The airline ticketing process has traditionally used technology that creates inefficiencies. New Distribution Capability, better known as NDC, is supposed to change that. But what does it mean for Travel Managers?
The ways that airlines generate ticket prices and book flights across multiple channels has always been a bit of a black box. While airline ticketing may remain a mystery in the future, the underlying technology used to generate ticket prices and book flights across these different channels will soon change. You have something called “New Distribution Capability,” or NDC, to thank.
Below, get a brief history of airline ticketing processes, including a description of today’s inefficiencies, as well as a full rundown of what NDC is and how it will affect business travel and the role of Travel Managers.
The History of Airline Ticketing
Believe it or not, airlines today are using underlying technology implemented more than 50 years ago to manage ticket reservations. Back in the 1960s, airlines began using what was known as a Central Reservation System, or CRS, to support customer service representatives in searching for, booking, and confirming passenger flight. The airlines themselves were instrumental in the development of the CRS system.
Over time, the major CRS systems became independent of the airlines. At the same time, the landscape for booking flights changed dramatically. In the early days of the CRS, travel agents began asking for access to directly book flights. They were given a single CRS system to use collectively, and that remained the structure for many years.
Of course, as the internet became more readily available in the 1990s, online travel agents and booking platforms also needed access to a CRS. At that time, the industry transitioned to what’s called a Global Distribution System, or GDS, to support the changing demands and needs of the travel industry and the entities that supported customers in booking flights.
Needless to say these booking technologies with their foundations in the 1960s have not kept up with the changing needs of airlines, booking agents, and passengers in the 21st century.
That’s why NDC is being introduced.
New Distribution Capability, Explained
New Distribution Capability is simply a new data transmission standard rooted in XML and launched by the International Air Transportation Association (IATA). NDC was designed to completely change the way airlines present their products to customers.
But don’t be misled: NDC is not necessarily designed to make the lives of customers better, or to help companies that are sending their employees on business trips. While those may be byproducts of NDC’s launch, it was originally designed so that airlines could serve rich content to passengers searching for flights, helping airlines to provide customized offers and generally to differentiate themselves from the competition.
The launch of NDC, expected to take hold in 2021, will allow airlines to completely bypass the dated CRS and GDS systems that have been creating inefficiencies for decades.
Some Travelers like vendors using their data and information to customize experiences and offers. After all, customized experiences and offers are a natural byproduct of the omnichannel approach that the industry is moving toward. For these Travelers, the introduction of NDC will likely be welcomed.
But NDC will also give airlines more power to implement dynamic pricing, which does not always mean better pricing for passengers and for the companies footing the travel bill. Also, the implementation of NDC will be a big task for travel management companies (TMCs) that have integrated and long used GDS.
What Does This Mean for Travel Managers?
First and foremost, Travel Managers should ensure that their TMCs are prepared for the widespread implementation of NDC, so that companies can rely on uninterrupted booking services through their technology platforms. Also, assuming your TMC is actively thinking about NDC, consider partnering with them to better understand the implications at a management level and to help your Travelers best navigate booking through NDC.
It’s likely that most Travelers will be unaware of the changes in their own experience after NDC becomes the preferred system. But all Travel Managers should look for subtle changes in overall travel spend and other travel-related data so that they can identify and address any issues that emerge from this significant change in airline booking processes.
We’re Ready for NDC
The team at JTB Business Travel has been actively preparing for NDC for a long time. As the leading TMC, we are ready to assist, support and guide our clients through this transition in a way that benefits them and their travel programs.
If you would like support during the transition to NDC, or ongoing support for your travel program in general, we’re always here to help. Our team emphasizes a common-sense approach to business travel — so that you save money and your Travelers enjoy the best experiences possible.
Want to learn more about new business travel developments and innovations? Take advantage of our Return to Travel webinar series, where you can access round-table discussions and other helpful content.