The world of corporate travel management is constantly evolving, and one of the most significant developments in recent years is the introduction of New Distribution Capability (NDC). NDC is a new standard for airline distribution that aims to modernize and simplify the booking process for travel agencies, travel management companies, and corporate travel departments. In this blog post, we will explore what NDC is and what it means for corporate travel management.
For those of you that are up to speed on NDC and closely following the news from American Airlines that they will pull 40% of their fares from EDIFACT-channels in April 2023, you should know that Traxo is ready. While this move will result in increased leakage due to key fares only being available through NDC and direct channels, Traxo customers will maintain 100% visibility into their employees’ bookings, even as more suppliers adopt the NDC model.
What is NDC?
New Distribution Capability is a technical standard developed by the International Air Transport Association (IATA) to facilitate the exchange of information between airlines, travel agents, and other industry players. NDC enables airlines to distribute their products and services through multiple channels, including their own websites, mobile apps, and third-party platforms. It also provides travel agents with access to more detailed information about airlines' products and services, such as baggage fees, seat availability, and ancillary services.
NDC is a departure from the traditional Global Distribution System (GDS) model, which has been in use for more than 40 years. The GDS model relies on a limited set of standardized data formats that have become outdated and inflexible in today's fast-paced digital environment. NDC, on the other hand, allows airlines to provide more personalized and customized offers to travel agents and corporate travel departments.
What are the benefits of NDC for corporate travel management?
NDC has several potential benefits for corporate travel management, including:
- Greater transparency and choice: NDC enables travel managers to access more detailed information about airlines' products and services, which can help them make more informed decisions about which airlines to recommend their travelers use. With access to real-time pricing and availability information, travel managers have the oversight to ensure travelers get the best rates and the heads-up needed to make pre-trip adjustments.
- More personalized offers: NDC allows airlines to provide more personalized offers and promotions to travel agents and corporate travel departments. This can help travel managers to tailor their travel programs to the specific needs and preferences of their business travelers, providing a more satisfying travel experience.
- Enhanced ancillary services: NDC enables airlines to offer a wider range of ancillary services, such as lounge access, Wi-Fi, and priority boarding, which can help enhance the overall travel experience for business travelers. These services can also help airlines to differentiate themselves from their competitors and increase revenue.
- Better data management: NDC provides more detailed and accurate data on airline bookings, which can help travel managers to better manage their travel spend and analyze their travel programs. This can help them to identify areas where they can reduce costs and improve traveler satisfaction.
What are the challenges of implementing NDC?
While NDC has the potential to revolutionize airline distribution and corporate travel management, there are also several challenges that need to be overcome for it to be successful. Some of the main challenges include:
- Technical complexity: NDC is a complex technical standard that requires significant investment in new technology and systems. Implementing NDC can be time-consuming and expensive, requiring a significant commitment of resources from airlines, travel agents, and corporate travel departments.
- Integration with existing systems: NDC needs to be integrated with existing travel management systems and processes, such as booking tools and expense management systems. This can be challenging and require significant changes to existing systems and processes.
- Training and education: NDC requires a significant amount of training and education for travel managers and corporate travel departments. This can be time-consuming and require a significant investment in resources to ensure that staff is familiar with how to operate in the context of NDC.
What do American Airlines’ NDC plans mean for travel management teams?
American Airlines' plans to adopt the New Distribution Capability (NDC) will have significant implications for corporate travel. For travel management teams that rely solely on TMCs to gather booking data, this shift may result in significant disruptions to booking visibility. Since many travelers will be forced to book fares via American Airlines directly, these bookings may not be captured in real-time or at all without a travel data aggregation solution like Traxo in place.
According to Phocuswire, American Airlines announced that travel agencies need to be connected to the carrier's New Distribution Capability technology by April 2023 to ensure access to its full range of third-party public channel content. Without this NDC connection, American estimates that agencies will lose access to "over 40% of fares available today via third-party legacy technology channels."
American Airlines' adoption of NDC is a step towards more advanced and personalized travel options. While this can be beneficial for both airlines and customers, it will require travel management teams to adapt and stay up-to-date with the changing landscape of airline distribution, including managing the increased complexity of airline offers and ensuring compliance with travel policies and budgets.
How does Traxo help with NDC?
Fortunately, as pointed out in a recent article by The Company Dime, Traxo’s ability to capture booking details from any originating source solves the visibility hurdle. With Traxo, details on corporate travel bookings are available for travel management teams well before trips occur, no matter how employees book their travel.
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To learn more about how Traxo provides complete booking details from every source and sets travel managers up for future success, get in touch with a Traxo data expert today!
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