DISTRIBUTION / AIR CONTENT
Few areas of business travel are as divisive as NDC but it is transforming airline distribution whether it’s welcomed or not. Betty Low reports
I t may have begun with low-cost carriers or with IATA’s intro- duction of its New Distribution Capability (NDC) in 2012 but the revolution was truly kickstarted when Lufthansa introduced an NDC product in 2018. Of course, ‘new’ in the world of airline distribution means little more than a means other than the GDS, – the airlines’ traditional method of delivering content to agencies. Low-cost carriers’ whole business model had been predicated upon the idea that selling air travel was a retailing activity which simply needed to be distributed directly to market. They also changed the rules by disaggregating the core product and making money from selling ancillaries – and this meant a myriad of packages. So far, so good, but was it relevant? Business people flew on traditional carriers, right? But they were consumers too. On their holidays they discovered that low-cost carriers were easy to book and provided perfectly good service. They also flew between the secondary cities to which business travellers increasingly needed access. According to James Marchant, head of business development at easyJet: “The majority of [easyJet] business bookings are still made directly on our website or the mobile app because we attract a large SME customer base that don’t have policies that force them to book through other channels.” But how about the larger, managed travel programmes? Lufthansa moving to direct distribution was a very different proposition. A doyen of traditional European carriers and linchpin of corporate programmes was abandoning wholehearted participation in traditional airline distribution – namely putting all its content on a GDS. Why did Lufthansa need a new method of distribution? Or to put it another way, why are airlines seeking and embracing NDC? Very simply
We’re all on a journey... the
net effect of the pandemic won’t have slowed down the roll-out of NDC in any way
because there is plentiful demand for lucrative retail air products and services that cannot be delivered via legacy GDS systems and, well, because distributing content via the GDS costs airlines money. SO WHAT CHANGED? The issues with traditional distribution are deep and very much connected with profiles of air travel supply and demand changing – and expanding – while distribution capability remained limited. Airlines began as state-owned national carriers, some long-haul specialists and some short-haul carriers. But the landscape has changed considerably since the GDS was conceived as their universal
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businesstravelnewseurope.com | SPRING 2023
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