory is available and to whom.
Thiswhite paper introduces the theory and practice in detail. As an introduction, here are four benefits that digital travel retailers can expect:
- Bring back innovation: The new model goes beyond the functional limitations of individual airline APIs. Digital travel retailers can upgrade their existing workarounds, devised to address shortcomings with current NDC implementations, with a new fit-for-purpose standard that supports expansion of proven use cases. Traveler-centric options, such as calendar searches and dynamic packages, will improve the customer experience, speed up response times for customer queries.
- Convert more customers: Travel sellers will be able to leverage NDC-sourced content across all traffic acquisition channels without polling restrictions from airlines. They will be able to strategically align their marketing campaigns with airline inventory in a way which brings new customers to sign up to emails and engage on social media.
- Boost partnership with airlines: By helping them sell more NDC-sourced content, and to leverage existing NDC retailing capabilities at the right stage of the funnel, there is a chance to build deeper commercial and technical partnerships.
- Be future-proof: NDC Offer Repository provides airlines and digital travel retailers the basis to think long-term while also providing a standard which can adapt for the next wave of technologies, paradigms and market entrants - whatever they might be..
Beyond these benefits, we believe the NDC Offer Repository is a viable solution and will help airlines and digital travel players sell more seats to move travelers in a more cost-effective way. To find out more, download thewhite paper .
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