NDC for Merchandising
In this issue of our bi-monthly newsletter we would like to share how airlines can apply NDC to enhance their direct channel retailing capabilities.
NDC, or New Distribution Capability, was launched by IATA in 2012 to improve how airline content is distributed, essentially providing travel agents access to a full breadth of an airline’s ancillaries for a more streamlined purchasing experience. It is a travel industry supported program for the development and market of the new XML-based data transmission standard. The NDC Standard enhances the capability of communications between airlines and travel agents and is open to any third party to implement and use.
For the last 40 years, and a few more years to come, most traditional airlines have used global distribution systems and travel agents to distribute their flight offerings and issue electronic tickets. With the rise of the internet and more modern communication channels, airlines have pushed their direct channels using web portals and mobile applications.
In the new digital-centric world, customer expectations have changed and increased. There is a move from a flight (product) focused approach to personalized offers in real-time. Or in other words: “not what we have as products, but what we can offer to you” is king.
With NDC, IATA is defining new communication standards that will replace existing EDIFACT messaging with modern technology: Web-Services using XML document formats. This not only allows airlines more flexibility in terms of message content (e.g. rich content including pictures and videos) but also the possibility to distribute their product more openly in the market.
Following diagram illustrates the simplification of product offering through IATA’s NDC initiative. Schedules, airfares and seat availability will no longer be distributed through separate channels, but comprehensive offers – which include everything from product description, schedule, price and ancillary services – are constructed, potentially aggregated, and distributed in real-time consistently through all channels:
The next diagram illustrates the simplification of order management through IATA’s NDC initiative. Reservations (PNR), E-Tickets and Electronic Miscellaneous Documents (EMD) are no longer separate objects being exchanged, but “One Order” will cover these aspects holistically and consistently through all channels:
The meaning of a product for airlines is no longer just a “plane ticket”. It fully integrates ancillary services, or “optional services”, such as; individual seats, fast-track boarding, pre-order meals, onboard meals, duty free items, and even lounge access, that may be bundled in the product offer or offered as additional à la carte services. The main purpose of NDC is to make it easier for airlines to sell more products and services – and more flexible – via the travel agent channel, not just through its own website, generating more revenue, streamlining processes, reducing cost and thus increasing profitability.
Using our NDC enhancements, NDCplus, an airline can transform itself into a fully open retailer. Offers are no longer limited to flights and ancillaries, but may include accommodation, car rental, merchandizing, insurance, rail and other products. NDCplus also offers better order management options for TMCs and travel agents.
Our oops.solution e-commerce engine provides airlines with the ability to design and market new competitive and personalised products without constraints. Did you know that one of our partners uses our oops.solution product and pricing management engine for tax-free and on-board merchandizing?
We will dive into more details about our oops.solution in the next newsletter……to be continued, see you in May.
Yours truly,
Sawitree Kaewsangjai
Sales & Marketing Manager