British Airways, which has been piloting IATA's New Distribution Capability (NDC) since last year, went one step further this week. It introduced enhancements specially targeted to its corporate clients.
The latest changes will enable any corporate that has a deal with BA and access to an NDC-enabled system to gain full access to their deal, including negotiated fares, holding a booking, paying at a later date, cancelling their itinerary and adding ancillaries such as seat selection and pre-ordering of meals. They are also able to make changes to flight itineraries such as date and time changes and cabin upgrades.
In other words BA has enhanced IATA's NDC to now be able to tailor its offering for specific corporate customers.
At the recent BTiQ Business Travel Summit in Amsterdam, a speaker on the CEOs panel referred to NDC as "a solution looking for a problem".
If nothing else, the fact that IATA has spent years developing NDC means that the airlines thought they did have a problem.
And they did inasmuch as they couldn't market their specific product nor sell their extra services at the time of booking.
The problem that NDC solves is that airlines spend millions on their product development and differentiation which they want customers — corporate as well as leisure — to see. The GDS booking system is a legacy system which was developed more than half a century ago in acknowledgement of the fact that airlines operated globally and so needed a universal and international standard for information, data collection, airport and travel agent standards, etc.
And because air fares half a century ago were fewer, more uniform and more all-inclusive, the GDS air booking process in most cases includes only the base fare and any spend on ancillaries often escapes the travel trip cost data set.
The GDS has worked well and been a cost-effective distribution channel but it is no longer universal. The low-cost carriers were launched on a foundation of direct distribution which was fine for leisure travel. However, some management headaches appeared when business travellers started using low-fare carriers. Now that traditional carriers are mimicking the LCCs' unbundling of fares data has become fragmented and its collection has therefore become challenging for corporate travel managers.
Corporate managers need to offer their internal customers a full service — such as being able to book what airlines consider extras that many business travellers consider essential such as seat selection and priority boarding — and also be able to collect the full data.
This enhancement means not only that corporate buyers can get corporate rates but that they can book ancillaries and so capture the data in one place.
That's quite a benefit. Watch for other airlines following suit.