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Draft:New Distribution Capability

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NDC (New Distribution Capability) is an airline industry-supported program, launched by the International Air Transport Association (IATA), aimed at developing and implementing a new data transmission standard for airline distribution. It uses extensible markup language (XML) schemas to enhance the way airlines sell their products, enabling them to deliver more personalized and dynamic offers to travel agents and consumers.[1]

Overview

Most airline tickets have traditionally been distributed through Global Distribution Systems (GDSs) that rely on the older Electronic Data Interchange for Administration, Commerce, and Transport (EDIFACT) messaging standard. These legacy systems can limit the display of ancillary products and personalized fare bundles. By contrast, NDC uses XML to allow airlines to communicate their fare and product information more dynamically, offering features such as:

  • A broader range of ancillary products (e.g. seat selection, baggage options, or upgrades)
  • Customized, personalized offers based on passenger preferences and loyalty data
  • Real-time access to airline inventory and promotions

History

  • 2012: IATA introduced the NDC initiative, identifying the need to modernize the existing airline distribution infrastructure.[1]
  • 2014: Early pilot programs tested initial XML schemas in controlled environments to demonstrate feasibility.
  • 2015–2016: More airlines and travel technology providers participated in proof-of-concept trials, creating direct and indirect distribution use cases.
  • 2017: IATA released updated NDC schemas and guidelines, standardizing early deployments.[2]
  • 2018 onward: Major airlines such as Lufthansa, British Airways, and American Airlines began incorporating NDC into their distribution strategies, accelerating adoption.

Objectives

  1. Modernize Airline Retailing: NDC promotes consistency across direct and indirect sales channels, allowing airlines to showcase unified product offerings and fare bundles.
  2. Improve Communication and Collaboration: By adopting open XML standards, airlines, GDSs, and technology providers can exchange information more efficiently, fostering innovation.
  3. Enable Personalization: NDC supports the use of traveler data (e.g., frequent flyer status, preferences) to tailor offers and fare bundles.
  4. Increase Competition and Innovation: Standardized schemas encourage new entrants (e.g., travel tech start-ups) to develop applications for shopping, booking, and servicing.

Adoption and Implementation

Airline Adoption

A growing number of global airlines have embraced NDC to differentiate themselves with richer product offerings. Early adopters typically run NDC alongside legacy systems, gradually increasing the share of NDC-based distribution.

Travel Agencies and GDS Integration

While some travel agencies and online travel agencies (OTAs) may connect directly to airline NDC application programming interfaces (APIs), traditional GDSs have also integrated NDC content within their platforms. This approach allows travel agents to view both legacy (EDIFACT) and NDC-based content in a single workflow.

Certification and Levels

IATA manages an NDC Certification Program that categorizes participants—airlines, aggregators, and IT providers—by their level of capability (Level 1, 2, or 3).[3] These levels indicate maturity in handling various features such as offer management, booking, and post-sales servicing.

Criticisms and Challenges

  • Implementation Costs: Transitioning from legacy systems to NDC-compliant platforms requires significant investment in IT infrastructure and employee training.
  • Complexity in Transition: Running parallel EDIFACT- and NDC-based systems can add complexity for airlines, travel agencies, and GDS providers.
  • Concerns Over Fair Competition: Some critics argue that well-funded airlines and agencies with direct connections might gain a competitive edge over smaller players.
  • Standardization Issues: Although NDC is an industry standard, varying implementations by different airlines can result in inconsistent user experiences and fragmented content.

See also

References

  1. ^ a b "New Distribution Capability (NDC)". IATA. Retrieved 5 January 2025.
  2. ^ "IATA NDC Schemas". IATA. Retrieved 5 January 2025.
  3. ^ "NDC Certification Program". IATA. Retrieved 5 January 2025.



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