PROS is now IATA NDC Level 4 Capable in addition to its existing NDC Level 2 Capable designation. To breakdown how airlines can transform their retailing approach, we’ve created a starter kit to address some of the common questions and learnings around NDC.
Every cloud has a silver lining. And as airline distribution and retail become more complex, airlines have IATA’s NDC (New Distribution Capability) to lean on.
In this blog post I will not look to dispel myths about what NDC is and is not. Any airline that is embarking on the digital retail journey has a good understanding of IATA’s (not so) new distribution standard. Instead, I’d like to look at some of the ways our airline customers and partners have approached NDC.
First Things First – Get Your Commercial Strategy Clear
Airline NDC is not “new” anymore. There has been a lot of buzz around it for more than half a decade now and it is a live project today for quite a few significant players on the market – Lufthansa, British Airways, Skyscanner… to name a few. But NDC is not the golden goose unless your airline paints a clear commercial picture for NDC to support and works hard to deliver it. Long story short, before embarking on a years-long NDC program rather figure out your commercial goals and objectives first, and then define the steps to get you there. And these might change over time. For example, you might target to drive X% more revenue through airline ancillary sales on the metasearch channel. Today it can be by differentiating with branded fares instead of the lowest price available. Tomorrow, it could be through upselling with seat choice pricing or airline ancillary bundle offers of Wi-Fi service and priority boarding.
Figure Out the Basics – Boost Your Offer Management Engine
Airline NDC overhauls the distribution pipes, for sure. It is the “vehicle” for your airline’s personalized and revenue optimal offers, but it is not the “fuel”. Your systems for airline offer and revenue management are. They are at the core of creating a good product for your passengers that is in line with your airline’s eCommerce strategy and revenue goals. And a flexible offer management engine can be broken into several components. PROS is IATA NDC Level 2 Capable for offer management enabling a modular approach for airlines in an NDC manner. I’ve seen many of PROS airline customers decouple their pricing from their PSS to have more flexibility and control when designing offers. This also helps when you are introducing a-la-carte flight related ancillaries like to experiment with your airline’s merchandising strategy during shopping. It is also vital if you are looking to optimize distribution cost for high look-to-book channels like metasearch.
Airline NDC Will Not Deliver “The Amazon Experience” – Your Airline Will
NDC means freedom to display richer offers. You can now display what your airline brand invests in: great cabins, spacious seats, rich meals. But it is your airline’s responsibility how. Airline NDC does not hand you capabilities to build great interfaces and user experience. The NDC world comes with the challenge of showcasing properly rich and diversified offers. Airlines must be prepared to display these offers on their web, mobile and indirect channels clearly to the traveler and help them make an informed choice when shopping. Online retailers are pros at this; airlines are not (yet), because of the commoditized airline product differentiated traditionally only on availability, schedule and price. Airline retail is more than this: NDC will facilitate the backend communication and airlines and their 3rd party partners must figure the frontend in order to deliver the entire customer experience – from inspiration to post trip.
Plug the NDC Cable
If you’ve checked the boxes above, then you should be ready to pilot NDC. Airlines have just started exploring what they could do with the standard and how it can help them better achieve their goals. PROS is IATA NDC Level 4 Capable for PROS Retail, both consuming and exposing NDC content to support various business needs. I’ve seen airlines use the new standard to shift more bookings to direct and thus move away from traditional GDS distribution to respond in a more personalized manner through NDC. Other airlines are using NDC to recreate the dotcom experience on 3rd party sales channels as an alternative to using PSS web services. There is no right or wrong way to do NDC. And trying out new ways to reach your commercial goals through the NDC standard will only open new digital retail opportunities.
Stay tuned for PROS upcoming whitepaper on NDC and retailing.
About the AuthorMore Content by Stanislava Yordanova