Monday, June 24, 2024

Amadeus report highlights growth and hurdles in the way of NDC adoption

NDC adoptions are growing and the technology is proving to be an essential tool for travel retailing as airlines are keen to become better retailers and engage with their customers’ needs. The launch of NDC provided the travel industry a chance to catch up with other digital retailers and to rebuild travel according to the changing needs of all guests. In the last 18 months, despite a pandemic, momentum around NDC did not stall but the vision to focus more on traveler needs and simplify processes has driven much progress.

But there are challenges to overcome to make this a bigger success and Amadeus has highlighted some of these challenges in a report entitled NDC 2021 and the Path to Industrialization. The company says that while NDC has made significant progress, there will be a “multi-year period of transition”, that will see both traditional and newer distribution channels working side-by-side.

Calling 2021 the “year of scaling” for the technology standard with more travel retailers adopting NDC and airlines beginning to be able to differentiate themselves using the standard.

Airlines are already beginning to innovate with fare bundles and new pricing strategies and travel sellers and technology providers are going Live with NDC content and with technology advancing to makes it possible for travel sellers and buyers to consume NDC and EDIFACT content, alongside LCC content delivered via APIs, the vision of enhanced travel retailing has become stronger.

According to Yanik Hoyles, Director Distribution at IATA explains, “NDC has seen significant momentum despite the crisis NDC is accelerating rapidly.  Even during 2020, airlines asked IATA not to slow down on NDC because it has become a key strategic capability and will support recovery. We’ve seen NDC certifications rise by 23 per cent in the past 18 months as evermore players commit to the new modern standard. The big technology  partners have made it clear NDC is a strategic priority and that’s critical to the on-going success of the initiative. Going forward, airline retailing enabled by NDC will be a key contributor to airline profitability.”

However, the report states that there are some barriers to the technology that prevents it from achieving critical mass.

Among those are, better Standardization in the different ways carriers are applying the technology which is causing further complexity; Back-office System Transformation which needs to verify accuracy of data until the introduction of IATA’s ONE Order standard; Commercial Alignment of acceptable conditions between airlines and technology partners; Preparing the airline systems to move to an ‘offer and order’ capability that allows for creation of flexible and customized offers and the ongoing Culture Change that NDC is more than a technical or commercial change but requires a total industry mindset and cultural shift.

Mark Ridley, head of airline distribution solutions and NDC at Amadeus, says: “Airlines will need to be ready for this very new and competitive landscape, as they enter further into the retailing space. This means upgrading revenue management systems based on historical yields and bookings to new offer management systems based on customer centricity and dynamic pricing.

“Old PNRs and tickets will give way to comprehensive orders; it’s an exciting future but it requires investment on the part of airlines.”

The industry is beginning to talk more widely about retailing rather than bookings but education and a change in mindset are required according to the report.

Nathan Smeulders, senior manager for distribution at Qantas, says: “We spend a lot of time educating our sales teams and people in the business about how NDC works and what it does. Some agencies have an amazing understanding of NDC, but others we find are still really trying to get their heads around it.

“Over time they’ll learn more, but it’s vital that we continue to provide a constant flow of information and knowledge to help educate everyone in the travel ecosystem.”

The report also highlighted that through greater collaboration, it will be easier to recognize challenges and interests, helping to align goals and deliver the end-to-end value the entire ecosystem expects. Experimentation and testing are also necessary for the industry to better understand how NDC technology can improve digital retailing and the overall travel experience as a whole.

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