The recent FareTrack webinar, hosted by Kris Glabinski, VP of Strategy, Aggregate Intelligence, offered valuable insights for airline distribution professionals navigating the evolving landscape of New Distribution Capability (NDC). The session, featuring expert guest Iván Ordás Villamandos, Managing Consultant, Reliavel Partners centered on the transformative potential of NDC in boosting airline revenue and enhancing control over content distribution.
NDC: From Buzzword to Essential Tool
As airlines continue to grapple with the challenges of a hyper-competitive market, NDC has shifted from a buzzword to a must-have tool in the distribution strategy arsenal.
NDC enables airlines to bypass traditional Global Distribution System (GDS) fees, giving them greater flexibility in their pricing and inventory management. While this capability has been in development for nearly a decade, its adoption has varied, with European carriers typically leading the way. Regardless of geography, NDC offers a pathway for airlines to capture significant revenue opportunities through dynamic pricing and enhanced customer experiences.
ROI Beyond Cost Savings: The Revenue Opportunity
One of the key takeaways from the FareTrack webinar was the real value of NDC. While early discussions around NDC adoption focused heavily on cost savings from avoiding GDS fees, Ivan highlighted that the true return on investment (ROI) comes from the ability to offer differentiated and dynamic pricing. NDC’s advanced capabilities enable airlines to provide more tailored and compelling offers, improving not only the revenue per customer but also overall customer satisfaction.
By leveraging NDC’s flexibility, airlines can implement agile pricing strategies and respond more quickly to market shifts. This agility is critical in an industry where customer preferences, demand patterns, and competitive pressures are constantly evolving. Moreover, NDC allows airlines to more effectively manage disruptions and offer richer, more transparent content to customers, empowering them to make better-informed purchasing decisions.
Adapting Processes for Dynamic Pricing
However, fully realizing the benefits of NDC requires a shift in mindset and operations. Traditional carriers, Ivan explained, are often slower to adopt dynamic pricing strategies compared to low-cost carriers, which are more agile and accustomed to rapid fare adjustments. For legacy airlines, the hesitation stems from the perceived risk of implementing pricing changes too quickly, particularly when base fares are involved.
Ivan stressed that for airlines to fully unlock NDC’s potential, they need to adapt their revenue management systems to accommodate continuous pricing strategies and capitalize on the flexibility NDC offers. Airlines that successfully integrate NDC into their operations will be better positioned to optimize both pricing and customer experience, paving the way for long-term revenue growth.
Controlling Distribution Through NDC Partnerships
Another critical aspect discussed in the webinar was the ability of NDC to give airlines greater control over their content distribution. By entering into NDC agreements with online travel agents (OTAs) and other distribution partners, airlines can more effectively regulate how their products and prices are displayed. This added layer of control is essential in ensuring that customers see the offers airlines want to prioritize, rather than a manipulated version of their inventory.
Ivan pointed out that airlines can even set specific access conditions for their APIs, determining which partners receive which content. This level of granularity adds complexity but provides airlines with the ability to tailor their offerings for different partners, which is crucial in a competitive environment. However, it also introduces challenges when it comes to monitoring competition, as varied products and pricing strategies make direct comparisons increasingly difficult.
Rich Content: Helping Customers Compare
With the increasing complexity of airline offerings—including bundles, ancillary services, and differentiated fares—customers are often left to decipher the nuances on their own. Ivan and Kris agreed that airlines must work harder to provide rich content that makes product comparisons easier for customers. Some carriers are already utilizing technology to display product differences more clearly, but there is still room for improvement across the industry.
Ultimately, airlines need to focus not only on providing more detailed information but also on ensuring that their distribution partners present this content accurately and consistently. This requires ongoing auditing and close collaboration with OTAs to ensure that NDC content is being used to its full potential.
Looking Ahead: NDC’s Growing Role in Airline Distribution
As the FareTrack webinar concluded, both Ivan and Kris highlighted the need for continued dialogue on these topics. With OTAs and airlines pursuing different objectives—OTAs seeking maximum transaction volumes and airlines optimizing content pricing—there remains a pressing need for better alignment in how content is distributed and presented.
FareTrack’s tools and insights are helping airline professionals navigate these complexities, offering actionable data and business intelligence to optimize inventory and pricing strategies. As NDC adoption continues to grow, distribution professionals must stay ahead of the curve, ensuring that their processes, systems, and partnerships are primed to take full advantage of the opportunities NDC offers.
In conclusion, the FareTrack webinar underscored the critical importance of NDC in driving revenue growth and improving customer experience. For distribution professionals, the message was clear: those who embrace NDC and adapt their strategies accordingly will be better equipped to thrive in a rapidly changing market.
You can watch the full webinar on demand here https://www.faretrack.ai/webinar/
