If the theme of 2020 was disruption, it certainly hasn't stopped progress with NDC.
In fact, 2021 will likely be seen as a pivotal year in the deployment of this messaging standard that is aiming to support an important part of increased flexibility and dynamic retailing required by the industry.
Today, although we have achieved several milestones, the road to mass industrialization isn't complete. We're now at a stage in NDC's progress where the standard is becoming more mature and is starting to unlock considerable opportunities - despite remaining challenges - for all travel players.
Now is the time to get on board and collaborate towards a shared vision to unlock these opportunities in digital travel retailing.
In our latest paper, NDC 2021 and the path to industrialization, we spoke with experts across the industry to find out more about the next steps needed to further accelerate NDC and to get a pulse on what industry leaders are doing.
I hope this paper can serve as a reminder of how far we've come, and an encouragement to all key players in the travel industry to keep collaborating and get aligned on where we need to go next.
If we continue working together with a mission to promote the mass industrialization of NDC, the entire travel industry stands to benefit.
First, let's take a status check
It has been eight years since IATA published its "Future Of Airline Distribution" whitepaper, outlining a vision for the future of the distribution ecosystem in an NDC world. Progress hasn't been easy and it hasn't been linear, but today, the travel industry has several successes to celebrate with NDC.
Amadeus is working with more than 30 airlines on the IT side and close to 20 airlines for the distribution of its content via NDC through the Amadeus Travel Platform.
Approximately 80% of these distribution airline partners have achieved IATA Level 4 certification, and our NDC airline partners together represent nearly 25% of global passenger numbers in 2019, showcasing the commitment and global adoption of NDC across the world.
In addition, we intend to make sure that all travel agencies using Amadeus around the world can book this airline content via NDC through Amadeus solutions by the end of this year.
On a practical level, airlines are already beginning to experiment with NDC to deliver tailored fare bundles and richer offers to travelers while removing unnecessary steps from the booking and expense processes. American Airlines for example, is using NDC to create bespoke bundled offers for select employees of its large corporate customers.
This is just an initial example in terms of what is possible. The technology is advancing steadily, and we envision a future of adaptable, contextual and personalized travel retailing that fits digital consumers' needs.
Overcoming barriers to reaching critical mass
We've made significant strides, but the travel industry still faces some major hurdles when it comes to mass NDC adoption. One of the key challenges is true standardization.
Although NDC is called a "standard", it is still being applied by airlines in different ways. These differences in applying the standard add little value to each airline's unique offering, but it does add complexity in NDC's implementation, which also increases the cost and contributes negatively to adoption.
There are some real parallels to be found in the shipping industry: before there were shipping containers, each company would ship their goods in their own boxes and cases, which made the loading and unloading of ships extremely slow and tedious.
When shipping containers were invented, the shipping industry was transformed: companies could fill their containers with anything they wanted, but the standard size of their shipment meant everything could move much faster and more efficiently, dramatically reducing costs.
Right now, airlines are shipping their inventory via NDC in different ways. If airlines each used NDC in the same way- in the same "message container" if you will - they could still deliver unique inventory to their travelers, but the standardization would dramatically increase efficiency and facilitate innovation in the long run.
Standardization is one barrier, but there are others. Our paper, which you can read here, also talks about the need for more commercial alignment across the industry, adaptation of mid- and back office systems, the need to prepare airline systems for a dramatic increase in transactional traffic and a shift in mindset as travel sellers need to adapt to offers and orders.
In addition, as an industry we will need to be mindful of the new competitive landscape, specifically around dynamic pricing, which could impact traveler confidence. This could ultimately trigger unwanted purchasing behaviors such as shopping around or delaying the trip purchase closer to the departure date.
Industry-wide collaboration is the key to our success
The major barriers to NDC's success all have one thing in common: collaboration could help us overcome each of them.
Early adopters of NDC have already worked out the biggest bumps. To really make NDC viable and widespread throughout the travel industry though, everyone needs to have a say, and everyone needs to get on board.
If airlines can agree on one unified way of implementing NDC, the whole industry can focus on experimenting and truly innovating with travel retailing.
This is yet another occasion, like many others in the past, where our industry needs to find a way to solve problems collaboratively. Airlines need to know what offers travelers are looking for. Travel sellers need to discover what airlines will bring with NDC.
echnology partners need to understand and tackle the issues travel sellers face when delivering value for airlines and travelers. It's only through dialogue and partnership that the industry will achieve the maximum benefits from investments in NDC and accelerate the industry's recovery.
For years we've been talking about NDC's potential for travel retailing. Even before COVID-19, we at Amadeus viewed the rollout of NDC as a key part of the long-term sustained growth of the travel sector. Now, in 2021, it's the moment to put action to words.
Last year the travel industry faced an existential challenge of unprecedented proportions, and now is the time for us to work together to embrace our industry's biggest challenges and opportunities head on.
We have at our fingertips an opportunity to help the travel industry restore traveler confidence, improve personalization, and deliver better customer service. NDC can help across many of these. Working together, we can make it available worldwide and bring it up to scale.