New Distribution Capacity, or NDC, enables exciting airline revenue opportunities. IATA initiated the project in 2012 and its adoption is growing fast. This is how NDC can increase an airline’s revenue in three ways:
- Differentiation and Rich content
Many travellers currently treat airfares as commodities, particularly when booking via third party distribution networks. Third-parties may focus entirely on fare price; surfacing just the cheapest offers to the traveller. Airlines lack the ability to differentiate themselves by their superior service or ancillary options.
With NDC airlines can provide product descriptions, images and other rich content to enable customers to choose the experience that best suits their needs.
- Ancillary Merchandising
NDC provides new merchandising opportunities. Including promotion of ancillary services such as seats, meals, bags, and priority boarding which are not well supported via legacy distribution systems. Ancillary sales are an important revenue source for airlines with Low Cost Carriers often generating in excess of 50% of revenue from ancillaries. No airline can afford to be hindered by their choice of distribution system.
With legacy distribution systems airlines struggle to “know” the traveller. With NDC the airline can understand a passenger’s needs and personalise offers to match. Passengers enrolled in loyalty schemes can see special prices from the first interaction, passengers who are specifically interested in premium fares don’t need to waste their time sifting through economy offers. Personalisation has been proven to be worth over 5 percent of revenue in other consumer sectors; airlines adopting personalisation could see substantial benefits.
Paxport & NDC
Are you an airline looking to shift your volumes to NDC? At Paxport we are experts at integrating NDC APIs to help travel sellers access NDC content via our PaxFab aggregation platform. Let’s start a conversation, get in touch via our contact form.