NDC: Helping or hindering travel industry recovery?



Designed to transform the way air products are retailed to corporations and travelers, the New Distribution Capability (NDC) is to be a new standard that will allow airlines to personalize their offers and sell their ancillary products beyond their own websites. Is it working?

  1. Airlines are still in a volatile environment as COVID-19 is hopefully making its exit, and this new product was developed to help build the industry back up.
  2. What happens when airlines can sell baggage fees, pre-assigned seats, boarding privileges, and so on, in the travel agency channel rather than just its own website?
  3. The Head of Distribution for Qantas Airline lends her thoughts on the effectiveness of the NDC.

NDC – New Distribution Capability – is an IATA-led initiative that uses an XML-based data transmission standard and is intended to improve the airlines’ ability to sell and market its products. It allows airlines to make personalized offers and to sell ancillary products like baggage fees, pre-assigned seats, boarding privileges, and so on, in the travel agency channel rather than only on its own website.

The NDC was designed to enable the travel industry to transform the way air products are retailed to corporations as well as leisure and business travelers by addressing the industry’s current distribution limitations: product differentiation and time-to-market, access to full and rich air content and finally, transparent shopping experience. This new standard is intended to enhance the capability of communications between airlines and travel agents.

In an interview conducted by Will Owen Hughes of CAPA Live with the Head of Distribution for Qantas airline, Nadine Dawood Morgan, the discussion focuses on whether or not the NDC is helping or hindering recovery in the travel industry.

Will Owen Hughes:

So look, obviously the industry is continuing to operate in hugely challenging conditions. I mean, [inaudible 00:00:49] got the positives that the vaccines are on the way. But with new variants, just in the UK here, we’ve seen the introduction of new quarantine measures really making it tricky for the travel industry. I guess first up, Nadine, if we maybe want to just have a little bit of a reflection on what the experience of 2020 was for Qantas. And really where is Qantas at the moment in terms of the recovery curve?

Nadine Dawood Morgan:

Well, I think 2020 was pretty shocking for everyone, to be honest, and we were no exception. It was absolutely not the year that we thought it was going to be. We were actually all set to celebrate our centenary. So we were about to celebrate the fact that we were one of the oldest-serving airlines in the world, and we never expected to do that with the backdrop of a pandemic. So it’s been hugely impactful, just absolutely incredible. And I know that most airlines are in the same position, and the whole travel industry has had this massive, very long shock, really. I think from a Qantas perspective, there’s been two parts of it for us. Because we actually haven’t flown internationally for nearly a year now, because of our border restrictions. So the Australian borders are quite firmly closed. We’ve done a few repatriation flights, we’ve been supporting in that way, but commercially we’ve not really been flying internationally. And domestically it’s been really challenging, because the borders have opened and shut quite quickly. So it’s been quite volatile.

So for those of you who aren’t aware that we’ve been quite conservative round how we managed that. And so when there has been cases, the borders have shut. So that’s been quite difficult to manage, and from an airline point of view, it’s meant a lot of change, and we’ve had to pivot really quickly. And I mean, it’s been an incredible learning, really, in some ways. We were actually founded off the back of the First World War, and off the back of another pandemic. And so we’re quite resilient at Qantas, and we’ve weathered a few storms, and this is no exception. Obviously it’s huge, but yeah, it’s been a huge challenge. Recovery-wise, we’re starting to see the light at the end of the tunnel. We’re still in a volatile environment, but domestically, we got back to about two thirds of our capacity, and we’re hoping to get to about 80% by June. So we’re hoping to get back on track, but it’s obviously had a huge impact.

Will Owen Hughes:

[crosstalk 00:03:29]

Nadine Dawood Morgan:

[inaudible 00:03:30] we are in a transformation now with our business is changing rapidly, and it’s been hugely impactful for the country, for the business, for all airlines really.

Will Owen Hughes:

[crosstalk 00:03:41] yeah, I guess you’re in a bit of a different position to a number of airlines out there. You’ve got a huge domestic market and [inaudible 00:03:51] move more into NDC now. And if you look at where your NDC initiative was going, are COVID, and the impact of COVID in 2020, has that changed any of your plans with NDC? I mean, it probably had some near-term impacts, but did it change anything?

Nadine Dawood Morgan:

Do you know what? It’s been such an interesting journey, because when it all started, when COVID, when the impact really hit, it obviously had a big shock. And we had a lot of momentum already going, and there was a pause, really, across the industry. And I think there were some of our partners that were just in survival mode. Some took a deep breath and went, “Okay, well maybe this is an opportunity to double down.” And so we definitely slowed down, we didn’t actually stop, though. And we had our production environment open, and we kept going. And it was quite short-lived, that pause, because we kept going. And we actually got up and running again, and some of our partners really wanted to accelerate. So even though it slowed, and I think it slowed across the whole industry, and it’s really not back to where it was yet. There is definitely partners who have accelerated, and we doubled down, and we’ve gone back to very regular, really, cycles of every six weeks. We’ve got our team back on deck, and yeah, we’ve got quite a lot happening.

In terms of roadmap, it didn’t really change the roadmap. Because our strategy was very long-term, and we were very focused on modernizing that shopping, and booking, and servicing experience. And I think the servicing piece had always been really important for us. And we work really closely with our agency partners, and it’s crucial for adoption for us, for the adoption of QDP, that the servicing is really solid, and better than what we have today. And so that’s always been a big thing. And I think that COVID has been one of those, because there’s been so much change, and customers had to change [inaudible 00:06:12] bookings. There’s been involuntary changes as well as voluntary changes, that servicing piece has become really, really important. But it was always a big deal for us.

Will Owen Hughes:

[inaudible 00:06:21] yeah, [crosstalk 00:06:23]

Nadine Dawood Morgan:

I think we talk a lot about content with NDC, and how exciting it is, and we’re super excited about that. But we know that without the servicing capability being amazing, we won’t have the volumes there for content.

Will Owen Hughes:

Yeah, yeah, yeah. And I think at Travelport, when we take a look back at what’s going on across the industry, I think you’re exactly right. I think maybe there was a little bit of slowing up at the height of  some of [inaudible 00:06:51] COVID impacts. And sure, we’ve probably seen some airlines pause some of their plans while we get through this period. But actually, probably most of the airlines who were already invested in NDC, like Qantas, have been doubling down on that. And that’s certainly where we’re at actually, Travelport, we recognize that there’s still a real desire to improve that whole retailing proposition. And we’ve doubled up our investment to make sure we can deliver on that, and do some of the catch-up on this, right?

Nadine Dawood Morgan:

[inaudible 00:07:29].

Will Owen Hughes:

To get all of that important stuff you just talked about, the servicing and whatnot out there. [crosstalk 00:07:36]