20th September, 2021
NDC or New Distribution Capability standard continues to be in news.
Be it for what airlines are doing to be in control of the offer to standardization to being the merchant of record for transactions coming in via the indirection channel, the talk around airline distribution as well as overcoming associated hurdles continues.
In a recent post, Ann Cederhall wrote about what do we want to achieve by implementing NDC?
Ann referred to ensuring that there is uniformity in what is being offered and the overall experience, irrespective of the channel a travel shopper opts for an offer from one airline (and ideally more companies together in that offer), and also how the same brings down cost (cost associated with booking directly on the airline PSS, how travel agents should go about sourcing content etc.) and ending up with more control (focusing on agency portals and own APIs, issuance of tickets etc.).
As discussed during Ai’s conferences, it is clear that there are critical financial changes that come along with NDC. All priced offers are created by the airline’s Offer Management System and no filed fares are used. Also, all interline offers include a settlement value for each service that is offered. This is the amount that the participating offer airline expects to receive from the offer responsible airline when the service has been delivered. NDC will continue to create E-Tickets but once we move to ONE Order there will be no tickets.
Intermediaries/ other stakeholders
What are technology-related and implemented-related challenges when we talk of NDC?
As Kyte’s Alice Ferrari explained in a blog post, NDC is “not so new anymore” and airlines “need up to date technology” going forward. And when we talk of standardization, the lack of uniformity in various airlines’ API also poses a challenge for other stakeholders.
Merchant of Record and transactions
Airlines are looking at supporting payment methods/ options that customers value and prefer. The popularity of buy now pay later depicts this. Also as UATP and BitPay point out, cryptocurrency continues to gain momentum as a safe and trusted payment option, especially for high-value purchases like travel. So how should airlines go about taking responsibility for processing the payment?
During Ai’s webinar last week, “NDC – Retrofitting Payments”, Thibaut Ruy, Head of Settlement with Orders Program, IATA explained that the payment process has to be efficient in order to capitalize on NDC. Tokenization, data security, managing chargebacks, refunds and fraud are some of the topics that are vital for airlines to come to grips with as they gear up to be the Merchant of Record for transactions via the indirect channels in the NDC environment.
Also, in order to be in a retailer, airlines have to ensure the payment experience offered is top-notch. From a payment specialist’s perspective, Stephane Druet, SVP, Global Head of Product and Marketing at CellPoint Digital asserts that airlines can count on payment orchestration to benefit on several counts. As for improving the CX, Druet recommended:
- Accept card payment right away (hint: use a failover option with another acquirer if the first routing doesn’t work).
- Recognise a customer and don’t ask him/ her to re-enter card details. Customers intend to pay in one click like with Amazon.
- Look at alternative payment method options tailored for each and every market.
- Assess options like paying over several months (and evaluate its impact on aspects like going an upgrade).
- Being transparent with how much to pay – multi-currency pricing and dynamic currency conversion
- Streamlining experience for mobile, online etc.
Momentum
Certain carriers are making steady progress. And when they make announcements it bolsters NDC. For instance, Finnair has confirmed that it is gearing up to end all legacy EDIFACT distribution by end of 2025.
A spate of initiatives are being planned from July 2022 include best trade content through NDC direct connects, supported by additional incentive packages; in addition to direct connects, NDC content will only be distributed through Finnair Certified NDC aggregators (Aaron Group, Travelfusion, Travelsky and Verteil); removal of Finnair Light fare brand from EDIFACT’ additional price points in NDC; NDC-exclusive bundles etc.
By Ritesh Gupta
Ai Team
