Last Updated: 06 Oct, 2020

New Distribution Capability (NDC) in Air Travel: Airlines, GDSs, and the Impact on the Industry

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New Distribution Capability (NDC) is an advanced technology created by IATA to streamline the airline distribution process. It's an XML-based communication standard basically developed in 2010 to create direct connections between airlines and third party distributors.

What Is NDC?

 

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New Distribution Capability will enables the travel industry to transform how air products are distribute to corporations, leisure and business travelers, by addressing the industry’s current distribution limitations: product differentiation and time-to-market, access to entire and rich air content and finally, transparent shopping experience. 

This was regulated in 2012 by IATA to replace the old EDIFACT messaging standard, which global distribution systems (GDSs) rely on. EDIFACT can only display information such as fares and schedules and has not kept pace with technology or the products offered by airlines.
 

What Are The Benefits Does NDC Provide?

 

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1) Personalized Access To Customer Information

Many airlines are piloting these simple types of connections through NDC (instead of developing their own direct connection) as it will be easier to increase the scope with other distribution providers. This implies airlines get simply important data about their customers, which doesn’t take into consideration customizing the shopping experience, what has gotten a standard in present day travel ecommerce. The NDC’s standard will possibly give airlines direct data about their clients.

2) Content and Pricing

The new XML standard permits airlines to manufacture their own APIs and change costs autonomously, enhancing their offers and altering costs independently to every client. NDC connections for offer and order management, providing ability to purchase seats, bags, upgrades, meals, car rentals, and travel insurance, as well as ability to bundle the products. Hosting a third get-together as a middle person between income the board and circulation channels implies that airlines pass up on the chance of dynamic valuing.  

3) Content Offers, Ancillaries, And Discounts

This outcomes in financial losses for service suppliers as ancillaries are the main source of profits for carriers.
Distributing the flight data over GDS’s (Electronic Data Interchange for Administration, Commerce, and Transport), airlines is not able to include ancillaries in their offers. 

4) Product Separation

EDIFACT can only display information such as fares and schedules and has not kept pace with technology or the products offered by airlines. While tariff metasearch engines and OTAs make it easy for travelers to think about estimating price, airlines can’t showcase their additional value services and fully compete. Rich content, that contains all service details, solves this problem.

5) Legacy Systems

A passenger service system (PSS) is at the core of an airline’s IT infrastructure. This is the system responsible for handle customer interactions with airlines, from booking a ticket to boarding the flight. NDC will perform as a separate engine outside of legacy systems that allow for presenting data stored in PSS databases using airlines’ private interfaces. It was originally designed to be used by airlines but was later extended to be used by travel agencies and Global Distribution Systems (GDS) to book and sell tickets for multiple airlines.
 

New Distribution Capability (NDC) In Air Travel

 

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Airlines, travel management companies, online travel agencies, global distribution systems, corporate buyers and other technology players execute to the NDC Standard. Over a collaborative contact, participants ensure that the supporting Structured around seven distribution-related functions, the NDC Standard provides the opportunity to address the end-to-end airline distribution process, e.g. shopping, booking etc., and to deliver increase customer experiences.

An industry standard will promote a more efficient airline distribution system, thereby benefiting airlines, agents, GDSs, IT providers and travel start-ups.
 

Airlines, GDSs, And Impact On The Industry

 

The distribution system in the air travel industry consists of many players in the field. To connect end customers with the actual airline, there are a number of intermediaries, represented by travel agencies, tariff publishers, GDSs, and so on. Highest of the major players appeared decades ago or morphed from the older formations and continue to exist.

The Global Distribution System (GDS) is one of the most important tools for the travel industry. It is an online system or network that functions across the globe and associates the travel service providers or vendors to the travel agencies in real time, by providing a centralized service that covers the bookings of airlines tickets, car rental, hotel rooms and more.
The global distribution system that you choose to invest in should be capable enough to let you customize the services that you plan on offering to your respective clients. This is extremely important because every client is different and the needs and requirements of every other are also different. You can’t offer the same service with the same features to all of your clients. That is why is it extremely important that you invest in such a global distribution system that helps you to customize the services for each customer. 

This will also help you, as a travel agent, to save a lot of time as all of the information will be provided on a single platform and you would no need to go back and forth to gather all the information to design a suitable package for your client.

There are some very basic features that every business needs to have to be successful, generate more revenues and every earns higher levels of profits. When it comes to travel businesses, one of these main features includes high levels of efficiency and value maximization. To increase the levels of your travel business, it is important to make sure that the global distribution system that you are planning on investing in is up to date with all the technological advancements going on around us. 

The Global Distribution System helps any travel agency or any travel agents to initiate transactions between different service providers and agents. Generally, the Global Distribution System is called GDS in general terms. It basically uses the real-time inventory to the service providers. GDS associate the gap between the travel & trip reservation portals as well as allows hassle-free travelling experience. 
 

How To Choose The Best GDS Providing Travel Technology Company?

 

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One of the most important features that you should look for before deciding to invest in a global distribution system should be its ability to update without disrupting your workflow or slowing down the pace at which all the work is being done at your organization. This is extremely important because in case your selected software needs The Use of Global distribution system shows a rise across corporate and leisure travelers

If you wish to be the best in the business, and wish to stay ahead of competition, it is necessary that to choose the best Travel Technology Company.

The Travel Technology Software Development Companies cooperative you in development of software, website, app or you can also purchase the software developed by travel technology companies.

Travelopro is the Best Travel Technology Company, offering software development services, website design and development and mobile applications for Travel Agents, Tour Operators, Travel Businesses, GDS software, travel GDS and GDS API integration and Travel Companies worldwide.
 

How Travelopro GDS Helps To Travel Agents

 

Travelopro offers GDS system, GDS software, travel GDS and GDS API integration for the hotelier, tour operators, and travel companies worldwide.

Travelopro is integrated with GDS System enabling travel agents and travel portal websites to develop their travel business. Online agents and travel agencies now operate increasingly more sophisticated GDS systems to search for the best available travel and accommodations and rates for their clients. Agents will arrange airline and hotel reservations (in real time) for clients, and they will complete their research and bookings within minutes.

Travelopro also develops airline reservation system, working with global airlines, GDS systems, and flight consolidators. The hotel reservation system, sightseeing, transfers, and basic packaging modules. We integrate various GDS, hotel, car, and cruise consolidators for travel clients.

Travelopro sets up GDS software for IATA approved travel agencies so that they can sell the tickets directly online through their B2C, B2B, B2B2C and B2B2B portal interface. 

Promotional messaging to agents through GDS cores like the highly prominent airline national distribution systems (Amadeus, SABRE, Galileo, and Worldspan) alert agents to special rates, fares, and travel packages – an useful marketing tool for passing savings on to agents, and from agents to their customers.  Not only is messaging over GDSs effective in promoting travel savings to clients, GDS providers are becoming “fundamental to the supply of travel products to retailers in the online channel.

Travelopro can design and develop extremely fast and powerful travel software for travel startups and travel business idea. Our software will automate the entire system of every travel agents related to bookings, managing the operations, sub-agents, partners, suppliers, vendors, online and offline customers, customer experience, social media and many more.  
 

GDS Benefits

 

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  • The GDSs allows the travel agents to make their travel services available to consumers globally where they might not otherwise be able to achieve efficient worldwide market penetration through direct marketing efforts.
  • GDS is greatly effective in alluring the international travelers. This is the reason why using of GDS among the travel agents is growing exponentially every year.
  • OTAs have extremely improved the travel shopping experience and convenience for consumers and have increased pricing transparency.
  • GDSs facilitate the retail travel agency and OTA business models.
  • Booking through Global distribution system is most superior for corporate travel agents as a suitable reservation process for holidays, air, hotel and rental cars.
  • Travel agents can get global platform for their business with secure market penetration.
  • Global distribution system is the stand to enter into corporate clients across the world.

GDS is able to update the status of inventory in real time.  Due to its real-time status update capability managers can see rates change and can easily alter price points or make special offers. Agents can see all the changes instantly and will be able to suggest the new updates and offers to clients without any interruption to make the deal.
 

Conclusion

 

NDC solutions will allow airlines to accomplish their primary goal of selling their ancillary services. However, whether or not they'll have direct access to their customers' data to provide dynamic pricing is another emerging issue to keep your eye on in the coming years. Part of the challenge is getting airlines, travel agencies and GDSs to spend money on the infrastructure needed to implement NDC.

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