NDC has seen some progress over the last year, with major airlines (US-based most notably) removing their best fares from legacy EDIFACT channels to favor their direct distribution.
Travel buyers are more and more pressured by their airlines partners to shift to NDC without really grasping what’s in it for them or getting the most transparent information from their travel partners (TMC, OBT,..). After spending some time and energy building interconnected travel ecosystems within their companies, why would they jeopardize deteriorating the travel experience for something they didn’t even choose ?
Launching a pilot might be a good opportunity to assess the benefits for the company while limiting the risks. However, it requires some methodology and must involve all the key stakeholders of the process. How to move forward? What are the best practices
1 : Defining the scope
Some studies have been conducted – although results are rather obvious. First, it seems that NDC fares are cheaper on routes with high competition. Second, strategies around NDC vary a lot among airlines. Some are very aggressive and remove numerous fares from legacy systems while others adopt more a dual-channel approach. Companies should analyze their traffic and dependency to certain airlines and cross-reference. Only then they will be able to identify where and which airlines it makes more sense to switch NDC on with.
2 : Understanding the impacts on traveler experience
This is basically collecting exhaustive information from suppliers. Will NDC fares be flagged as such in the online booking tool? Which source of content will be used? Are cancellations and modifications managed the same way than GDS fares? Will the fares be accessible on mobile? What about offline bookings? There shouldn’t be any room for interpretation, every aspect must be scrutinized to adapt the communication and change management strategy. Poor or partial investigation might lead to increasing leakage, which is the main risk here. Close discussion with the TMC, OBT and airlines is necessary.
3 : Understanding the impacts on travel management
Since better fares and continuous pricing is the top 1 motivation for shifting to NDC, travel managers must be able to measure savings. Will NDC fares be flagged in the reporting? Some preparatory work must be done with the travel agency to make sure all the necessary information are collected for close monitoring.
Payment and invoicing must also be looked at. Can my lodge card be used for NDC fares as well? Who will issue the invoice? Usually, the more direct the channel is, the more risks there are to have payment and invoicing challenges.
Travel security is another aspect that shouldn’t be overlooked. If PNRs are created for NDC bookings, there’s little risk of not capturing the bookings since tracking systems are fed by GDS.
Last but not least, the pricing model. Travel managers must understand if and how much they are going to pay for NDC fares. Will there be surcharges applied by the TMC?
As a conclusion, always think ahead. Moving forward, airlines will offer more and more fare packages, which raises serious questions about the travel policy. How is it possible to harmonize rules and policies while NDC is all about customization? Continuous discussions and monitoring is essential to better anticipate and adapt the strategy and communication.