In our webinar, NDC Comes to America, held January 31st, 2023, T2RL CEO and former Vice President of Sales & Distribution Strategy at American Airlines Cory Garner, along with AmTrav’s own Elliott McNamee, discussed the immediate future of NDC in America.
If you’re in the travel industry, you’ve heard of NDC somewhere or another. You know, for the last 10 years or so. Now, in April 2023, we might just see American Airlines roll out the technology at long last, keeping 40% of their fares for NDC content only.
But what are the implications for buyers? And what can travel managers do in the short term to prepare for an NDC-enabled future? We covered that for you, so you don’t have to concern yourself with pesky details. Here are the webinar highlights. Or, you can watch the whole thing here.
What is NDC?
Firstly, for the uninitiated, NDC stands for New Distribution Capability, and it is a technology protocol developed by airlines to distribute fares, offers, and other products directly over the internet. NDC is a big upgrade over the current 50+ year-old technology that’s used, providing airlines with more control over how they sell their fares and allowing them to offer personalized and dynamic pricing like they do on their own websites. For example, an airline might be able to offer discounts on certain routes during peak times or customize offers based on customer preferences or loyalty status. In addition, airlines will be able to use rich content—like images, videos, and interactive features—to enhance the customer experience during flight booking and check-in processes.
Why is American Airlines Implementing NDC?
AA is implementing NDC because they want more control over how they distribute their fares and services. By using NDC technology, they can provide customers with more personalized offers that better meet their needs. Additionally, this new technology will enable AA to reduce costs associated with distribution platforms like GDSs (Global Distribution Systems). By utilizing richer content through NDC channels rather than traditional ones like GDSs or OBTs (Online Booking Tools), AA will be able to increase engagement with customers throughout their entire journey—from booking flights to post-travel follow-up surveys.
While NDC has been a long time coming, American’s move to remove 40% of fares from legacy channels and keep them in NDC channels is a big push to modernize how American’s flights and fares are sold and serviced.
What Does This Mean for Buyers?
Cory explained on the webinar: “The good news is that there could be almost no change for buyers, the bad news is all the other scenarios are probably a lot of change – and there's just not a lot in between.”
Possible no-change scenarios include American backing down from the threat of removing 40% of fares from legacy GDSs, or the tech ecosystem of American, the GDSs, OBTs like Concur, and GDS-dependent travel management companies (TMCs) all being ready for the content switch to NDC on April 1. American et al. would say they’ll all be ready, but Cory pointed out that others are skeptical.
So what happens if American does move forward but others – like Concur – aren’t ready? “Practically speaking,” says Cory, “there will be higher fares from American through corporate TMCs and OBTs” – higher than available on AA.com, Expedia, and Google Flights, and travelers will notice.
One caveat: another set of corporate customers won’t see any change on April 1. Customers of NDC-connected TMCs like AmTrav will have access to all of American’s publicly-available fares, with full policy control, data visibility, and servicing as they do today, thanks to those already-active NDC connections.
In The Short Term - What Can Travel Managers Do?
For travel managers looking at what lies ahead in terms of dealing with NDC-enabled transactions, there are some immediate steps they can take in case legacy systems such as GDSs or OBTs aren’t ready on April 1: Travel managers should ask their TMCs and OBTs about their plans for implementing NDC capabilities into their systems; specifically their OBT (like Concur) and the TMC’s agent software from the GDS. Additionally, Concur has offered up Select Access and Triplink as solutions to access American’s lowest fares; Travel Managers should ask their TMCs if the TMC can support policy control, spending and safety data collection and agent servicing for those two options, and at what cost.
Alternately, as travelers start saying, “hey, I found a lower fare on AA.com,” Travel Managers can let those travelers book on AA.com in order to save money, with the understanding that they’ll need to manually audit for policy compliance, manually collect the spend and itinerary data outside the program, and not receive TMC service for changes and emergencies.
Longer term, Travel Managers need to assess whether they have the technology & supplier relationships they need to meet their travel program goals. American NDC is just the start, as Cory pointed out, United is also experimenting with NDC connections and dynamic pricing, and American’s own efforts will expand. If the legacy technology and service providers (GDSs, OBTs ,and TMCs) can’t keep pace with airline changes today, will they keep up with the next round of changes tomorrow? The costs of their outdated tech – in higher fares and worse service – are becoming clearer.
The introduction of IATA’s New Distribution Capability promises great opportunities for both travelers looking for better deals on airfare/ancillary services as well as Airlines which will now have greater control over how they distribute & market said services directly over the internet; however, in order fully benefit from this new technological advancement, Travel Managers need to make sure that TMC's & OBTS under their watch are updating & preparing themselves accordingly. Ultimately, it could take some time until the full transition is complete, and we can expect plenty of humps and bumps, but due diligence has been the lifesaver of many a company. Do yours.
Oh, and in case it wasn’t super clear when NDC does drop, AmTrav customers won’t notice a single change. That’s the reward of innovation.
We've been preparing for NDC for 30 years. Is your travel program ready? We can help. Schedule time with our experts today