New Distribution Capability (NDC) is the air transport industry’s latest standard for transmitting data between airlines, travel agents, and other distribution channels. Many view it as a necessary evolution of the industry, but for those in the travel sector, its impact is felt beyond financials alone. Let’s take a closer look at the impact of New Distribution Capability on the travel industry.
Firstly, NDC enables airlines to offer a range of services and products in a more personalized way- services that can be accessed directly through approved third-party software applications. NDC has enabled more control over the distribution of content across various channels, which was very difficult in the past as airlines were almost wholly reliant on the global distribution systems (GDSs).
Secondly, NDC can offer more personalization in marketing messages and product offerings to customers, resulting in increased customer loyalty. These NDC-driven benefits may include personalized merchandising, access to third-party services (such as seat reservations or extra baggage fees), and targeted advertising based on a plethora of data points, like the historical customer interactions and preferences.
The travel industry provided that NDC provides an opportunity for airlines to build deeper relationships with their customers. For example, if a particular traveler had paid extra for legroom seats in the past, the airline might target them with merchandising on their next trip, such as lounge access or an upgrade to first-class seating. This strengthens customer satisfaction, and customer loyalty. Customer loyalty, which could be a significant gain for the airline, can also lead to repeat business in the long run.
Thirdly, NDC empowers airlines to interact directly with customers after a purchase has been made. NDC solutions provide a direct line to the traveler during the booking process, allowing airlines to offer assistance with further upsells, such as lounge access or extra baggage fees. This is not only an added benefit for customers but also provides additional revenue streams for airlines.
Finally, this new standard ensures an enhanced, user-friendly process for all involved parties and airlines. For the airline, there is greater control over their distribution, a more efficient system to communicate with customers, and more revenue streams thanks to a more personalized merchandising approach. For the customer, there are targeted offers and assistance from the airline through the process.
In conclusion, with personalized merchandising, deeper customer relationships, and a personalized approach to marketing, the impact of New Distribution Capability on the travel industry is clear. Although there have been concerns raised about the impact of technology on the travel industry and travel agents, the smart and customer-friendly airways are gaining from offering direct services to their customers.
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