Despite facing substantial financial constraints, airlines
and travel agencies have mostly pushed forward with New Distribution Capability
(NDC) adoption programs during the Covid-19 crisis, industry insiders say.
Meanwhile, NDC backers and other industry players argue that
the variety of challenges that the crisis has wrought on the airline industry
have bolstered the case for aggressive deployment of IATA’s XML-based
“One of the already partly fulfilled promises of the NDC
standard is that it enables airlines to deliver new kinds of content and
packages to travelers,” Mark Ridley, head of distribution solutions for
Amadeus, wrote in a recent blog. “This is a strength which will become even
more valuable in the future. Now is the time for the travel industry to ask
what these unique and personalized offers can look like and how they can help
passengers feel safe.”
Ridley also said that efficient communication, another NDC
strength, is key during times of uncertainty.
“Imagine being able to share instant alerts with rich
content, including photos and videos, showing the latest information to
passengers, such as when the plane was last cleaned,” he wrote.
Amadeus, whose NDC(X) initiative is at the vanguard of NDC
programs among the major GDSs, isn’t alone in making such a case.
“The point is that NDC gives airlines flexibility to
innovate,” said Paul Byrne, vice president of business development for the NDC
platform developer OpenJaw. “Now is the time to invest for airlines that have
the ability, have the liquidity.”
In a recent report for OpenJaw on NDC in the post-Covid-19
world, Byrne argued that deployment of the digital distribution standard offers
airlines the twin promises of increasing revenues and reducing costs,
objectives that are especially urgent during challenging times.
The revenue case is driven by the main promise of
digitization -- namely that it can enable airlines to sell
their full suite of ancillary and bundled products across third-party channels.
Further, wrote Byrne, NDC adoption enhances the ability of airlines to offer
personalized products and fares generated dynamically at the time of a fare
query. Doing so can increase conversion and price points.
On the cost side, airlines can reduce distribution fees by
moving sales toward non-GDS, NDC-enabled channels, such as direct connects and
Amid the Covid-19 crisis, Lufthansa and Sabre have announced
that they will end their distribution agreement on June 30, and Norm Rose, a
senior analyst for Phocuswright, said he believes the breakup is a sign of
things to come. Lufthansa has been an airline industry leader when it comes to
pushing its distribution model toward more use of NDC-enabled direct channels.
“I see a major trend toward NDC adoption and to some level
of GDS bypass,” said Rose, who added that previous crises in the travel
industry have led to major transformations.
Constrained by liquidity concerns, however, airlines and
travel agencies have not, for the most part, sped up NDC initiatives during the
Covid-19 crisis, industry participants say.
Moshe Rafiah, founder of Travelfusion, an aggregator of NDC
direct connections that is currently live with 44 airlines and approximately
800 travel agencies, said that new implementations have slowed. But he said
that the 10 airlines Travelfusion had in the pipeline ahead of the pandemic
have proceeded with their projects.
“It means the airlines did not shut down the business,”
Rafiah said. “They are looking forward to the recovery steps.”
Steve Domin, CEO of the NDC aggregator Duffel, which is live
with 20 airlines, said that while Qantas has announced that it is putting NDC
plans on hold, other carriers have quickened their programs since the crisis
hit. Duffel, he said, went live with United during the pandemic, and it has
signed three new airlines, as well.
He added that Duffel’s frequency of conversations with
travel agencies has also increased.
Similarly, Neil Guerin, director of distribution strategy
for American Airlines, said that during the pandemic, several agencies have come
to them for the first time to discuss doing an NDC-enabled direct connect.
Overall, he said, American has made quick NDC implementation
progress with a couple of agencies, while work with other agencies has slowed
or been paused.
As far as its own NDC initiatives, Guerin said that American
has slowed implementation slightly, but hasn’t altered its goals.
“We still see NDC as critical to the future of our business
as far as enabling customers to engage with us,” Guerin said.