NDC: New Distribution Capability

New Distribution Capability (NDC)

New Distribution Capability (NDC) is a Data Exchange Format based on Offer and Order Management Processes for Airlines to Create and Distribute relevant offers to the customer regardless of the distribution channel. ​​​​

During the 1970s, Airlines created computerized ticket reservation systems, known as Central Reservation Systems (CRS), to help their agents search, book, and confirm flight bookings. Having proven to be an extremely efficient tool, the airline industry looked to reduce their booking workloads by allowing travel agents to make bookings directly on the CRS.

However, each airline had its own unique CRS. To gain access to the flights of every airline, travel agents in the US demanded for and received a single CRS platform. This remained the status quo for over 20 years. Customers called the travel agents, who then booked their flights on the CRS.

However, in the 1990, the major CRSs namely Sabre, Amadeus, and Worldspan & Galileo (now Travelport) chose to become independent of the airlines that had created them four decades earlier. This was a milestone for the industry and the beginning of the Global Distribution System (GDS) era. In only a few years, these major GDS companies emerged as formidable air travel distribution systems. The GDSs use the legacy EDIFACT protocol, which dates back to over 40 years. Basically, NDC is a communication protocol, aimed at replacing the old EDIFACT protocol, that has been around since the 1980s and used by GDSs.

With the advent of the internet came online travel agencies (OTAs). While these agencies wanted to offer their customers access to every possible flight, they didn’t necessarily want to go through the trouble of integrating with three GDSs. So, the GDS aggregators arrived and translated each GDS’s language into a single common format.

What is NDC API?

The NDC (New Distribution Capability) standard, created by IATA, is a distribution standard in XML format aimed at facilitating the exchange of data between airlines and business travel agencies.

Why is NDC important for airlines?

One of the main benefits of NDC was its supposed ability to allow airlines to bypass the GDSs. NDC would allow airlines to directly share dynamic content with OTAs, travel search engines, and TMCs without the need for a GDS.

What does NDC mean for GDS?

What exactly is New Distribution Capability? In other words, NDC refers to the airline's capability to share information and sell their own goods and services directly to the travel agents without the GDS intermediary.

What are the benefits of NDC?

NDC is a new standard of transmitting data, developed by IATA, that allows airlines to distribute their content (auxiliaries like booking your baggage, Wi-Fi and meals separately) in real-time. Many airlines see NDC as an enabler to deliver better content to everyone and therefore improve the travel experience.

What is the difference between GDS and NDC?

While in the GDS traditional distribution channel your Agency is issuing the ticket using the GDS/Ticketing System provider solution, the NDC transaction is issued by the airline itself.

What is IATA Level 4 NDC certification?

Airlines that deploy an NDC API, and Sellers and Aggregators that consume an airline NDC API can apply for the NDC Certified designation, for a particular version, or several available versions, of NDC schemas, at either Level 2, 3 and 4.

Level 4 NDC certification confirms that FCM can provide 'Full Offer and Order Management'. This means in addition to booking NDC airline content, the company's travel consultants can also support changes in travelers NDC bookings and flight disruption.

Level	Functionality
NDC@Scale	Minimum set of Recognized Capabilities
Level 1	Post Booking Ancillaries
Level 2	Offer Management
Level 3	Offer and Order Management
Level 4	Full Offer and Order Management

How many Airlines, IT Providers, Sellers and Aggregators are NDC certified?

So far over 245 companies has already adopts NDC, which includes Airline, IT Providers, Sellers and Aggregators. Among them 99 Airlines out of 275 IATA member airline including Emirates, Qatar Airways, British Airways, Lufthansa and American Airlines, 44 DATA Aggregators, 68 IT Providers and 35 sellers. All companies certified their solutions in accordance with NDC certification levels. The number is counting everyday…

If you don't have clear understanding on NDC, I would suggest to read below some terminology's description in brief:

NDC: New Distribution Capability - 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, allowing airlines to make personalized offers and to sell ancillary products (like baggage fees, pre-assigned seats, boarding privileges, etc.) in the travel agency channel rather than only on its own website.

NDC Capable: Vendors that are deemed capable of delivering NDC-certified products or services to airlines and distributors.

NDC Certification: Managed by IATA, it confirms the scope and level of an entity’s ability to receive and send NDC messages; there are three certification levels available to airlines that deploy an NDC API as well as agents and aggregators that use the APIs:

API: Application Programming Interface - code that allows for two software programs to communicate with each other.

XML: Extensible Markup Language - a messaging standard designed to be easier and more flexible than the existing EDIFACT standard that NDC is designed to replace.

ATPCO: Airline Tariff Publishing Company - an airline fare and shopping data provider that also recently purchased Route Happy, an NDC certified standard for airline-rich content; partnered with SITA to build NDC Exchange, an industry-owned platform that will provide simple, cost-effective NDC API connectivity for airlines and their partners in order to drive adoption.

Direct Connect: When a travel agency or travel management company gains direct access to an airline’s content rather than through a third-party intermediary (i.e., GDS); direct connect is one of a few ways to connect to NDC (the others are through an NDC aggregator/service provider or via a GDS).

EDIFACT: Electronic Data Interchange for Administration, Commerce and Transport - the coding language upon which GDSs have been built to distribute content; NDC proponents say that the EDIFACT standard constrains its ability to market and sell ancillary services and limits product differentiation.

GDS: Global Distribution System - a primary reservation tool used by travel agents and services to book airline tickets, hotel rooms, rental cars, etc.; many GDS companies initially did not support NDC, but as more airlines continue to forge ahead with it, the GDSs have begun adopting the new standard themselves.

IATA: International Air Transport Association - the primary industry trade group and lobbying arm for airlines; it launched NDC in 2012 to improve how airline content is distributed, essentially providing travel agents access to a full breadth of an airline’s ancillaries for a more streamlined purchasing experience.

SITA: A global provider of IT and communications to the air transport industry; partnered with ATPCO to build NDC Exchange, an industry-owned platform that will provide simple, cost-effective NDC API connectivity for airlines and their partners in order to drive adoption.

ref: interglobe.com; iata.org; amexglobalbusinesstravel.com; ndcmarketplace.com