7th December, 2022
What do distribution agreements signed by established carriers this year signal as far as progress in airline distribution is concerned? What has changed that paves way for more indirect channel bookings coming via NDC?
Airlines, when they sign new agreements, often talk about content flexibility, expanding retailing capabilities etc.
It must be remembered that NDC, a technology standard, has been around for a while. Before the pandemic stuck, 21 airlines had committed that by the end of 2020, 20% of their indirect sales was to be made using NDC. There are several ways in which a NDC connection can be used, but what the industry keenly follows is how GDSs are availing them and what ratio of bookings are in favour of NDC vis-à-vis EDIFACT.
The industry has seen progress in terms of what NDC API functionality can do now – shopping, upsell, ancillaries etc. and also in terms of servicing (cancellations, change in itinerary etc.). One area that, however, demands attention is interline NDC and going by latest developments, airlines are already looking at travel tech companies, which are facilitating the same.
From distribution perspective, what’s interesting is that airlines work on a tier of distribution channels, and then plan what’s offered via each of them. All of this is evaluated in terms of what it means for indirect partners and also whether a surcharge is being levied or not. A way to differentiate in such distribution strategy is to not offer the lowest fare or a fare brand, air ancillaries, discounts etc. in case coming from an EDIFACT source. So, what to expect on this count?
Also, there are certain integration requirements for NDC. Are agencies open to working with third party technology companies or NDC aggregators other than GDSs?
Let’s see how indirect distribution shapes up in 2023!
By Ritesh Gupta,
Ai Team
