Tuesday, November 29, 2022

NDC-enabled distribution to lead the way

Last year the travel industry witnessed a multitude of financial set backs because of travel bans and country-wide restrictions, due to the Covid-19 pandemic. However a closer look will show us that it has been a period of accelerated growth for many airlines as they continued to develop and push forward with the New Distribution Capability (NDC) adoption programs. Today as borders open and travel picks momentum, more and more airlines are talking about taking the NDC-route.

The NDC is positioned not only as an enabler of future travel retailing, but it is also a critical one, coming at a time when the industry needs it the most.

While the airlines readied itself for change, we spoke to Bimal Jain, General Manager of Al Rostamani Travel and Holidays in the UAE to see how they’ve managed to stay ahead of the NDC-game.  

“No doubt that NDC and its rich-content is very relevant today – for both, the industry and the customer, but the challenge is that most airlines are at different levels of certification, which means that the airline NDC platforms are not yet at a uniform capabilities stage to deliver various sales and after-sales service aspects of the business, including interline sales, changes, reissues etc.” 

“Besides, we see that many airlines are not ready with their BSP payment options through the NDC channel. So while NDC is here to stay, the real need of the hour is for a well-thought out and smooth transition and most importantly, it should be a collaborative and mutually beneficial one,” said Jain.

The New Distribution Channel (NDC) is an IATA backed distribution channel, which has been in the works for a few years now and many airline companies have developed and enhanced their respective NDC platforms.

“But then a decision like Emirates’ not renewing their agreement with Sabre comes along and it definitely puts a lot of commercial and operational pressure on the travel trade, especially at a time when our industry is already facing other huge challenges due to the pandemic, so the timing of this move and the way it is being implemented may not have been ideal,” said Jain. 

However, adapting is the most relevant way forward. “Operationally, most travel agencies will have to adapt to the new transactional and reporting process and exploring the option for automation of the new processes will be a necessary investment to reduce manual workflow and increasing productivity, while adding value to their proposition by offering rich content products and services to their customers.

“It will not be surprising if some TMC’s have already instructed their teams to divert business to airlines that are not enforcing NDC channel use and thus influencing to maintain status-quo, until the NDC channel matures enough to enable effective travel management,” added Jain.

Some of the operational challenges that face the travel agencies include using a separate platform for NDC content transactions and reporting, which is bound to increase manual workflow for many companies.

“This is a new-norm scenario and it will push the entire market, including trade and customers, out of their comfort zone and challenge them with adapting and adopting to this new scenario. No doubt there will be initial teething issues to battle with, as there are a lot of challenges like transactions, reporting, travel policy integration, approval workflows and another very critical requirement for many global and multinational companies of data hand-off to their contracted security companies,” he added.

NDC is the future of distribution for most airlines, and it will surely help reduce distribution costs and increase revenue, by enabling the trade to offer their ancillary products and services. However the solution to sign-up with different airlines companies separately for their NDC platform can be a very cumbersome and challenging process.

“The only possible solution to this in the current scenario would be to sign-up with an aggregator platform that has already integrated the NDC content flow through a common platform developed by them. There are a few aggregator platforms well-established in the market today. These NDC-certified platforms offers a high level of NDC certification and will remain open to discuss various configurations.”

“This was a strategic decision for Al Rostamani Travels, as it aligns with our own internal technology development timelines,” said Jain.

“Even GDSs will be left with no choice but to adapt by integrating the various NDC content flow through their respective platforms. This further means some level of investment required from the travel agencies side, to integrate the same into their existing booking workflow.” 

“The price-parity agreement that Emirates recently signed with one GDS is going to open another fierce debate, as the other aggregators are going to either become uncompetitive and may possibly take the fight to Emirates for allowing the creation of an uneven-playing-field situation for the GDSs, who have been their most effective distribution partners for decades,” he added.

Jain is cautiously optimistic about the ‘rich-content’ flow to the travel trade which can be offered to customers, including ancillaries and personalization options.

“A travel agent is going to get a graphic interface and content flow, which will be on par with information display and look-and-feel of a website flow. However, this has to be taken with a pinch-of-salt for now, as the NDC content from all airlines are at different capability stages and uniformity in this regard will be crucial,” he concluded.

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