Flyers Deserve More: Prepare for a Big Take-off with New Distribution Capability
Date: Tuesday , January 31, 2017
Headquartered in Gurgaon, Airlines Technology is a travel technology company providing New Distribution Capability (NDC) based IT solution and services to airlines, travel agents and 3rd party vendors in travel industry.
Today, when a traveller logs on to any online travel agent website, he punches destination city, origin city along with travel dates and gets results. 99 percent of us will choose best possible fare and move on. But in this process, we always miss out to understand which flight was actually best suited for us, which one had best meal, or may have missed on free upgrade or possible utilization of frequent flyer miles.
As per IATA, 60 percent of Airlines reservations are managed through travel agents using Global Distribution Systems, and airlines pay hefty fees for them. This traditional distribution model is finding it difficult to keep pace with \'digitally aware\' travellers. The model offers price-based comparison irrespective of traveller\'s relationship with the airline, thereby commoditizing the entire shopping process. Customers remain unknown to airlines until a transaction takes place. Thus, it is impossible for an airline to customize its offers for customers via indirect channels.
Airlines right now are not able to sell any ancillary services (wifi, food, lounge, preferred seats, or boarding) on online travel agent (OTA) portal. This results in huge revenue and opportunity loss for airlines. Consumers also don\'t know what they deserve. They see only fares and schedule (time of flight) on OTA portal and have to make choice from that.
Due to technical limitations in existing eco system, travel agents do not have access to onboard offers and services of Airlines and are not able to execute the complete ticketing process (Booking, Modifications and Cancellation). Travellers don\'t understand if two flights are offering same or similar price, or which one will suit the traveller\'s needs best.
IATA\'s New Distribution Capability (NDC) initiative provides an innovative approach to airlines\' products and services distribution method. IATA is facilitating communication between airlines and agencies. With multitude of benefits for travellers, airlines, agencies and aggregators, NDC aims to provide a dynamic airline shopping experience with additional revenue generating opportunities for airlines. It is an initiative to bring airline distribution technology up to date and deliver an environment to stimulate airline profitability.
Whole focus of this initiative is to preserve interests on global airlines equity investors across industry. Few Indian carriers are classic examples of how value in this business has been depreciating for decades. Increase in the productivity of distribution channels, strengthening net income and lowering operating costs of all airlines will help this cause.
With NDC, this will change. Now, end user will be able to buy all onboard facilities like meal, extra leg room, onboard entertainment and WIFI, along with ground facilities like priority boarding, free lounge, limo pick & drop, check-in seat, and others directly from travel agent�s portal. All these offers will transparently come directly from airlines, saving huge intermediately cost, boosting their sales revenue and offering loads of rich content to end-users.
This will empower traveller to compare all onboard and ground facilities before making the final choice. It is evident that all users are not same; some prefer comfort, some want value for money, and rest may prefer best price. So if you are flying non-stop form Delhi to New York city, Wi-Fi either free or with small price tag will become mandatory. Or if you are flying with infants or small kids, fresh baby food served at right temperature can\'t be justified with any price tag. Any parent will pay anything for that kind of service. This empowerment to showcase all your amenities will help airlines to invest and upgrade on facilities and service level of their staff and aircrafts.
With growing number of sales channels such as airline website, mobile app, social media, travel agents, Online Travel Agencies (OTA), call centre bookings, and desk bookings, it is highly important to identify the right customer. Emerging technologies promise means to identify consumer even before the actual search begins. It allows airlines to project their offerings based on the perceived value and preference of an individual customer, in turn allowing them to evaluate multiple offerings based not just on a single parameter of price but also customer satisfaction.
So in order to woo you as returning customer, you may get lot of complimentary upgrades, better wines and services on board. Other airlines may give you better fare pricing on same facilities and services to give you taste of his. So NDC will also open up competition and option to choose from bigger platter. All these offers and options will be dynamically pushed while you will be in process of making your choice on travel portal. So you will no longer regret after your booking that for $50 you missed to choose free upgrade or you were eligible for limo pickup but didn\'t exercise that right.
The strategy to adopt NDC will be critical for airlines. Early adopters of NDC can achieve faster ROI and reduce the impact of implementation. New merchandizing engine will provide flexibility to deliver seats and offers using NDC standards. In a short time, this solution will allow airlines to achieve their business objectives for self-operated routes without significant investments.
Today, there are more than 30 airlines live or ready to be live on NDC. This number is expected to rise to 90 by 2020. By 2025, we at Airlines Technology expect that more than 70 percent airlines will either fully adopt NDC or have majority of business via NDC.