Has NDC Fully Transformed Airline Distribution or Simply Partially Modernised the Landscape?

The New Distribution Capability (NDC), introduced by the International Air Transport Association (IATA) in 2012, was conceived as a groundbreaking initiative aimed at transforming the airline distribution ecosystem. It promised to modernise the way airlines distribute their products, offering a richer, more dynamic, and more personalised experience for consumers. NDC was also intended to enable airlines to gain more control over their product offerings and reduce their reliance on legacy Global Distribution Systems (GDSs) like Amadeus, Sabre, and Travelport.

Despite its ambitious goals, over a decade since its introduction, the question remains: Has NDC truly delivered on its promises to transform the airline industry, or has it simply partially modernised the existing systems? This article explores the full spectrum of NDC’s features, the progress made, the challenges faced, and the future outlook for NDC in the context of its initial objectives.

Understanding the Full Spectrum of NDC Features

NDC was designed to bring several critical changes to the airline distribution landscape. Its objectives included:

1. Richer Content and Product Differentiation: Allowing airlines to present their products more dynamically and visually, similar to the experience on their own websites. This would enable airlines to differentiate their offerings better and communicate the value of their ancillary services (such as seat selection, extra baggage, and in-flight services).
2. Enhanced Personalisation and Dynamic Pricing: Facilitating a more personalised shopping experience by leveraging customer data to offer tailored services and dynamic pricing, thereby improving customer satisfaction and loyalty.
3. Increased Transparency for Consumers: Providing customers with a clearer view of the total cost of travel, including ancillary fees and surcharges, which would lead to more informed purchasing decisions.
4. Greater Control for Airlines: Enabling airlines to have more direct control over their product distribution and pricing strategies, reducing their dependency on GDSs and allowing them to bypass traditional distribution fees.
5. Streamlined Processes and Reduced Costs: Simplifying the booking and distribution process, thereby reducing costs associated with traditional GDS models and enhancing operational efficiency.
6. Empowering Travel Agents: Giving travel agents direct access to richer content and more flexible pricing options, enabling them to provide better service to customers and remain competitive in a rapidly changing market.

NDC’s Impact So Far: What Has Been Achieved?

Since its introduction, NDC has made notable strides in certain areas of airline distribution. Some of the achievements include:

1. Modernisation of Technology and Content Distribution NDC has successfully moved the industry away from the decades-old GDS specific schemas and moved to a more modern, standardised framework. This shift has enabled richer content distribution, allowing airlines to display more detailed product information, such as seat maps, fare families, and promotional visuals. This richer content helps airlines better differentiate their products and provide a more engaging shopping experience.
2. Partial Achievement of Product Differentiation and Transparency NDC has enabled some level of product differentiation, with airlines now able to offer bundled products, dynamic fare pricing, and ancillary services directly through the NDC-enabled channels. However, the goal of achieving full transparency for consumers has been only partially realised. While NDC allows for more detailed product offerings, the variability in its adoption and implementation has led to inconsistent consumer experiences across different distribution channels.
3. Enhanced Personalisation Capabilities One of the promising aspects of NDC has been its ability to support enhanced personalisation. Some airlines have successfully leveraged NDC to offer more tailored pricing and service options based on customer profiles, purchase history, and preferences. However, the level of personalisation that can be achieved still varies widely among airlines, often limited by data integration challenges, privacy regulations, and the technical capabilities of the implementing platforms.
4. Continued Dependence on GDS Infrastructure Although NDC was intended to reduce airlines’ dependence on GDSs, in reality, GDSs have adapted quickly by incorporating NDC into their offerings. For example, Amadeus, through its NDC-X product, provides NDC capabilities alongside traditional services. GDSs have thus maintained their relevance by becoming aggregators of both NDC and non-NDC content, offering travel agents a comprehensive, integrated solution that mitigates the need for them to develop their own costly aggregation technologies.
5. Limited Cost Reductions and Operational Efficiency Gains While NDC promised to reduce distribution costs by enabling more direct sales channels, these benefits have not been fully realised. The coexistence of NDC with legacy systems has created a hybrid distribution model that can be more complex and costly to manage. Airlines still often rely on GDSs to handle the diverse range of booking scenarios that NDC alone cannot yet fully support, particularly for complex itineraries and corporate travel bookings.

The Challenges of NDC Implementation

Several challenges have hindered the full realisation of NDC’s objectives:

1. Fragmented Adoption and Implementation NDC adoption has been uneven across the industry, with different airlines adopting different versions of the standard at varying paces. This lack of uniformity complicates the integration of NDC content into travel agency workflows and has limited the seamless, global implementation of the technology. Some airlines have been early adopters, while others remain cautious, contributing to a fragmented landscape.
2. Technological and Infrastructure Barriers The shift to NDC requires significant technological investments, both from airlines and travel agencies. Developing the necessary aggregation and integration technology is costly and complex, particularly for smaller travel agencies and less technologically advanced airlines. This technological barrier has slowed widespread adoption and has kept many travel agents reliant on GDS platforms that offer NDC as an integrated feature rather than a standalone solution.
3. Limited Support for Mixed Content and Complex Itineraries NDC currently struggles to support the full range of functionalities provided by legacy GDSs, especially when it comes to managing mixed content (combining multiple airlines, fare classes, and ancillaries) and complex itineraries (multi-leg, multi-destination trips). For travel agents who require comprehensive booking capabilities, GDSs remain indispensable.
4. Data Privacy and Integration Issues The enhanced personalisation capabilities promised by NDC require access to granular customer data. However, data privacy regulations (such as GDPR in Europe) and the challenges of integrating diverse data sources have limited the extent to which airlines can leverage customer data to offer personalised experiences.
5. Resistance to Change and Legacy Mindset There remains a significant amount of resistance to change within the industry. Many travel agencies and even some airlines are hesitant to move away from the established GDS systems that have served them for decades. The comfort and familiarity of the legacy systems, combined with the upfront costs and learning curve associated with NDC adoption, have contributed to a slower transition than originally anticipated.

Conclusion: NDC Has Changed the Landscape, But Its Full Potential Is Yet to Be Realised

NDC is undoubtedly here to stay and has already made meaningful changes to the airline distribution landscape. It has modernised the technological framework of airline distribution, enabled richer content and some degree of product differentiation, and introduced new possibilities for personalisation. However, its original objectives—such as fully empowering travel agents, significantly reducing distribution costs, and achieving a seamless, global standard for airline content distribution—remain far from fully realised.

The industry is in a transitional phase, where NDC and legacy systems coexist, creating a hybrid distribution environment. For NDC to achieve its full potential and truly transform the airline distribution model, several steps are needed:

• Greater Standardisation and Consistent Adoption: The industry must work towards greater standardisation in how NDC is implemented across airlines and travel agents. This will help create a more consistent and seamless experience for consumers and reduce integration challenges.
• Increased Collaboration Between Stakeholders: Airlines, travel agents, GDSs, and technology providers must collaborate more closely to address the remaining technological and operational challenges, such as data integration, privacy concerns, and support for complex itineraries.
• Investment in Technology and Skills: Both airlines and travel agencies need to invest in the necessary technology and skills to fully leverage NDC’s capabilities. This includes developing better aggregation tools and training staff to work with new systems and data.

While NDC has undoubtedly shifted the dynamics of airline distribution, achieving its full potential on a global scale will require continued innovation, collaboration, and commitment from all industry stakeholders. Until these conditions are met, the goals of NDC will remain a work in progress, with significant opportunities yet to be unlocked in the journey towards a more modern, efficient, and customer-centric airline industry.