Guest Post: NDC means airlines should think less about ancillaries more about the customer

Iata’s NDC (New Distribution Capability) program was one of the most talked about topics for airlines in 2014 – and it’s sure to stay at the top of the agenda in the year ahead.

Eric Dumas, chief executive officer, Vayant

Iata’s NDC (New Distribution Capability) program was one of the most talked about topics for airlines in 2014 – and it’s sure to stay at the top of the agenda in the year ahead.

That’s not surprising – NDC is one of the most significant events to hit the industry in recent years and it’s causing everyone to think deeply about air pricing.

We talk to a lot of airlines at Vayant and many of those conversations are about how airlines can turn NDC-driven transformation to their advantage.

The airlines tend to focus on how NDC can grow revenues through ancillary sales.

The numbers are promising: airline ancillary revenues expanded at a rate of 1,200% between 2007 and 2013.

By last year, according to research by IdeaWorksCompany, ancillary was worth $31.5 billion.

We think that airlines can aim even higher and use NDC as an opportunity to tackle longstanding customer pain points and deliver stand-out customer experiences.

In other words, rather than concentrate on developing products simply hoping to boost ancillary revenues, we believe airlines should move their focus on to the customer.

This is a customer-driven NDC strategy and it’s about looking at the levers of customer engagement and asking some fundamental questions about the customer experience.

These questions could include: what will make the customer’s trip experience smoother and more enjoyable?

Which devices do they use to buy travel? How can you make the whole shopping process friction-free and simple?

Once you know the answers to these questions, NDC gives you the scope to come up with richer products and services that have customer-relevant ancillary elements baked in.

As a company which has built its business by challenging the old order, we’re excited about the NDC program’s goal of transforming pricing.

We’re so confident about NDC’s revolutionary impact that we’ve made NDC-1.1 part of our core shopping and pricing engine.

It’s all ready to go: an airline just has to stick the key in the ignition.

The standards and technology are in place, but the biggest prizes await those airlines that understand that NDC means a lot more than extra ancillary revenues.

We would urge these visionary airlines to build an NDC customer-strategy, lets craft ‘human-shaped’ products that make a really snug fit with the customer.

These are the kind of highly-targeted offers that can make airlines – or indeed any travel seller – stand out in today’s ferociously competitive markets.

NB: Vayant Travel Technologies is an IATA Strategic Partner, providing its expertise by supporting the activities and initiatives of IATA and its member airlines.