Is NDC Losing Momentum?

Cost and complexity are slowing the pace of the New Distribution Capability’s (NDC) advancement this year, impeding the travel industry’s movement towards a more modern era of booking airlines.

Earlier this month, Travel and Transport, one of the industry’s largest travel management companies (TMC), took an unusually public stance, saying the NDC pipelines that deliver airfares and airline content to agents and their corporate clients currently aren’t as efficient as traditional global distribution systems (GDS).

“2019 is the year of the plumbing for NDC,” said Kristen Pratt, executive director, corporate initiatives, for Travel and Transport, in Omaha, Nebraska. “We’re being realistic. The full functionality of the APIs (application programming interfaces, which are the computer code enabling NDC communications) isn’t there yet.”

Travel and Transport mostly handles corporate travel, but also serves high-end leisure travelers. Pratt said her company’s various obligations specific to corporate travel programs makes launching NDC across the company costly, and impacts agent productivity.

“If a client wants us to go and turn on NDC for the content they value, we will do it,” said Pratt. “But there are costs. Not just dollars, but in productivity, impacts to our servicing capability, like managing reporting and duty of care.”

NDC is a communications standard designed to give airlines greater flexibility marketing fare bundles and ancillary products like premium seating, checked baggage, and airport lounge access, through travel agents and travel management companies. The plan is that, ultimately, agents will have an experience more like a consumer has at an online travel agency (OTA), than with their traditional GDS.

The standard is being developed within the complex web of airlines and other suppliers, the major GDS networks, and the travel agency community, under the guidance of the International Air Transport Association (IATA).

At the end of 2018, many experts were forecasting that 2019 would be a year of significant gains that would lead to more NDC access for travel advisors.

“In general, it seems, this change is so significant that it's going to take longer than anyone has predicted,” said David Jonas, a journalist and co-founder at TheCompanyDime.com, a corporate travel publication that has reported extensively on NDC.

Matt Zito, a close observer of NDC and an investor in India-based Airlines Technology, which provides airline direct connects, called Travel and Transport’s decision “unfortunate.”

“The easiest thing for TMCs to do is wait for the GDS to deliver connections for them,” he said. “But not innovating could put you back three years against your competition.”

IATA declined to comment for this article.

Complexity and cost have always been a barrier
Agent concerns are not new. “There has been chatter for a number of years,” said Michael Kubasik, CTC, executive vice president and CIO, at Travel and Transport.

He described how agents are expected to provide travelers with the same instantaneous price and service comparison shopping consumers might experience at an OTA. “But not every airline is equal in delivering that content, and not all of them deliver it in a similar fashion.”

“We understand that the airlines want to be able to retail differently and monetize their offerings, but right now, an agent has to walk through each airline, separately, to compare, and that has an impact on transaction time and efficiency,” he said.

“Seat categories are different. WiFi costs are different. And depending on the corporation, some are saying those bundles aren’t covered under their corporate travel policy, so they don’t want us sharing those offerings to their employees,” said Kubasik.

Agent frustration came to a head at the American Society of Travel Advisor’s 2017 San Diego conference, during a closed-door lunch session.

During a press conference afterwards, Mark Meader, ASTA’s senior vice president of marketing, industry affairs and education, called the luncheon discussion “lively and insightful.” Off the record, some attendees described many agents as very irritated with the airlines and GDS.

“The greatest complexity is in the changes to the downstream processes within a TMC,” said Jonas. “Many critical TMC processes and functions are built around GDSs, and GDSs are built around a method for accessing fares and availability that the new NDC-based approach will replace. One bottleneck is that many TMCs have written small bits of code, scripts, that are customized to work with their GDSs and mid-office technology. Trying to replace all of that is reminiscent of the old ‘rebuilding the engine while driving’ analogy.”

Travel and Transport’s leisure client purchases more high-end packages and tours, “so they are less prone to plan travel themselves on the internet, and we expect less of an impact on them,” Kubasik said.

Recent NDC advancements
While Travel and Transport is focusing its attention on delivering content and pricing more through the GDS, NDC has been making some advancements this year.

In April, Sabre began testing NDC connections between United Airlines and TMCs like American Express Global Business Travel. (United is Sabre’s first airline to test the APIs.)

Just this month, United also began offering the same content that is available on United.com through TripActions, a corporate travel online booking platform. Meanwhile, American Airlines began offering bundled content to a handful of TMCs this month, and Zito announced that Airlines Technology will be up to 20 airline direct connects very soon.

NDC deployment has been swifter in Europe, where local carriers have been more determined to require that agents access full fares and inventory only through NDC channels.

For example, last fall, Travelport launched its travel agent SmartPoint platform with a group of large- and medium-sized TMCs, as well as more leisure-oriented companies, like Premier Holidays, an independent U.K. tour operator.

“We have seen various projects take steps forward this year,” Jonas said, but added that “it's hard to say whether the work everyone is doing on NDC will fulfill expectations for any particular timeframe.”

Experts at The Company Dime believe NDC will be more broadly deployed by 2020, “but it will remain an emerging rather than a primary connectivity method,” Jonas said.

Travel and Transport’s Pratt also remains a champion of NDC because “for the traveler, they want to know they are getting the most relevant content. For someone who sells travel, it allows us to access the same types of air bundles a client can find on the airline’s website. We don’t want to have to go out there and compare across different airline sites.”