In 2014, air travellers shelled out about $28.5 billion on onboard food and beverages, checked baggage, premium seat assignments, early boarding and similar options.

That said, while around 60 per cent of airline tickets are sold via brick-and-mortar travel agencies and travel portals, only a small share of ancillary goods and services are sold through agents or travel portals. A major chunk of these products and services are sold by airlines on their own portals.

Why does this happen? When travellers visit airline portals, they often can view detailed information about products, choose options they like such as a seat with more leg space, or access to an airport lounge, or expedited boarding.

These options, however, may not always be easily accessible on the systems that agents use. Also, because of this situation, customers find it difficult to compare airline offerings, beyond the base schedule and fare, in the travel agent channel.

New distribution

The International Air Transport Association’s (IATA) new distribution capability (NDC) aims to address such issues by helping travel agents to sell these products and services as well.

This will help agents to have more tools to better serve customers and, as a result, travellers will have access to full and rich content and a transparent experience when they buy tickets from a travel agent or a travel portal.

That also means, in an NDC environment, travellers can shop and compare the full value of an airline’s offerings when they use a travel portal or an agency.

To the uninitiated, NDC is not a system. It is an industry-led initiative that targets the development and voluntary market adoption of a new, XML-based data transmission standard for communications between airlines and travel agents. It replaces the pre-internet standard in use currently. Moreover, it will be an open standard, available for all to use.

While some global distribution systems have already begun to use certain communication protocols running on XML, they have each developed these using proprietary standards.

Bumpy start

In fact, NDC didn’t enjoy much industry acceptance at the start. But as the benefits of voluntarily adopting a single data transmission standard have become clearer, major players have come on board.

At the World Passenger Symposium in October 2014, the three major GDS companies — Amadeus, Travelport and Sabre — endorsed NDC and stated that they would use the standard if their airline partners asked them to.

In China, both Hainan and Shandong airlines, in tie up with TravelSky, the China-based GDS, also endorsed NDC.

And in December, IATA entered an agreement with a coalition of national travel agent associations to look at options that could benefit travel agents as the industry moves to NDC.

Of course, airlines and agents will need tools and applications to manage the rich content the NDC standard will enable.

So, IATA has also partnered with Travel Capitalist Ventures, a leading travel-focused investment firm, to create the NDC Innovation Fund to support innovation in airline distribution by investing in small- and medium-sized firms seeking to develop solutions which support airlines and agents as they leverage the enhanced distribution capabilities enabled by the NDC standard.

Indeed, NDC has the potential to bring in a new era of airline retailing.

The writer is Director of the NDC programme, International Air Transport Association

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