The role of NDC and next-generation interlining in airlines’ recovery

It's been said that nuclear fusion will be a revolutionary technology, but the revolution is at least 20 years away. The problem with the statement is that it's been "20 years away" for the last 50 years - or more.

New Distribution Capability (NDC) arguably suffers from the same affliction. It has the potential to disrupt, if not revolutionize, current distribution practices and improve airlines revenue generation capabilities.

Yet, it's been painfully slow to take off, even before the global pandemic turned the airline industry into a survival exercise. A while ago, I asked an airline CEO, "Are you keeping your head above water?" His one-word reply: "Nostrils." 

Where month-to-month or even week-to week-survival is the name of the game, airlines have neither the bandwidth nor the inclination to consider "jam-tomorrow" IT projects, especially projects requiring considerable IT resources when those IT resources are likely to already be furloughed or recently unemployed.

So what's changed? We are starting to see faint signs of light at the end of the pandemic tunnel. Yes, the virus is still wreaking havoc across much of the world and will likely do so for months or, in some cases, years to come.

Vaccination rollout is progressing unevenly but with increasing speed across most developed countries, though how long it will take to provide equivalent protection in the developing world remains unclear.

Airlines are beginning to think about what comes next. Domestic traffic in many countries is recovering well, and intra-regional flying is starting to pick up. Even if a broad long-haul recovery is still some time away, airline commercial management is daring to think past tomorrow.

Fewer routes but more partnership opportunities

The day after tomorrow is likely to look quite different to yesterday. There have been airline failures, and there will be more. Many network carriers have scaled back their operations; for some, that has meant cutting thinner long-haul routes, and for others, reducing their hub feed.

Meanwhile, the more robust low-cost carriers (LCCs) stand to gain more market share as their predominantly short-haul networks will be among the first to benefit from any recovery. The network carriers witnessing their partnership and interline opportunities narrow are thinking hard about generating more feed traffic and maximizing revenues once they return to the skies. What potential partners might there be? 

Well, there are certainly LCCs, but how can LCCs and network carriers work together?

As millions of passengers have already discovered over the last few years, it's possible to save money or find a better flight selection by self-connecting. Self-connection is the booking of two or more separate tickets, often where at least one is on an LCC.

Some online travel agencies (OTAs) have become "specialists" in the self-connecting market, but if prices are lower, the passenger often gets what they pay for.

The connections aren't guaranteed, ancillaries like baggage allowances aren't aligned between carriers, and that baggage must be collected and rechecked at the transfer airport. From the network carrier's perspective, the passenger experience is poor.

Sunsetting legacy processes

That's where "third-generation interlining" comes into its own. The term refers to a more integrated solution enabling all carrier types – full-service carriers, LCCs, and surface transport providers – to interline together, without the need for acronym-heavy and LCC-unfriendly legacy processes like MITA or IATCI.

At the same time it, affords the passenger a seamless journey, including through-checked baggage, disrupted-connection protection, and harmonized ancillaries. Crucially, third-generation interlining is compatible with both network-carrier and LCC processes. Now that's a party everyone can come to!

For the first time, these virtual interlining itineraries are available via NDC. NDC-native solutions like Air Black Box's Air Connection Engine (ACE) not only source content directly from airline PSSs and NDC interfaces but also make the resultant interline itineraries available to airline booking engines and through NDC to multiple distribution channels. 

The beauty of NDC within an interline environment

Let's imagine a large network carrier wants to sell connecting itineraries with a ticketless LCC. The network carrier provides its inventory to ACE using NDC, ACE combines it with the LCC's inventory, and in turn uses NDC to respond to search requests from the booking engine, from OTAs, or from metasearch, to deliver a combined interline itinerary with full NDC-enabled rich content. 

The network carrier gets its connecting feed without changing its processes, and the LCC doesn't have to worry about rude words like prorate or settlement.

The passenger gets a wider choice of good value itineraries, and as they would expect on a network carrier, they're able to check their bag all the way through to the destination. That is NDC being used to deliver virtual interline.

To judge from the level of airline interest, it's an idea whose time has come. And unlike nuclear fusion, it's already on stream today.