Amadeus has highlighted the many challenges that IATA’s New Distribution technology standard still has to overcome.
In a report entitled NDC 2021 and the Path to Industrialization, the company says that while NDC has made significant progress in recent years, there will be a “multi-year period of transition” with both traditional and newer distribution channels working side-by-side.
Amadeus is calling 2021 the “year of scaling” for the technology standard with more travel retailers adopting NDC and airlines beginning to be able to differentiate themselves using the standard.
However, the report flags five remaining barriers to the technology achieving critical mass.
Not least of the hurdles is commercial terms with travel management companies needing to negotiate agreements with individual airlines as well as airlines with the global distribution systems.
Nicola Ping, manager of air content and distribution, Flight Centre Travel Group, says: “Headway has been made on the technical barriers, but the major blocker right now is the commercial alignment that is needed to move beyond simply talking about being technically ready. Reaching an agreement on NDC is a bilateral process with each airline, so it's now absorbing a lot of time and effort from stakeholders across the value chain.”
In a recent interview with Phocuswire, Ludo Verheggen, director of air content acceleration for Amadeus, said all parties would need to invest for the success of NDC with retailers needing to invest in changing the way they work.
A further challenge to the adoption of the standard is the different ways carriers are applying the technology which is causing further complexity.
The hope is that airlines will come together on a single interpretation of the technology later this year when a new version is released.
The Amadeus white paper also highlights system transformation within TMC booking and servicing technologies as well as readiness of airline systems which also need to “evolve.”
Mark Ridley, head of airline distribution solutions and NDC at Amadeus, says: “Airlines will need to be ready for this very new and competitive landscape, as they enter further into the retailing space. This means upgrading revenue management systems based on historical yields and bookings to new offer management systems based on customer centricity and dynamic pricing.
"Old PNRs and tickets will give way to comprehensive orders; it’s an exciting future but it requires investment on the part of airlines.”
Finally, cultural change is a barrier to the further adoption of the standard and the technology being developed around it.
The industry is beginning to talk more widely about retailing rather than bookings but education and a change in mindset are required according to the report.
Nathan Smeulders, senior manager for distribution at Qantas, says: “We spend a lot of time educating our sales teams and people in the business about how NDC works and what it does. Some agencies have an amazing understanding of NDC, but others we find are still really trying to get their heads around it.
"Over time they’ll learn more, but it’s vital that we continue to provide a constant flow of information and knowledge to help educate everyone in the travel ecosystem.”
* The white paper, which also looks at progress with NDC so far, can be downloaded here.