Why does NDC matter to Travel Agents?

Travel agent tapping on the screen with the world as the background. Shows NDC bridging travel agents and airlines together
November 11, 2022

Aviation was one of the most heavily impacted industries during the pandemic. The sharp decline in air travel prompted many airlines to limit the operation of their flights. The volume of air traffic remained low until mid of 2021. However, the ease of travel restrictions urged many to get back up to the skies again. IATA’s annual traffic comparisons report noted an increase of 76.2% in this year’s total air traffic. This resurgence in air travel made it necessary for airlines to start personalising the travel experience of their passengers once again.

Getting things done with airline distribution system

The airline distribution system has been around for a long time. It gives Travel Agents a single point of access to book tickets, look into priced offers and request ancillaries specific to customer requirements. The birth of the distribution system began with CRS where agents tied up with airlines to automate the ticketing and booking process. 

There was a problem with this approach though. Agents had to keep switching back and forth between multiple airlines to book tickets. They wanted a centralised location that gave them quick access to multiple airlines. This led to the rise of GDS which helped Travel Agents check for airline inventory, fare classes and ancillaries in real time.

Problems with GDS

GDS makes use of a legacy data transmission protocol known as EDIFACT. In addition to providing limited access to available ancillaries, the protocol also required multiple third party service providers to be present within the distribution process. This meant that most of the passenger data were in the hands of external parties. This made it hard for airlines to differentiate themselves from other carriers and expand their retailing capabilities. Further limitations included:  

  • Reduced profit margins  
  • Limited sharing of ancillaries to Travel Agents 
  • Large number of intermediaries in the distribution process 
  • Complicated booking process 
  • High distribution fee for airlines 
  • Loss of commission for Travel Agents  

The rise of NDC

In 2012, IATA came up with the idea to introduce a more cost effective distribution channel. New Distribution Capability or NDC used a simpler data transmission standard known as XML to give airlines the direct connectivity they desired with their customers. It helped take care of the multiple restrictions placed by GDS systems.  

How does NDC benefit Travel Agents?

Thanks to NDC, airlines are able to expand their retailing capabilities and make air travel a more enjoyable experience. Unlike the rigidity of other traditional distribution models, NDC is a lot more flexible and easier to implement.   

Flowchart of the NDC distribution model
How the distribution model works with NDC

Most travellers look for the most affordable airfares. In the days before NDC, travel agencies had limited access to an airline’s ancillaries. Therefore, whenever a traveller wanted to economise, they were provided with the cheapest offers available. Now, Travel Agents can simply enter all the requirements of a customer on the airline’s website or an NDC aggregator portal and provide packages that neatly meet their requirements.

Can NDC increase the revenue of Travel Agents?

IATA carried out a study in 2015 to test the awareness of NDC on Travel Agents. Many of those interviewed were optimistic about the growth of NDC. This still rings true today. NDC provides agents better visibility into fares and cuts down surcharges imposed by airlines on GDS bookings. The benefits of NDC include: 

  • Delivering personalised content to customers 
  • Staying updated on the latest services and amenities
  • Offering dynamic pricing
  • Flexibility in flight payments
  • Centralised console to search and book tickets 
  • Managing various NDC content in a single place 
  • Advanced ticketing and post ticketing services

The need for NDC aggregators like VDC

Verteil Direct Connect (VDC) is Verteil’s own NDC distribution platform. We cut down the need for middlemen in the distribution process by connecting Travel Agents directly with airlines. VDC’s B2B web portal provides instant access to NDC content of over 40 airlines. Many OTAs integrate our API within their systems to simplify the booking experience and enhance the travel experience of their customers. 

Infographics highlighting some of the benefits VDC offers to travel agents

Want to reach out to us?

If you are from an airline, into corporate travel, or a travel agent, we would love to tell you more about how Verteil Direct Connect can help you. 

Please write to us on sales@verteil.com for further information. 

IATA Agents can register here to get started with Verteil

Non IATA Agents can register here