Understanding the New Distribution Capability (NDC)
Airlines and agencies are focused on the New Distribution Capability (NDC) retailing and distribution capabilities to support the transformation of the travel industry into intelligent retailers. The technology is here. Now what?
What is New Distribution Capability (NDC)?
IATA defines NDC (New Distribution Capability) as the enablement of the travel industry to transform the way air products are retailed to corporations, leisure, and business travelers, by addressing the industry’s current distribution limitations: product differentiation and time-to-market, access to full and rich air content and finally, transparent shopping experience.
NDC is poised to have far-reaching effects in the travel industry, but with all the preparation that is happening, the key statistic of the IATA Leaderboard is an indicator of the timing of these effects.
By 2020, 20 percent of the leaderboard airlines’ third-party volume is forecast to be sold through their NDC API. That means 80 percent of those airlines’ third-party sales volume will still go through traditional technology.
Does that mean NDC isn’t as critical as we thought?
NDC is poised to have far-reaching effects that will impact the travel industry for the better. But it does make the reality and importance of the hybrid world of multi-source content more significant.
While NDC content promises greater personalization, it will require aggregation and normalization to bring it together and make it available to multiple point-of-sale interfaces.
While a handful of airlines are leading the charge by being NDC-ready today, even they must prepare a dual-content strategy for the foreseeable future.
In a hybrid landscape where airline content flows through the GDS via multiple sources, seamless content aggregation and integrated workflows for agencies and corporations are critical.
NDC content must function inside the support capabilities that exist in the agency environment that drive commercial and operational performance.
What does this mean?
This means complexity. But with this complexity comes opportunity. Airlines will have more compelling offerings for travelers and new ways to merchandise those offerings. They will also have new bundled and unbundled offers for travel agents to distribute.
This increased technical complexity is a definite challenge for the industry. The good news? Complexity is nothing new to Sabre. As we like to say, “We eat complexity for breakfast.”
Adoption and Scalability of NDC
Collaboration across the travel value chain is helping align and enable the industry, leading to greater adoption and scalability of the NDC standard. At Sabre, our progress is gaining momentum as we tackle this complexity by working with our Beyond NDC program partners. Through this collaborative approach, key questions emerge such as:
- “What is the new, differentiated content my travelers will benefit from as a result of NDC?”
- “Is the infrastructure prepared for this?”
- “Can companies afford the cost to change these systems to create consistent experiences?”
We are working together to address these concerns as we’ll look at four steps to get started on your NDC journey as we approach the new year 2020.
You can also read our previous article here.
About Sabre Corporation
Sabre Corporation is the leading technology provider to the global travel industry. Sabre’s software, data, mobile and distribution solutions are used by hundreds of airlines and thousands of hotel properties to manage critical operations, including passenger and guest reservations, revenue management, flight, network, and crew management. Sabre also operates a leading global travel marketplace, which processes more than US$120 billion of global travel spend annually by connecting travel buyers and suppliers. Headquartered in Southlake, Texas, USA, Sabre serves customers in more than 160 countries around the world.