<p><img class="alignnone size-medium wp-image-61" src="https://www.theroadsitravel.com/wp-content/uploads/2017/06/Visual-IATA-NDC-300x158.jpeg" alt="" width="300" height="158" /></p>
<p><a href="https://www.theroadsitravel.com/wp-content/uploads/2017/06/2017.05.26-NDC-BA-Trade-Comms.pdf">2017.05.26 NDC BA Trade Comms</a></p>
<p><a href="http://ndcbiztravel.iata.org/">Link to IATA&#8217;s NDC page</a></p>
<p>A little over a week ago, I received the above letter at work from IAG (International Airlines Group &#8211; the holding over a.o. British Airways and Iberia) on a new charge of 8 € per fare segment that will be made as from November for all bookings &#8220;not made using an NDC based connection, or through other low-cost channels, such as our websites, airline sales offices and callcentres&#8221;. I received this as the contract holder for our Corporate contract.</p>
<p>NDC stands for New Distribution Capability which is XML based enables airlines to offer you richer content (read upsell your experience) and more options. NDC will allow to offer options such as specific seat choices, meal choices, and more.</p>
<p>There are two questions to think about:</p>
<p><strong>Question 1</strong>: why is not going through NDC increasing the booking cost?</p>
<p>There is more than one answer to this question</p>
<ul>
<li>Airlines have made massive investments in NDC as a way to upsell your travel experience (see below in &#8220;will it make my travel experience better&#8221;). So they want to use this technology</li>
<li>If they can move you away from the GDS (Global Distribution Systems &#8211; used by agencies to book airlines) where you can compare between airlines, they would rather do so. They can also market better. Compare it to hotels offering &#8216;internet only&#8217; rates. Companies typically do not like this since they expect their travelers to take the best offer regardless of extra&#8217;s &#8220;offered&#8221; by the airline.</li>
</ul>
<p>So in order to ensure you use NDC, they are increasing the cost of booking outside an NDC channel. Typically an airline will argue that GDS is too expensive and possibly that is partly right but that is really not the main reason.</p>
<p>This is also where it gets quite complicated: not booking through a GDS (but instead use a website for instance) will not affect the leisure traveler nearly as much as it will impact the Corporate Travel.</p>
<p>The Corporate Traveler must typically follow reservations with the Company&#8217;s assigned Travel Management Company (TMC in short) in order to comply with the Travel Policy of said Company. The reason for this are (1) Duty of Care of the Company towards its travelers. This means knowing its travelers&#8217; whereabouts at any given time. (2) Full integration in the back office &#8211; the Company receives the invoices from one source (TMC).</p>
<p>So offering NDC at the front affects the transactions downstream where information is gathered to ensure Duty Of Care and Accounting integration since not all TMC&#8217;s have gone through the implementation of NDC yet, nor have the GDS&#8217;.</p>
<p>That is mainly because airlines are not developping NDC according to one standard so far as they want offer different content from their competitors.</p>
<p>Clearly some airlines (Lufthansa group, IAG,&#8230;) find that NDC takes too long to take off so they have taken these steps of charging extra but at the same time, they are not really offering any valid alternatives to bridge the (Corporate) gap.</p>
<p>Why are airlines focusing on this? From my understanding they hope to break the vicious circle that has been developping for years where they reduce the price to win customers but also offer less service. In turn the customer is expecting even lower prices. If NDC can be used to sell the amenities to the traveler willing to pay for it, they will be able win customer loyalty, while making extra money.</p>
<p><strong>Question 2</strong>: will it make my travel experience better?</p>
<p>It should.</p>
<p>The idea is that it will offer more choices to the travelers. Will it be flawless? Certainly not at the beginning. I would compare it to the cellphone development &#8211; when it started, reception was spotty to say the least, and the experience was not the same in every country, on every phone and for everyone who made a call. Let&#8217;s not forget that after all these years, traveling on several airlines can still get your luggage lost. So booking extra services through connected platforms is not something I would trust at the start. But it will be a constant evolution and has real potential.</p>
<p>As a customer however, I am not sure that this will be fully realized. On one hand I like the fact that I will gain more choices. On the other hand, flawless execution and excellent customer service will impress me more than being offered the option to pay extra for something I would like. Will I be a happier customer if I am enabled to pay extra (&#8230;) for a specific seat? British Airways and Iberia are already pusing the line by charging extra for booking your seat in Business Class (yes in Business Class) when you book certain promotional Business Class fares (you can use the seat assigned to you or change it at check-in). If that is what NDC is being used for, it will not make happier customers, in my opinion.</p>
<p>On the other hand, if you use NDC to book your preferred meal upfront, being able to easily book extra luggage, or extra legroom, that would definitely be appreciated. You see that already happening now (without NDC) where premium economy is booming business offering extra legroom, upgraded meals etc.</p>
<p>The challenge for Companies will be to include some guidelines in their Travel Policy to avoid everyone ordering a 100 € caviar meal on a 200 € ticket (to give an extreme example).</p>
<p>So to answer the title question &#8211; will this make my travel experience better? It has the potential to do so but let&#8217;s see what the airlines will really deliver to make it better.</p>