The introduction of New Distribution Capability (NDC) technology by airlines is reshaping the landscape of airline sales and distribution. Travelport highlights various complexities associated with this change.
Reports indicate that while NDC aims to offer personalised experiences resembling digital retail giants, it often results in a cumbersome and complicated purchasing process for consumers.
Overview of NDC Technology
The New Distribution Capability (NDC) is a technology standard developed by the International Air Transport Association (IATA) aimed at modernising the way airline products are distributed and sold. It promises personalisation and enhanced retailing opportunities for airlines, closely resembling the e-commerce experiences offered by giants like Amazon.
Despite its ambitious vision, the implementation of NDC has been met with mixed reactions within the travel industry. The integration of this new technology by airlines is seen by some as a strategic move to gain greater control over distribution channels, potentially limiting the role of intermediaries such as travel agencies and global distribution systems (GDS).
Challenges Faced by Intermediaries
A major concern raised by travel technology company Travelport is whether NDC acts as a ‘Trojan Horse’ for airlines to drive direct-to-consumer (DTC) sales. Travelport’s report, titled ‘Modern Retailing’, highlights that purchasing flights through intermediaries has become ‘more complicated’ and ‘more cumbersome’ due to NDC, challenging the essence of price transparency.
The aviation industry’s landscape has drastically transformed, as noted by Travelport’s report. Airlines now offer an overwhelming selection of products, growing from 500 in 2010 to 10,000 in 2024. This explosion of options leads to a time-consuming comparison process for consumers, who struggle to navigate the myriad of brands, products, and price points available.
Perceived Impact on Consumers
A significant number of travellers express dissatisfaction with how personalised offers are materialised, contradicting NDC’s promise of personalisation. Travelport’s survey involving 1,659 air travellers across the UK, Germany, the US, and South Africa revealed that over half of the respondents found airline products to be increasingly complex and challenging to comprehend.
Further insights from the survey indicate that a considerable percentage of consumers feel burdened by hidden fees within these products, with 66% highlighting this concern. Additionally, the restriction of essential information was noted by many, with 69% pointing out the limitations they face when trying to access pertinent details before making a purchase.
The issue of time inefficiency in comparing products is also paramount. A staggering 80% of respondents described fare comparison as ‘very time consuming’, further exacerbated by the absence of confidence in securing the best deals — a sentiment shared by 71% of those surveyed.
Airlines’ Stance on NDC
While airlines advocate for NDC as a tool for enhancing consumer personalisation and creating more dynamic retail environments, this notion is challenged by various industry stakeholders. Critics argue that the real motive behind the technology is to shift sales channels towards direct sales, effectively sidelining GDS and other intermediaries.
Airlines implementing NDC protocols possess varying interpretations, creating inconsistencies in consumer experience. Travel agents often encounter duplicated content or the need to access multiple systems to review and compare products. This approach contradicts the streamlined, efficient experience that NDC initially promised to deliver.
Call for a Unified Platform
The ongoing concerns and debates surrounding NDC implementation call for heightened cooperation among industry players. A unified effort is essential to alleviate the complexities currently faced by consumers and intermediaries alike.
By addressing these multifaceted challenges collaboratively, the travel industry can work towards a future where modern retailing benefits all stakeholders, offering more streamlined and transparent processes without compromising the integrity of distribution channels.
Conclusion on Consumers’ Experience
The Travelport report ultimately suggests that, while the intended goals of NDC technology are noble, its current execution falls short of those promises. Consumers report an overwhelming sense of complexity and lack of clarity when engaging with NDC-enabled products.
Through continued dialogue and industry-wide cooperation, the hope remains that NDC can eventually fulfil its potential, bridging the gap between airlines, intermediaries, and consumers for a more efficient and transparent travel booking experience.
In conclusion, while NDC technology presents opportunities for enhancing customer experiences, its current implementation poses significant challenges. Collaboration is key to realising its true potential.
As the industry continues to navigate this evolving landscape, it remains crucial for airlines and intermediaries to work together towards a more consumer-friendly approach.
