Distribution Transformation – The time is now

2024: The Year of NDC

Air travel returned to 2019 levels last year, but continued challenges demand that airlines seek improved commercial outcome to improve profitability. NDC is an important part of that response as the foundation for the distribution transformation, and Accelya has shared insights carriers can follow in a new eBook, writes Barbara Moreno, Director of Product Marketing – Accelya.

For much of the 12 years of its existence, the approach of many airlines to New Distribution Capability (NDC) can be characterized as ‘if’ rather than ‘when’. At Accelya, we’ve always been believers in NDC, and pioneers in its development and roll out, but have recognized the hesitancy many airlines have experienced when approaching what will ultimately be a radical transformation.

Last year, however, we believe there was a decisive shift in mindset and are very confident that 2024 is the year of ‘when’ and that more and more airlines are ready either to make the leap or to further accelerate their retail transformation.

Part of the reason for the new momentum in NDC is that while air travel returned to 2019 levels last year, it came back with a complement of challenges both old and new: heavy competition; geopolitical volatility; high Opex and inflation. All of which adds up to profit margins under pressure.

That puts more emphasis on airlines pulling those few levers that are under their direct control e.g. distribution costs and the products and services they’re offering to customers. Optimizing those starts with distribution transformation. NDC is the best vehicle for that, breaking the shackles imposed by legacy GDS systems and offering a path towards an enriched offering tailored to travellers needs at lower costs.

Over recent months we’ve been articulating our NDC offering, insights and views and have pulled all of them together into an eBook that can help our customers to understand the challenges and opportunities ahead for them. We’re proud to launch that book today.

There’s an NDC path for every airline

Jim Davidson, Accelya’s Vice Chairman, was an early NDC evangelist, says that the potential rewards are not yet being shared equally and that those not participating are risking  their competitiveness. He argues that a combination of technological development and the commercial landscape for airlines means that time has come for all carriers, whatever their shape or size.

This last point is critical. The path forward will not be the same for every airline. At Accelya, we understand that every carrier is dealing with a unique and complex network of legacy systems and that each will require a tailored approach to their retail transformation.

Making the leap to modern retailing

Nonetheless, there will be characteristics common to all, and we identified five key takeaways for modern retailing from Travel in Motion’s Accelya-sponsored Moving from Concept to Design paper that can help guide the airline journey.

• Define your objectives and build clear executive alignment around them.
• Everything is changing, from technology to consumer behaviour to your employees’ skillsets, this is more than continuous improvement: Embrace Transformation.
• Make sure your Supporting Vendors dance to your tune and not their own, and can provide a flexible, future-proof infrastructure.
• The key to success is to be Flexible and Modular, with the freedom to plug in best of breed technology to ensure the right platform emerges.
• Finally, Collaboration. Ally your in-house expertise with counsel and strategy from third party partners. Transformation is tough but support is at hand.

Airlines seeking to develop a bold and imaginative vision that distinguishes them from their peers and suits their commercial aims and customer offer ambitions have a range of adoption strategies to consider.

Finding the right adoption strategies

Bill Cavendish, Accelya Global Business Development, identified a number of strategies used by pioneers to encourage their travel partners to migrate to NDC platforms and ‘to engage positively with an airline to sell more and different content through new and richer channels’.

In the eBook, Cavendish outlines different adoption strategies which airlines can choose from, or even mix, depending on the adoption levers they have at their disposal:

• Offering a reward – using incentives such as exclusive content and offers through NDC channels.
• Removing incentives – Airlines have successfully moved agencies to NDC by removing content from the GDS or adding surcharges for their use.

The key takeaway is that there is an distribution  strategy to support every airline’s retailing and commercial goals, and NDC is the foundational technology on which to build that retailing strategy and transformation to ONE Order.

No technology vendor has had more success in establishing NDC for airlines than Accelya. We are proud to be number one – industry data shows that Accelya enables more NDC transactions than any other provider multiple times over –, and we have added a roster of airline customers that already includes United, American, Qantas and Lufthansa Group.

We are committed to innovation, our NDC is providing a strong foundation for ONE Order, an ongoing process which requires adapting your technology and organisation, and where Accelya will drive this next era of airline transformation, end-to-end with a robust, modular and secure platform for retailing innovation.

To find out more, download our eBook, or talk to us about how we can help 2024 be the year of distribution transformation for you.