Airlines are increasingly adopting the New Distribution Capability (NDC) technology, promising a revolution in how flights are sold. But Travelport claims it might be a strategic move to boost direct sales.
NDC is presented as a tool for personalisation and efficiency. However, Travelport’s findings indicate a shift in control to airlines, away from third parties like travel agents. This raises questions about its true purpose.
Understanding NDC: A New Era of Distribution
The New Distribution Capability (NDC) is hailed as a groundbreaking step for the aviation industry. Developed by IATA, its aim is to provide personalised services and dynamic pricing. However, Travelport’s report suggests there’s more than meets the eye, dubbing it a ‘Trojan Horse’ for direct sales. While airlines promote NDC as a means of enhancing customer experience, it appears the underlying intent is to divert sales away from traditional intermediaries.
The Complexity of Airline Offerings
A staggering increase in airline offerings has been observed, from 500 products in 2010 to over 10,000 by 2024. Customers now face an overwhelming number of options. Travelport highlights that this complexity is counterproductive, making the booking process more tedious instead of facilitating seamless transactions.
As many as 56% of surveyed travellers found airline products to be increasingly complex and difficult to understand. With attributes such as fares, bundles, and brands multiplying, more than half of the travellers feel overwhelmed when trying to navigate their options. This complexity might be intentional, designed to nudge consumers towards direct channels.
Challenges in Personalisation and Transparency
Despite promises of personalisation, many consumers feel let down by NDC.
According to Travelport, the consumer’s ability to personalise experiences remains unfulfilled, with 42% expressing dissatisfaction over the lack of customised offers. The anticipated transparency is yet to materialise. Instead, hidden fees and restricted information continue to plague the booking experience, with two-thirds of travellers identifying these as significant issues.
Over 80% of respondents described the fare comparison process as overly time-consuming. This inefficiency further erodes confidence, with 71% often doubting whether they secured the best deal. Thus, the purported benefits of NDC in terms of personalisation and transparency remain largely theoretical.
The Promise of an Agnostic Marketplace
Travelport’s revelations highlight a strategic shift. Through NDC, airlines are directing consumers away from Global Distribution Systems (GDS) and online travel agents (OTAs).
This shift threatens to undermine the role of travel intermediaries, who are left grappling with duplicated content and the necessity of using multiple systems to compare products. The traditional ecosystem of travel sales, which relied heavily on agents, is thus facing unprecedented challenges.
Agents are increasingly vocal about their concerns, asserting that the success of travel sales depends on a balanced marketplace. Without it, the consumers’ experience could suffer significant setbacks.
Diverse Implementations of NDC
NDC is not a one-size-fits-all solution. Its implementation varies significantly across airlines, each choosing different strategies.
Travelport argues for an agnostic marketplace that could unify these diverse approaches, providing a standardised platform for comparison and choice. However, without consensus on how NDC should be applied, such an ecosystem remains a distant goal.
The need for an unbiased environment is pressing. As airlines focus on their interests, the travel industry must work together to maintain a fair playing field, benefiting all stakeholders involved.
Future Implications for Digital Shopping
Travelport’s findings suggest that the digital shopping experience in air travel is becoming more cumbersome.
The disparity in NDC implementations means the customer’s journey is fraught with inconsistent information and choices. As customers struggle to navigate these waters, airlines might see a short-term gain. However, if the frustrations continue, it could lead to long-term damage to customer trust.
This demanding landscape requires airlines and technology companies to explore innovations that streamline processes while preserving transparency and choice.
As airlines continue to push NDC technology, the implications for consumers and the travel industry are profound. While the goal is ostensibly to enhance personalisation, the prevailing complexity paints a different picture.
