We’re a few days away from the largest corporate travel event of the year, the Global Business Travel Association’s 2023 Convention in Dallas. And while everyone’s looking to catch up and discover the latest innovations, there’s one topic that’s sure to dominate discussion: NDC.
Though IATA’s New Distribution Capability (NDC) initiative has been around for over a decade, NDC is grabbing the spotlight in 2023 thanks to some major airlines making a more decided shift to NDC (and bringing the industry along with them).
By talking to our own travel management partners and their customers, we know that there’s uncertainty and questions about NDC. A recent GBTA poll also showed that 81% of travel managers said they needed more education about NDC and airline distribution.
Fear not! We’re here to cover some of the most important NDC fundamentals right now and look forward to talking to you in more detail at the Zeno Experience Centre at GBTA.
The top 5 NDC questions we’ve been answering
1. Why do airlines want to move to NDC?
Modernizing airline distribution has always been the impetus for NDC. For the past couple of decades, the gulf between the consumer travel shopping experience and the corporate one has been widening. NDC is expected to balance that inconsistency by giving airlines greater content autonomy and flexibility to serve customers better.
There’s also a financial factor. Distribution is the third largest cost for airlines behind labor and fuel: traditional GDS EDIFACT channels are one of the costliest ways to acquire customers, airlines have significantly reduced their labor costs post-COVID and fuel is hard to control. Distribution represents a real opportunity for airlines to save money by shifting corporate customers to less expensive channels, which include NDC-connected channels.
The shift is underway. In April, American Airlines moved 40 percent of its fares out of traditional GDS channels and into NDC-connected channels, with more coming soon. United Airlines will remove basic economy fares (domestic U.S. and short-haul Latin America) from GDS EDIFACT in September. And Qantas will offer lower fares via its Qantas Distribution Platform from August 29, 2023.
2. How does NDC benefit the corporate traveler?
Simply put, NDC makes life much easier when it comes to booking travel. NDC lets airlines build dynamic and flexible offers that are personalized to the corporate or traveler.
Then travelers can select these personalized promotional fares and inclusions like premium seating, extra baggage and priority boarding, based on their airline loyalty status. And they can do it in one place, instead of buying the ticket on your travel management platform and then having to log in to the airline site to buy the extras. It’s a better traveler experience all around.
3. Does NDC help reduce corporate travel spending?
Yes - as airlines continue to remove their fares from standard distribution channels, NDC can help your travel program save money. NDC lets airlines offer dynamic and flexible pricing that can be personalized to the corporate or traveler. Additionally, NDC brings airline extras like priority seating and baggage directly into the booking process and your managed travel program, giving you more control:
- You can set policy around what can and can’t be purchased.
- Flights and ancillaries are booked in one place, giving you better visibility of the true cost of airline travel. When the average spend on airline ancillaries in Australia is around $50 per segment, this visibility is really important.
- This insight can help you negotiate customized fares or inclusions with airlines.
4. Servicing NDC bookings seems to be an industry challenge – what are Zeno’s NDC capabilities?
It’s true that offering NDC fares requires technology and workflow changes for travel management companies and travel buyers. Luckily, Zeno was built from the ground up to support NDC through any channel – airline direct or GDS.
Today, travelers can book and manage NDC fares in Zeno, through our integration with Travelfusion. Airlines include United Airlines, American Airlines, Qantas, British Airways and more. Serko has also partnered with United Airlines to bring United’s exclusive NDC bundles into Zeno.
Within Zeno’s conversational interface, travelers see the rich content they would typically see via an airline direct website. This detail includes information and images about everything in the fare, as well as ancillary offers, like extra legroom, baggage or preferred seating. If there’s preferred pricing for these ancillaries, Zeno will display it.
Travelers can also cancel reservations within Zeno and instantly obtain a refund back to their original payment method (when permitted). They don’t have to call their travel management company to make changes to their booking.
Importantly, NDC, GDS and direct connection fares can be booked in the same itinerary. After all, travelers don’t care what source their fare comes from, they just want the best option. Alongside this flexible flight selection, Zeno lets travelers include hotels, rental cars, and transfers into their itinerary – all within a single, streamlined search.
We’re going to continue growing our NDC integrations and supporting NDC bookings with seamless online to offline management.
5. What should I be doing today when it comes to NDC?
If NDC is very new to you, IATA has a host of resources on its website about the NDC basics.
It’s also important to talk to your travel management company, online booking tool and airline partners about what they’re doing to advance and support NDC.
Let your travelers know what’s going on as well. As more airlines move their fares to NDC, travelers are going to see different prices than they may be used to. Explain why that is and, if you’re ready, set policy around whether you’ll allow NDC fares, and what travelers are entitled to book.
To see Zeno’s NDC capability in action, and ask any more questions that we haven’t covered here, stop by Booth 3620 at GBTA or contact us.
