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Air Canada’s complete content is now available via the New Distribution Capability (NDC) program at Sabre. In April 2024, Delta became the last of the three major US airlines to join the NDC movement. Air France-KLM imposes surcharges on legacy bookings if they are not enabled by NDC. Turkish Airlines is launching TKCONNECT, an NDC platform that will offer differentiated products and benefits with exclusive content and services to travel agents, starting October 1.
What is going on in the world of air travel? Why is almost every airline after NDC? What is New Distribution Capability, after all? With these and some other questions about this hottest topic in the distribution landscape, we approached our tech experts, Eugene Boiko, VP of Software Development, and Yana Brilevskaya, Business Analyst at GP Travel Hub, who eagerly agreed to give us a helping hand in this quest for knowledge. Fasten your seat belts and get ready for the takeoff!
New Distribution Capability saw the light of the day back in 2012 when the mastermind behind it all, the International Air Transport Association (IATA), first came forward with the idea of enabling airlines to take charge of their own sales and marketing strategy and find the perfect balance between customer satisfaction and revenue. Since that time, airlines have been gradually adopting a new data exchange standard.
The definition of NDC suggested by IATA reads that it is a “data exchange format based on offer and order management processes for airlines to create and distribute relevant offers to the customer regardless of the distribution channel.” In simple terms, New Distribution Capability, or NDC for short, can be defined as a communication standard based on XML that was designed to enable airlines to offer rich content and ancillary services directly to the participants of the travel industry — travel management companies (TMCs), online travel agencies (OTAs), or other flight resellers — via standardized APIs and metasearch engines. NDC is an API standard that allows airlines to build their own APIs and suggest them to GDSs or bypass GDSs entirely and connect directly to OTAs. This modern approach allows airlines to present info on third-party websites just as they do on their own.
It was developed and is actively being promoted by IATA to modernize legacy air travel distribution and enhance the capability of communications between airlines and third-party distributors.
Flights always resided in technically complex systems, long before broadband. Even before the Internet era, they were different from paper catalog systems when you physically browsed through available offers and called your agent to book. With time, Global Distribution Systems emerged and evolved as a response to the need to technically tackle the issue of booking flights in a centralized and faster manner. GDSs had a significant advantage, as these large and complex systems could automate many aspects of air flight retailing — from basic search&book to check-ins and boarding.
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However, though technically advanced, GDSs were rather slow in extending the possibility for airlines to diversify their marketing options. On the other hand, the margin airlines could place on air tickets was rather narrow, and much more revenue could be generated by selling ancillary services. Though airlines could market some of them via GDSs, it required a lot of efforts and was not as flexible as needed.
With the rise of the Internet era and digital technology, changing consumer expectations, and the need for richer content distribution, it became clear that traditional ways of distributing air services via GDSs are becoming more and more ineffective, with airlines being unable to upscale air offers by themselves. Airlines wanted to better differentiate their products beyond basic fare and schedule information, offering customers detailed information on ancillary services, seat selection, and more.
With the advances of low-cost carriers, not all of them wanted to join GDSs, as the latter stripped them of the possibility to offer rich products and sell ancillaries as they did via their own websites. Such carriers can adjust their offers (e.g., baggage dimensions) very quickly and very fast if they sell directly and thus respond swiftly to filling flights.
Airlines hosted in GDSs could not do such flexible measures. If you are not Lufthansa with its vast number of fleet careers and the ability to develop your own system to sell directly, a GDS would be your most natural choice if you want to sell your tickets efficiently.
So finally, airlines decided to establish an alliance and standardize a format that would be much more flexible and relevant to the modern context than non-standardized GDS APIs. IATA’s mission became to convert air ticket selling into some kind of Amazon, where air fare offers are supported by rich content, engaging visuals, and a wide range of ancillaries.
In 2012, IATA announced the onset of the NDC initiative which was to replace the older data transmission methods, such as EDIFACT (Electronic Data Interchange For Administration, Commerce, and Transport). In existence since the 1980s, EDIFACT proved effective at the times of expensive private networks with extremely low bandwidth. But against the background of the high-speed Internet, EDIFACT looks obsolete. It allows displaying the limited amount of information about airline services, and many ancillaries cannot be merchandised at all. Furthermore, it doesn’t allow conveying photos or detailed descriptions. Another con is outdated infrastructure and archaic underlying processes that run EDIFACT.
The key tech became XML. The idea to use it may seem outdated as the language emerged in 1998, yet it is the best fit for complex structures with a hierarchical form you need to transfer. It ensures more flexibility, faster implementation of new features, and richer content distribution (large texts, images, video, etc.).
“It would be wrong to classify NDC as a piece of software or a database. Neither can we call it an API. We may even say that NDC is a goal of its own, which has a vast supporter community of airlines and tech providers now who promote the mission of achieving NDC objectives.”
Currently, there are three distinct scenarios how ticket resellers can access airline NDC content:
Examples of GDSs: Amadeus, Travelport, Sabre
Perfect for: Large travel businesses with limited IT expertise and tight connections with a GDS.
Background of the scenario: NDC expands across the industry. Many parties of a traditional ecosystem start using it. GDSs have to adapt and promote the expansion.
What GDSs offer: NDC-enabled APIs, NDС integrations with several airlines.
Drawbacks: Low number of NDC integrations, partnering with GDSs entails multifaceted negotiations and substantial investments.
Examples of flight aggregators: AirGateway, Duffel, Travelfusion
Perfect for: Travel agencies with little time or insufficient resources to take care of multiple integrations on their own.
Background of the scenario: Flight aggregators are new to airline distribution in general. They take care of direct connections with carrier and GDSs and source NDC, GDS, and LCC (low-cost carriers) offerings.
What flight aggregators offer: Connection via a unified API or a prebuilt booking tool. Lower prices, more NDC connections, high speed of the integration process, commercial negotiations and custom tech development are more flexible.
Drawbacks: Lack out-of-the-box connectivity with mid- and back offices for TMCs.
Examples of airlines with own NDC: Lufthansa, Finnair, Kenya Airways
Perfect for: Large-sized OTAs and tech vendors willing to have a complete control over integrations and with an in-house IT department to develop and support them.
Background of the scenario: NDC made waves in the European landscape a few years ago. Recently, airlines from Australia, Italy, Latin America, the Middle East, Singapore, and the USA put forward their direct distribution strategies.
What airlines offer: Almost all top airlines have direct NDC APIs, with more middle-sized carriers joining the initiative.
Drawbacks: Need to develop multiple integrations (more time and initial investments), lack of common standards for APIs and NDC-related commercial models, lack of internal IT expertise with airlines causing tech issues, poor after-sales services.
If you opt for the direct connection with an airline, this may pose a problem since you have to create a new connection for each separate airline. In addition, not every airline offers such an option, as they are hosted in GDSs only.
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As you can see from the above material, travel tech providers do not do NDC implementation as such. Rather, they implement an individual NDC-based solution — Travelfusion’s NDC API, British Airway API version, etc. Basically, we serve as an intermediary between a travel agency and airlines who integrate directly with our solution. In addition, as NDC rules are rather new to this game, data received from airlines can be structured in different ways. That is why if you work with GP Solutions, you will only need one connection while the entire data unification process will be in our scope of responsibility.
We get in touch with a tech contact person who will be able to answer our questions on the said API and its specifications.
The process of introducing an NDC-based feature by GP Solutions normally looks like this:
As benefits apply to all parties involved in air travel — airlines, distributors, travel agencies, travelers — we won’t be covering them for each group of stakeholders but will instead look at a greater picture.
XML is great at sharing large volumes of content, which enables airlines to distribute their products bypassing GDSs. This way, carriers avoid paying extra fees, take back control of their products, and can merchandise more ancillaries.
Travel agents no only get a wider selection of more dynamic and varied content but also get them at better prices with fewer payments to other parties involved, which allows them to offer better deals and options to their clients. Distributors can get such flight content as product details, photos, promotional messages, seat maps with comprehensive pricing, and so on.
Apart from that, NDC connections open access to:
Selection of upgrades by British Airways available via NDC connection
NDC enables airlines to foster direct relationships with travel agents and customers by offering them better content directly, which can help build brand loyalty. Airlines can discontinue their agreements with GDSs and encourage passengers to buy directly from their websites.
Airlines will be able to understand the behavioral patterns in business and leisure travelers and create and distribute tailored offers based on customer preferences and past behaviors. This improves the likelihood of upselling and cross-selling additional services. Distributors such as GDSs, TMCs, and OTAs in their turn will be able to provide end users (travelers) with such personalized offers.
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The above ability to provide customized offers and detailed product descriptions helps enhance the customer booking experience, leading to increased satisfaction and potentially higher sales. Customers benefit from a more transparent shopping experience, where they can view detailed product features, compare different options, and make more informed decisions. NDC-powered connections enables ordinary customers to choose between seats, participate in loyalty programs or mile points, and apply different payments forms. For airlines, NDC makes it easier to create and market new services. Have a look at the services Finnair offers via NDC connections, which previously was close to impossible in the same scope via EDIFACT.
Service Catalog by Finnair
Detailed service description enabled by NDC
Many carriers still rely on legacy passenger service systems (PSS) with poor performance and other technical limitations, since providers of such systems are not quick on modernization. Engines that rely on NDC exist outside legacy infrastructure and enable its users to view information retrieved from PSS databases via airlines’ own interfaces.
Another issue here is EDIFACT. Though in service for over four decades, it lags behind the increasing needs of e-retailing. This pre-Internet protocol can transfer only basic information on flights and a very small number of ancillaries with EDI codes. It can cope with the rising number of passengers but requires time and more money to add new products, where XML-based communication will tackle this issue effortlessly.
“New is not always good, yet in this case air travel has long been in the need to shake things up. In general, processes underlying the operation of airlines are rather complicated and hard to upgrade. However, carriers welcome the NDC initiative and its potential to accelerate the journey towards general modernization and creativity in NDC alternatives.”
It’s inefficient if the aircraft takes off empty with few expensive tickets sold, just as it is unwise to sell off the entire cabin for the lowest price. With IATA’s New Distribution Capability, airlines get the chance to adjust prices based on the current market situation and passenger profile. They can do so to maximize profits and sell as many air tickets as possible for the maximum price as possible and will be able to take such price factors as season travelling, fuel prices, major events (World Cup, Olympics, festivals, etc.).
The XML-based standard facilitates smoother and more efficient data exchange, reducing the time and resources needed to manage bookings. It is easier to integrate with airlines that use NDC for all parties involved, as tech providers do not have to develop an API anew each time and can use almost the same code base (or with slight variations) or its blocks almost in an automated mode. Developers analyze the challenge in terms of what’s different and only work on what’s different or what’s been added.
NDC also brings standardization for supplier aggregators, since it decreases the time to add such a supplier to the platform. In addition, NDC-based APIs decrease the time for integration and for support for software developers, and, as a result, the final price for online travel agencies. It is always way easier when you have suppliers with 10 similar APIs than with 10 being totally unique.
Though NDC was initially introduced to strip airlines of the need to play by GDSs’ rules, the latter soon caught up to the NDC prospects and built their own NDC solutions. One by one, slowly, these industry mammoths both age- and size-wise are adding new NDC connections to deliver rich content from airlines.
Let us check how the three major GDSs have adopted the technology.
| GDS | Established | Main regions of operation | Market share |
 | 1964 (independent since 2000) | Americas | 36.6% |
 | 1987 | Europe, Middle East, Africa | 40.7% |
 | 2001 | North America, Europe, Middle East, Africa, Asia-Pasific | 22.6% |
Sabre delivered a retailing platform between an airline’s PSS (passenger service system) and the GDS itself. There, carriers can finally determine how much of the info can be displayed and get access to customer data. On the other side, travel agencies receive updates to the usual terminal that lets them access NDC-enabled content.
Amadeus’ solution is similar. If an airline is already using a PSS from Amadeus, NDC features come out of the box. If distributors want to offer NDC content, they need to use the Amadeus platform, which can be accessed via usual API channels.
Travelport was the first of the GDS giants to roll out its own NDC channel, and its case is a bit different. At the moment, you can access its NDC features via their JSON-based Air APIs that support traditional GDS offers as well. To use its NDC program, a carrier must be NDC-certified, basically designing their own NDC features as Lufthansa did. For aggregators, this capability is available via API.
Speaking of airlines. Lufthansa has been a leading proponent of the New Distribution Capability (NDC) and was one of the first to come up with its NDC solution and strategy. In 2015, Lufthansa introduced a Distribution Cost Charge (DCC) of 16 euros for bookings made through GDS, incentivizing travel agencies to use NDC-based channels instead.
The airline developed NDC-compliant APIs as part of its NDC strategy that allow third-party distributors, such as online travel agencies (OTAs) and travel management companies (TMCs), to integrate directly with Lufthansa’s systems without going through traditional GDSs. This API-centric approach provides faster access to Lufthansa’s full range of products and services, ensuring real-time availability and pricing.
Yet, this is one of the largest and most influential companies in the world. Most airlines cannot dictate their terms to OTAs and have to remain with GDSs.
Integrating New Distribution Capability for airlines and travel agencies has expanded the benefits of online connectivity but also exposed a few bottlenecks towards its global implementation.
The initial steps along the NDC journey require substantial investment in technology infrastructure, software development, and staff training. Airlines and travel agents need to upgrade or replace legacy systems, which can be costly. Do not forget about ongoing expenses to maintain and update the new systems, as well as to ensure compliance with evolving NDC standards.
The transition from older data formats like EDIFACT to the XML-based NDC standard involves complex technical work. This can be a challenge, especially for smaller airlines or agencies with limited IT resources. Even for giants like Amadeus, it has increased the load on their systems, as they have to process and transfer a lot of data with airlines creating more versatile offers. Bear in mind legacy systems which many stakeholders still actively use today and which can be really challenging to modernize.
All players have been investing for so long into the GDS infrastructure that their resistance is no surprise. GDS providers may see NDC as a threat to their established business models, as it allows airlines to bypass GDSs- and offer products directly to consumers and travel agents.
Resellers may lack the motivation to make this shift as well. Large TMCs as well as small and medium-sized TMCs are built around EDIFACT. In the traditional booking process, airlines paid money to GDSs for each booking made, while they shared their fees with travel agencies. NDC enables carriers to save GDS commissions, hence travel agencies do not get their share.
For some, it also poses a threat to fair competition. For instance, last April, after moving 40 percent of its shares from conventional booking channels to NDC-backed distribution systems, American Airlines were opposed by ASTA who alleged that AI had impacted serious harm on consumers and causes rising airfares and reduced competition. All of a sudden, many non-NDC agencies lost access to low fares of the air carrier.
While NDC aims to create a standardized data exchange format, variations in its implementation across airlines can lead to inconsistency and interoperability issues across different platforms and partners.
There are several versions of NDC that are actively used — from 17.2 released in 2017 to the latest 21.3 version, with a number of differences in the ways the data is presented in them. Check how the same call “Departure Airport, Departure Date & Time” may look in different versions where the tag titles and even the entire structure may vary.
Regardless of the version, the most important point is that NDC builds the ground for an API-centric approach: systems and apps involved in NDC workflows must communicate via API calls, allowing for rapid and efficient data interchange.
It is worth noting that NDC is not an obligation. There is no world government that can impose this communication standard on all airlines. NDC is used by airlines as a basis, which they extend according to their vision.
Currently, there are 77 airlines who joined the NDC program one way or another. Almost all top airlines have direct NDC APIs, with more middle-sized carriers joining the initiative. GDSs cannot avoid NDC and are destined to implement more airlines and deploy new capabilities, as we’ve showcased above.
In 2022, to facilitate these developments, IATA replaced its 4-level NDC certification with Airline Retailing Maturity (ARM) Index.
The ARM index assesses an industry player across three domains:
ARM unites NDC and additional licenses, so instead of several accreditations, you only need one. Apart from that, you can pick functionalities you need to certify and add only those your business really applies. This save, you will save time and money, since you won’t need to deliver and support features you are not going to use. Also, with the ARM index you will be able to see NDC capabilities a certified company delivers and pick the partner efficiently.
Airlines themselves are taking various measures to drive NDC adoption further:
Though met by a certain degree of skepticism and even the hope that the NDC wave will subside, it is not going away. More and more players in the travel industry are hopping on this journey, so the rest will have to join in sooner or later. Increasingly more companies who sell airline services use it, so tech providers have to adapt to this transformative reality. It is a battle between legacy, pre-Internet and modern API-centered technology.
“Hardly anyone thought that this format will be one and for all the companies. This is really hard to achieve considering legal, cultural, and regional differences between the regions and countries. This is more about an idealistic idea. It is good because it drifts away from the traditional way when GDSs determined the airlines’ policy to the marketing strategy. Now, airlines can push GDSs to introduce NDC, or they can leave them and sell via their own systems.”
“As it is a new phenomenon, it’s too early to say about the degree of its impact on the entire industry, but it is capable of delivering something new, of making travel mammoths invent new distribution channels and enabling airlines to create personalized offers. That is why, despite all its technical implementation challenges, this shift is destined to benefit the entire air travel industry.”
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