Today, travelers are glued to comprehensive booking platforms like OTAs and price aggregators. As a result, airlines are stuck on third parties for flight distribution. Though some players strive to inspire customer loyalty by encouraging direct purchases from their sites, it can hardly be considered a working scheme for every airline.
Until the 2000s, airlines managed to maintain direct relations with travel agencies via Computer Reservation Systems (CRSs). At that time, the US Department of Transportation obliged airlines to share the same inventory content across all CRSs equally. Eventually, some CRSs have ballooned into behemoths by forming powerful travel data consolidators — global distribution systems (GDSs).
Since that time, GDSs have become the core middlemen on the flight distribution market. And given that there are only three major players, they’ve formed an oligopoly. The lack of competition has slowed innovation on the GDS side and prevented airlines from using digital tech to the full extent.
(By the way, if you’re interested in background, check our info-packed, historical overview of flight bookings: Your time travel will start in the 1950s and deposit you in current booking realities, as you explore all prominent events along the way.)
One of the issues with GDSs is that personal customer data is only captured by the middlemen, online travel agencies and GDSs. This prevents airlines from tracking their customers and adapting to their preferences. On top of that, GDSs’ EDIFACT data exchange protocol that’s been around since the 80s, fails to support airlines’ additional services and share them across OTAs. Without full control over their own inventory, airlines are losing money, especially considering that ancillaries are becoming increasingly important sources of profits for many carriers.
NDC is a new technology standard aimed at putting an end to these and many other constraints. In this article, we’ll discuss the key benefits and specifics of NDC adoption within the established airline distribution pipeline, also describing a number of scenarios of such transition with important NDC providers.
What NDC is and how airlines can benefit from adopting it
New Distribution Capability (NDC) is the latest standard for airline distribution suggested in 2015 by the International Air Transportation Association (IATA). In tech terms, it’s an XML-based data transmission that allows airlines to supply rich content, ancillaries, and generally take more control over their distribution. And that’s the key difference from EDIFACT functionality.
If you’d like to dive deeper into the NDC basics, have a look at our article to learn more about NDC’s impact on the airline industry. But the main thing to know is that regardless of the claims about “the NDC standard”, there are many ways you can use it and even more ways of implementing it.
First, let’s look at what NDC offers compared to the old EDIFACT-based data exchange, and then we’ll explore available ways to approach its adoption.
NDC components and the benefits they bring to airlines
The NDC program can be compartmentalized into seven main areas of change that address various constraints that airlines have been experiencing for years.
Offer personalization. From the beginning of commercial aviation, carriers have been dividing their customers into two distinct groups: business and leisure. Business travelers spend more and book flights right before departure. Leisure travelers are price-sensitive and book in advance. Today this way of customer segmentation looks primitive, given what new personalization technologies can offer. To get a more granular look at the customers, airlines need new ways of getting personal traveler data. NDC-enabled APIs can integrate collected customer information directly from distributors so that nothing gets lost on the way. What are their individual preferences, budget expectations, and typical itineraries? Are they business or leisure travelers, etc.? This is actionable information supporting the creation of customized offers to meet the exact, known needs of each traveler.
Rich content integration. Unlike EDIFACT’s ablilty to submit only fares and schedules to OTAs, the NDC standard allows for delivering comprehensive flight information to travel agents. So now customers can have a true comparison shopping. What’s the legroom in your planes, is there wi-fi on board, do you offer a third bag free, or is your aircraft interior simply irresistible? These are selling points to encourage a customer to pick your airline — if only you can tell them about it.
Ancillaries marketing. It’s no secret that core transportation services deliver tiny margins. So additional services like priority boarding, seat choice, or class upgrade secure the most profit to carriers, especially for low-cost airlines. With NDC, you can share your ancillaries with travel agents so that they can market them.
Order management. Via EDIFACT pricing process involves intermediaries like Airline Tariff Publishing Company (ATPCO). In this case, airlines have to file fares and fare classes with ATPCO. Usually, it’s done a year in advance, although carriers can modify fare tariffs on the go. GDSs get fares from ATPCO and, in their turn, GDS create offers based on these pre-filed fare classes and rules that go with them.
Booking with NDC goes a step further. Here, airlines reply directly to distributors’ shopping requests: carry out the booking and servicing, ticketing, and payment processes. They’re able to make offer adjustments to several real-time factors such as current load and yield management. In the near future, NDC will enable airlines to dynamically price their offers based on demand and supply.
Airline Profile. Now that airlines are in control of their inventory, they may want to control the volume and types of NDC shopping requests coming from distributors. That’s when they will implement an Airline Profile (AP). It’s a document that defines interactions, such as:
- who can connect to the airline host system;
- what Points of Sale (POSs) are authorized;
- which systems are accessible for particular shopping requests.
Currently, AP as an object of the NDC environment isn’t often used by airlines. So, aggregators filter the airlines’ route proposals using their own algorithms based on such criteria as price, number of flight legs, flying time, etc.
Interline ticketing. When a traveler’s itinerary requires multiple flights from multiple carriers, airlines have to collaborate to fulfill this need. Should an aggregator have such a request, they confirm in the airline profile whether an offer responsible airline (ORA) wants to serve this request. Once it’s confirmed, an ORA has to establish an NDC offer with a participating offer airline (POA). The ORA offer management system (OMS) communicates with POA OMS, receives their part of the offer, and generates a complete offer for the traveler. The NDC standard facilitates all the interactions among a travel agency, an aggregator, ORA, and POA so that every participant is informed about the complete order payment and the issued ticket.
One order distribution. An NDC extension, ONE Order simplifies distribution by combining booking, ticketing (TKT), and various document records (EMD) into a single customer order record. This way, third parties need to access just one record to get the required data.
NDC is flexible, so together with your partners, you can agree to do one particular NDC component. For instance, Irish airline Aer Lingus uses NDC just to sell ancillaries, while Shenzhen Airlines applies the standard for flight distribution only.
Now, we’ll compare GDS NDC products as well as XML third-party solutions against the list of NDC components. We’ll show what NDC benefits you can reach with them, as it’s rarely the case that a solution offers a full range of them.
NDC implementation scenarios
Before we tackle some of the main NDC providers, we’d like to outline the scenarios for NDC implementation.
Mainly, there are two ways to implement NDC in the airline:
- Completely move from the existing PSS and retailing suite to an NDC-capable one.
- Directly integrate the NDC XML API into the existing airline’s passenger service system (PSS).
The first one is offered by some of the major GDSs: Sabre, Amadeus, and TravelSky. Initially, NDC was supposed to bypass GDSs to exchange content directly with OTAs, TMCs, and metasearch engines. That’s the approach that Lufthansa took. But things aren’t that simple. Most airlines still need GDSs to distribute their flights. On the other hand, not willing to be left out, GDSs quickly caught up with the trend and now they are offering a number of NDC products.
It’s not realistic to think that GDSs will disappear. For airlines, it’s simply not practical to handle large volumes of their complex distribution on their own. GDSs still have their niche and NDC is just transforming their existing capabilities.
The second implementation scenario is less radical. Here, an XML API forms an integration layer between the PSS and content aggregators. The API usually comes integrated into a retailing platform that manages offer and order and has additional merchandising services for airlines. But it’s not always the case.
The second scenario also works when a third party connects you to their agencies network via the NDC channel. That’s the case with metasearch Skyscanner and GDS Travelport.
Further, we’ll overview the leading solutions to make your airline NDC-capable.
Sabre: Digital airline commercial platform
In 2018, Sabre was recognized both as an IT provider and an aggregator by level 3 NDC certification. According to IATA, the Sabre Commercial Platform is the most effective retail solution for airlines. It’s actually a redesigned NDC-capable Interact Interface. It can also personalize flight options using machine-learning algorithms. They determine customers’ segments and their willingness to pay to set individual offers for each traveler.
NDC product. Digital airline commercial platform has a microservices architecture allowing airlines to flexibly configure it. The platform includes:
- a planning and scheduling suite
- a revenue-management suite
- an offer-management suite
- a reservations and departure-control (PSS) solution
- the SabreSonic Digital Experience — online booking engine for travelers
- the SabreSonic Digital Workspace — agent interface to distribute ancillaries
- and an API Hub layer that connects to distributors (OTAs, TMCs, and airline’s own websites)
How to enable NDC and integrate with aggregators. The Sabre platform is the only one in the industry able to deliver end-to-end personalized retailing. It’s a technology stack that airlines can fully adopt, PSS included. However, the architecture of this platform also allows for using chosen components, if an airline doesn’t want to engage in the full transition from their own PSS. The platform collects all NDC content in a single source and then distributes it across the systems via XML APIs from the Sabre API Hub. Their common workflow includes shopping for airline offers, pricing the offer, and creating, canceling, or changing an order.
Amadeus possesses IATA dual level 4 certification. It’s the highest-ranking compliance for IT vendors. It confirmes extensive use of offer and order management along with additional servicing messages.
Amadeus has a dedicated program — NDC-X — to promote NDC and ensure its work for the travel players involved. The program covers all the NDC activities across Amadeus — both as an IT provider and an aggregator. Among those, there is Amadeus Altéa PSS and Navitaire PSS. They are now NDC-capable and can distribute advanced merchandising offers to third parties.
NDC product. Amadeus, similar to Sabre, provides both PSS- and GDS-level integration. Altéa PSS supports end-to-end NDC booking flow. It includes offer and order management capabilities out of the box.
How to enable NDC. For airlines that use Altéa PSS, Amadeus has integrated NDC capabilities in it. So now they can make advanced merchandising offers and reach NDC distribution channels that provide a consistent shopping experience. As for New Skies, it’s a full-fledged NDC-capable solutions suite, PSS included. So airlines can fully adopt it replacing their legacy system.
NDC integration with aggregators. To integrate travel sellers, Amadeus offers a Travel platform. Using the IATA standard, the platform enables airlines to access and sell their NDC offers to Amadeus’ distribution network. As a result, travel sellers are able to offer rich content to their customers.
The Navitaire NDC Gateway XML APIs connect airlines’ New Skies platform to travel agencies and corporate booking distributors. Through the platform, airlines can customize agency charges and commissions, and negotiate allotments and fares.
Travelport: NDC injected into existing distribution products
A GDS pioneer in NDC, Travelport was the first one to get IATA certified as an NDC aggregator back in 2018. Travelport works with airlines connecting travel agencies to them. Agencies, in turn, gain access to the airline’s customized offerings, a wider range of fares, and more content overall.
NDC product. Travelport aims at easing NDC adoption mostly for air sellers. That’s why they release NDC capabilities into the existing familiar systems. Branded fares and ancillaries solution is available through both Travelport Smartpoint and Trip Services NDC APIs.
How to enable NDC. To start working with Travelport NDC channels airlines have to be NDC Certified. What this basically means is that order management and other NDC features must be first designed and developed by carriers themselves or other tech providers before Travelport can enable distribution. But don’t take our word for it, contact Travelport directly.
NDC integration with aggregators. The GDS taps into airlines’ NDC content and then distributes it for offline agencies in Travelport Smartpoint. Currently, six airlines are supplying NDC content into Smartpoint, including Singapore Airlines (SIA) where Travelport connects to their content through its NDC-capable POS systems. Travelport also assists United Airlines in providing tailored content to its customers through its subscriber network.
This year Travelport is also releasing NDC APIs for Trip Services, a booking platform for OTAs.
So now agencies can search and book NDC content from Travelport’s suppliers. One of them, Qantas Airways, will be among the first available through this channel.
TravelSky: NDC-capable passenger retailing system and Carrier Distribution Platform
In China, TravelSky is a dominant GDS, PSS, and airline IT provider. Initially, TravelSky was considered a stumbling block over NDC distribution between Chinese carriers and external intermediaries. With time, they’ve embraced NDC standards.
Ambitious to expand worldwide, TravelSky offers the QUICK Passenger Retailing System (PRS). It’s a hybrid of PSS and eCommerce tools. It differentiates offers and enables dynamic pricing by taking in passenger info and a range of flexible attributes.
NDC product. As an airline, you must implement QUICK PRS first. Then, you can distribute NDC content via:
- 1E GDS,
- Carrier Distribution Platform (CDP), and
- Open XML API.
However, CDP is a standalone NDC enabler. Airlines can integrate it with their PSS via API to source inventory. Besides being an NDC aggregation solution, CDP has offer and order management functionalities and a pricing module.
Market presence: More than 99 sellers and over 30 airlines including Air China, Hainan Airlines, and Shandong Airlines.
How to enable NDC and integrate with aggregators. QUICK comes connected to 1E GDS via NDC wherever possible. So airlines can distribute through 1E or request connection to another GDS. Besides that, QUICK distributes NDC offers to subscribed agencies through the CDP front end via an NDC API. But what if you’d like to expand distribution channels beyond the CDP network? QUICK provides an open XML interface to connect with OTAs, other GDSs, and metasearch engines. The main API includes user profiles, product search, order management, and departure service.
OpenJaw dynamic retailing platform: t-Retail NDC
A subsidiary of TravelSky, OpenJaw is an IATA NDC and one order strategic partner with Level 4 compliance. OpenJaw offers a suite of travel retailing platforms.
One of them, t-Retail is an offer and order management system. Airlines can make dynamic AI-driven offer bundles. Through the Rules Engine — a retail administration console, they control how their flights and ancillaries are priced and presented across distribution channels. t-Retail also allows airlines to offer a portfolio of loyalty rewards.
NDC product: An NDC-capable offer/order management system, t-Retail includes:
- an integrated supplier marketplace;
- the t-Retail API;
- a travel booking engine to sell ancillary products, and
- a marketing manager with landing pages for all routes and currencies, promotional messaging, etc.
Market presence: both airlines and aggregators. OpenJaw Tech is known for supporting such big brands as British Airways, Iberia, and Hong Kong Airlines, etc.
How to enable NDC: Integrate airline PSS with the t-Retail offer/order management system.
Integration with aggregators. t-Retail is integrated with GDSs, hotel chains, bed banks, aggregators, car rentals, activities, and events. With the t-Retail API, airlines can build selling flows across channels and devices and deliver personalized responses.
Farelogix’s modular NDC platform: FLX Airline Commerce Gateway
Farelogix is an airline tech vendor that provides NDC Level 4 certified FLX Airline Commerce Gateway. It’s a platform to dynamically control and optimize offer elements and manage the order across sales channels.
NDC product. FLX Gateway consists of six components. Four of them are offer engines:
- FLX Merchandise supports ancillaries, bundles, and branded fares
- FLX Shop and Price for high volume NDC shopping optimizes revenue through predictive analytics and business intelligence.
- FLX Schedule Builder sets up dynamic rules-based schedules.
- FLX Availability Calculator enables off-PSS calculation of airline’s availability.
The other two are FLX Open Connect and NDC API.
Market presence: 18 airlines, 85 aggregators, over 250 sellers. Among Farelogix clients are such giants as American Airlines, Air Canada, Delta, United, Flydubai, etc. Meanwhile, Sabre is trying to acquire Farelogix, but legal issues are getting in the way.
How to enable NDC. FLX NDC API connects directly to an airline reservation system via the FLX Open Connect component. An airline can use any messaging protocol and the API will then standardize the content into NDC XML. Currently, FLX Open Connect is compatible with such PSS/airline host systems as Amadeus Altéa, Sabre Multi-Host, Worldspan, Galileo Airline Host, DXC, IBM RES III, and Mercator/Mars.
Integration with aggregators. The FLX NDC API can be directly implemented into content aggregators. For travel agents, Farelogix offers a travel-selling interface SPRK. It comes fully integrated with airline Open Connects and NDC API.
ATPCO and SITA community-driven marketplace: NDC Exchange
As we’ve mentioned before, the Airline Tariff Publishing Company is at the heart of airfare data distribution. IATA names ATPCO’s dataset the most comprehensive in the air travel industry. It’s standardized and scalable. Hence, easy to consume via NDC APIs.
Together with airline IT provider SITA, ATPCO developed a marketplace NDC Exchange. Airlines can distribute their NDC content through NDC Exchange without having to work individually with every seller.
ATPCO’s primary focus is on pricing and rich content. Platform’ component Routehappy provides APIs for airlines to standardize their content into a distributable, easy-to-consume format. Then, its APIs match offers to rich content that better promotes them. Other features include airline profile with intelligent filtering to ensure airlines receive only the requests they want.
NDC product. The NDC Exchange is a platform that addresses NDC implementation challenges. It includes:
- API management,
- a baggage calculator
- an ancillary offer engine,
- message routing,
- schema transformation, and
- an airline API adapter.
Market presence: 20 airlines, one aggregator, and a seller.
How to enable NDC and integrate with aggregators. Both airlines and sellers can connect to the marketplace via an API regardless of their API standard or version. Aggregators don’t have to build separate connections to access their airline partners’ content. Connected to NDC Exchange via a single API, they can receive offers from any airline connected on the other end.
TPConnects: Merchandising and Retailing Platform
TPConnects is one of the top five NDC providers. It’s IATA NDC Level 3 Certified travel aggregator and IT provider based in Dubai.
For airlines, TPConnects offers a merchandising and retailing platform — NDC standard Gateway. Integrated with an airline PSS, the platform connects airlines to distribution channels like travel agents, corporates, and OTAs. It’s centralized control of point of sale channels.
Airlines manage the platform from a rules engine. There, they personalize offers for each customer based on the rules they define depending on supply, demand, seasonality, etc.
NDC product. Independent of any third party, TPConnects NDC Gateway API can be integrated with any OTA, travel aggregator, or mobile apps on the retail side and integrate directly with PSSs on the carrier side.
Market presence: 5 airlines, 48 sellers. TPConnects is an NDC Tech Partner of the Lufthansa Group airlines.
How to enable NDC: direct integration into the PSS. TPConnects NDC Gateway ties to the airline’s current PSS making it NDC compliant from end to end.
Integration with aggregators. The platform comes integrated with IATA Financial Gateway, non-air suppliers, internal systems like frequent flyer programs, revenue management, etc.
Airlines can give out the NDC API to any aggregator, OTA, or metasearch engine. It’s an XML-based connection to the airline PSS called Airline Agent Platform. It enables them to access an expanded and personalized set of airline products and services.
Skyscanner’s NDC seller: Direct Booking platform
Skyscanner was the first travel search engine to adopt the NDC standard into its Direct Booking platform. It’s a meta-search platform that connects OTAs and airlines with customers. But in this case, Skyscanner becomes an OTA itself enabling direct NDC bookings.
Coming onto Skyscanner’s Direct Booking platform, airlines broaden their customer reach. In addition, customers have a better experience booking flights through the Direct Booking platform, where they have access to more information.
NDC product. Direct Booking’s NDC API facilitates shopping, booking, and servicing workflows including the cross-selling of ancillary services among airlines directly through Skyscanner.
Market presence. Currently, the platform integrates British Airways, Iberia, Finnair, Scoot, and Virgin Atlantic via its NDC channel.
How to enable NDC. Skyscanner engineers establish a direct connection between its platform and a new airline. Their NDC API connects into airline distribution data from one side, and to the Skyscanner Direct Booking platform from the other side. As a result, an airline owns the offer and receives a booking straight in their systems.
For more details regarding Skyscanner’s NDC platform, get in touch with them.
Making your airline NDC capable: a strategy-level guide
You may prefer establishing NDC connectivity with distributors on your own. It’s mostly relevant if you operate within specified geographical limits, as you don’t need to integrate with many channels.
Before you get going, you have to realize that adopting NDC isn’t just about a new message standard. It concerns a vision of becoming an airline retailer. NDC encourages airlines to rethink their channel distribution strategy and take back control of their inventory.
Let’s consider NDC implementation using the example of British budget carrier Flybe.
1. Settle the motivation for NDC adoption
Define the constraints you have and how NDC implementation will help you resolve them.
Flybe wanted to enable the purchase of baggage add-ons for corporate customers. So they settled on an industry-level NDC API for corporate buyers.
2. Formulate your NDC implementation strategy
You need a strategy to support your NDC initiatives. It should consider three aspects: customer-first, intelligent retailing, and integrated content support. The best way is to blend e-commerce, merchandising, distribution, and revenue management teams to align your strategy and objectives.
Flybe’s traveler-oriented strategy was to provide a consistent and improved offering to corporate customers that use a TMC. Retailing efficiency was about to be improved by enabling transparent shopping as well as better communication with corporates and travel agencies. In tech terms, they struggled to achieve the same look, feel, and sale of products across all distribution channels and devices.
3. Develop approach to your NDC implementation
To approach its strategy, Flybe divided it into two phases. First, they implemented order management along with payment and ticketing. Second, the airline worked on ancillary selling capabilities.
4. Define the scope of your project
If you want to be able to provide NDC services, your solution has to be approved by IATA. The level of NDC certification will dictate the scope of your project.
Flybe aimed to achieve the highest compliance level, so they had to present a full range of services through NDC. Therefore, their project involved:
- the full end-to-end sales process,
- taking in offer management,
- order management,
- payment and ticketing,
- rebooking capabilities, and
- ancillary sales.
5. Invite IT provider on board, if necessary
If your team isn’t familiar with NDC tech specifications, you may need a hand from IT providers offering development and implementation of NDC solutions.
Flybe engaged Hewlett Packard Enterprise (HPE), travel and transportation IT provider. HPE developed a reusable NDC API — NDC Adapter. It connects with the airline’s specific configurations, including its reservation and fare systems, handles rich media content, and integrates with Flybe’s PSS.
6. Integrate business partners
It takes a lot of effort to align and synchronize multiple vendors. In this case, clarity and productive collaboration can help reduce implementation time.
Flybe didn’t play alone. Besides HPE, they involved their corporate customer PwC, booking tool provider KDS, payment company Adyen, and the aggregator Travelfusion with its distribution and payment platform Direct Connect.
NDC adoption enabled Flybe to present the complete array of its available products through the corporate channels.
Barriers to NDC adoption
Before you decide to join the NDC airline distribution evolution, beware of the hurdles you’ll have to face.
The bill and the skill. Switching to NDC will inevitably entail additional expenses: Hire the right professionals or educate your existing team, get IATA accreditation, connect to or develop your own technical infrastructure, you name it. In this regard, some fear that the cost of implementation and maintenance can outweigh the benefit to the early adoption of NDC content.
Limited distribution market. NDC adoption requires changes and it’s quite pricey. No wonder, many OTAs and TMCs are reluctant to give up the already familiar connectivity format EDIFACT, especially considering that GDSs also offer NDC support.
No implementation standard. The XML schema is a standard, but each airline realizes it in their customized APIs in a different way. Hence, aggregators have to integrate with each NDC channel separately. It’s probably the biggest issue that hinders the global adoption of this technology.
Originally published at AltexSoft tech blog “New Distribution Capability (NDC) for Airlines: Key Providers and Implementation Scenarios”