With NDC connections on the rise, the travel industry can get a lot more creative in the digital retail space.
Over the last year and a half, COVID-19 might have dominated the news cycle, but that hasn’t slowed our progress on NDC. In recent months we’ve signed NDC agreements with Air France-KLM, American Airlines, Singapore Airlines, and the International Airlines Group (IAG). We are also looking to collaborate with Qatar Airways. With this accelerated pace, 2021 is very much becoming the year ofNDC at scale . At Amadeus our goal is to make NDC-sourced content available to all our travel sellers around the world over the course of this year.
When I shared one of our latest announcements, I saw an interesting question pop up on LinkedIn: “Why all the fanfare with NDC? We already have EDIFACT, why go through the trouble of setting up something new?”
It’s a valid question, and it deserves an answer. Why is NDC a big deal, and why should we all want it to become the new industry standard?
To understand this, first we have to take a quick detour down memory lane. This story starts with the creation of EDIFACT, what it was built to achieve, and how much the travel space has changed in that time.
EDIFACT - A child of the 80s
The 1980s brought us big hair, video games, Madonna and EDIFACT – Electronic Data Interchange For Administration, Commerce and Transport.
EDIFACTwas created to manage business to business communications in the travel industry. Madonna sounds more exciting, but when EDIFACT was created, it was a big deal – and to be honest, still is. At the time, networks were private, they were very expensive, and bandwidth was limited. As a result, the syntax invented in the 1980s was designed to keep messages as small as possible. That’s how we ended up with many tiny EDIFACT verbs, that split up the sale process into many small steps: first, travel agents had to look at published fares to estimate which airlines may have a good price. Then they could request availability for the outbound journey of a chosen airline. Then they needed to look at the "Reservation Booking Designator" of each possible flight to see if a cheap fare was actually available. Then they could book. And then they would need to repeat the process over again for the inbound flight, ultimately issuing a ticket. It was tedious, but compact, and that was by design. Back in the 80s, this was the perfect way for airlines, airports and travel agents to connect, and it helped the world enter in a new global age.
Then in the 90s “shopping” was invented, representing a major step forwards, but this still relied on all the existing tiny EDIFACT verbs, that needed to be used in the correct sequence.
The thing is, we don’t live in the 80s and 90s anymore. I hear leather jackets and big sneakers are back in, but the rest of the world has changed. Most significantly, we don’t shop like we used to. Travelers, like all consumers, are now used to having personalized shopping carts a click away on Amazon, custom-tailored playlists on Spotify, and the perfect queue of films and TV series ready on Netflix.
Travel sellers today need a messaging protocol that’s fast, flexible, and easy to adapt for different customer segments. In addition, the travel industry is much bigger and more complex than it was in the 80s and 90s. Our messaging protocols need to connect much more players than they used to, and many new players aren’t going to learn EDIFACT if they can use XML. If we don’t adapt now, the innovators of tomorrow are just going to choose someone else, and the travel industry will be left behind.
And that’s why NDC came to be.
NDC – Digital retailing for the 21st century
The New Distribution Capability (NDC) was born out of the need for the travel industry to catch up with other digital retailers. Travelers don’t care what technology the industry uses; they just want the process of searching and booking to be as easy as buying anything else. That’s why one of the key selling points of NDC is its streamlined retailing flow of just Shop/Order/Pay.
This retailing approach has many advantages compared to EDIFACT. For example, NDC allows travel sellers to use a global action such as “OfferPrice”, to get the total price for all components of the journey in just one step. Sounds simple and important right? With EDIFACT, it cannot be done as quickly With its streamlined language, NDC will also open the door for simplified internal processes, such asONE Order ..
The NDC retailing flow opens many more doors, facilitating opportunities like dynamic packaging and upsell proposals. At a time when customer care is critical to an airline and travel seller, NDC gives travelers the same e-commerce experience they are used to in other parts of their lives and have come to expect.
For example, Singapore Airlines is doing interesting things with promo codes, to give users additional choices, such as a bundled offering. Meanwhile agencies piloting the Air France-KLM NDC connection, are testing corporate bundles and "continuous pricing" beyond the traditional limited fare buckets.
Better content and better service
Another key difference between EDIFACT and NDC is that Offers and Orders are created by the airline in one shot. In practice this means aggregators are providing airlines with some search context—such as the chosen itinerary, passenger information and preferences—and airlines then return offers with relevant information in real time.
Having offers and orders crafted by airlines enables them to create their own private algorithms to innovate. This will allow them to match supply with demand and give them more agility to experiment and A/B test with new offers, across all of their sales channels. It also means airlines and travel sellers can personalize their offer at each stage of the shopping experience for different types of travelers. They can develop special offers for specific corporations for example, and different ones for travelers with frequent traveler points or promotion codes.
For example in February,American Airlines announcednew NDC bundlesfor NDC capable travel agents, including a "Corporate Experience" offer that includes perks such as complimentary access to preferred seats and priority privileges for Business Extra travelers.
NDC also gives airlines new opportunities to include non-air services in their offers more easily, such as destination services, airport transfers, or car rentals. Aditionally, NDC allows creative payment solutions beyond cash and credit cards – such as crypto currencies, subscription models, or direct settlements. However they pay, travelers can rest assured that their order is guaranteed, because it came directly from the airline. Finally, with Amadeus, NDC allows travel sellers to manage servicing in case of disruption – a detail that became even more important since COVID-19.
Facilitating collaboration and innovation
Until relatively recently, EDIFACT was the standard for communication with all industry partners.So only partners equipped with the proper technology were able to collaborate with an “EDIFACT airline”.
As a result, EDIFACT has stood in the way of many industry partnerships. For example, until recently, Vueling couldn’t rebook its passengers on a British Airways flights even though both carriers belong to the same airline group, because Vueling didn’t use EDIFACT. In November, the Amadeus Altéa and Navitaire teams worked together to create a newNDC-based client app for Vueling agents to quickly and easily rebook Vueling onto a British Airways flight in case of a disruption.
It is clear EDIFACT has not been able to keep up with the times to be able to deliver the flexible and standardized shopping experience that travelers have come to expect across digital channels. In reality, its data modelling was created with purely airlines’ needs in mind, without accounting for the needs of other travel players, such as destination service companies or airport retailers. It was great when all that travelers wanted was to buy just the flight, but today they want more flexibility and choices - a hotel booking, a car reservation, a ticket to Disney Land and an airport lounge.
Both NDC and ONE Order are based on XML, which is broadly used and understood across the global IT industry, resulting in more collaboration opportunities and open innovation that are key to handling current and future industry challenges. This new “retailing language” is facilitating agile development with start ups and companies from other industries, which could contribute to faster innovation in the travel sector.
For Amadeus, the shift from using EDIFACT towards NDC XML - and the doors it has opened in the realm of Cloud technology, AI and Digital ID technology - has shaped our identity as an innovator and travel industry pioneer. This in turn has had a positive impact on recruiting new engineers and developers. With NDC, some of the brightest young minds are keen to join us in building the future of travel and travel retailing.
I know that we’ve been talking about NDC for years now, and until recently, it wasn’t tangible for most as we were always talking about future possibilities. Well, I’m here to tell you that NDC is here, it’s in the present, and it’s not going away anytime soon.
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