Introduction

New Distribution Capability (NDC) is a travel industry standard used by airlines, aggregators, and travel sellers for distributing and selling flight content.

NDC is developed by the International Air Transportation Association (IATA) to improve communications between airlines and travel sellers and transform the way air products are retailed to leisure and business travellers. NDC is not a system, database, or piece of software – it's a standard for exchanging data and is open to any third party, intermediary, or IT provider.

How did NDC begin?

Before NDC

All travel businesses from small local travel agents to global business travel management companies (TMCs) need a way to search, book, and manage flights for their customers.

Global Distribution Systems (GDSs) are the main way that travel sellers access airlines' flight content but behind the scenes, they rely on a decades-old data exchange standard called EDIFACT. The standard isn't efficient and flexible enough for the demands of both airlines and travellers today.

EDIFACT is a text-only method of data transfer that can't handle rich media like images or videos. Forty years ago, that was a huge accomplishment: the ability to surface and access routes from multiple airlines transformed the travel industry. But with the rapid shift to online retailing and the evolution of digital offerings, EDIFACT has not kept pace with customer demands and has held the industry back.

The Making of NDC

IATA (International Air Transportation Association) recognised an opportunity to develop a new XML-based data exchange standard to enable a better flight shopping, booking, and post-booking experience. XML gives stakeholders more flexibility in passing information including rich content from airlines to travel sellers.

XML is widely used by organisations and industries around the world for better collaboration and data accessibility. By introducing NDC as an industry-wide standard instead of relying on airlines to develop individual APIs, IATA brings consistency across hundreds of organisations and helps to speed up development time and make it easier for new entrants to go to market.

NDC also enables better traveller experiences with improved offer management and order management.

Offer Management

Offer management refers to airline capabilities for how they distribute their full product offerings and merchandise additional services like baggage, seat selection, or ancillaries using rich content.

Order Management

Order management refers to airline capabilities related to creating and managing NDC orders throughout the entire process from booking to fulfilment.

Key milestones of IATA NDC development

A timeline of NDC starting in 2012 with the NDC Standard getting established to 2021 with the introduction of the airline retailing maturity (ARM) index.

The NDC Foundation Standard was first approved by the IATA Passenger Services Conference (PSC) during a meeting at the World Passenger Symposium in Abu Dhabi in 2012.

'A Foundation Standard for the NDC is the first step to enabling the development of open XML standards that will be available for all interested providers to work on and develop their own offerings. At the World Passenger Symposium, participants have agreed that the industry standard is paving the way for the future, and the time is right to move to a new model'

Aleks Popovich, IATA Senior Vice President, Industry Distribution and Financial Services.

But the announcement was just the beginning as more coordination, technical details, and legislation approvals were needed.

IATA continued the development of NDC and worked with a few airlines on early-stage pilots using XML. In 2014, the US Department of Transportation finally approved the NDC Standard. This led to more airlines committing to test pilots – 14 confirmed before the end of the year – demonstrating progress and interest in NDC.

Certification

IATA provided a simple set of NDC schemas in order for airlines and aggregators to start building out their roadmaps with NDC in mind. But there was no easy way to identify who was implementing what capabilities and which schema they were using as further versions were introduced.

So in 2015, IATA announced three levels of certification:

• Level 1: Basic
  • Covers implementation using past and current NDC schemas with a limited scope such as sales of ancillaries post-booking.
• Level 2: Offer Management
  • Covers implementation with more extensive use of the shopping/offer management API.
• Level 3: Offer and Order Management
  • Covers implementation with both offer and order management and where the airline takes full control of shopping as well as booking, payment and ticketing.

IATA offered certification for free for initial applicants to pilot the process. In mid-2016, the official NDC certification registry became live.

The purpose of certification was to confirm the scope and level of ability to receive and send NDC messages for travel agents, aggregators, IT suppliers, and airlines. The registry aspect of certification ensured the information was public allowing for further transparency and visibility on those who were offering NDC capabilities.

Outside of validation and transparency, certification was also to help airlines identify aggregators who were looking to modernise distribution – and for aggregators to identify airline partnerships that would unlock capabilities for the future.

Lastly, by monitoring capabilities in a standardised way, IATA hoped to legitimise NDC and accelerate NDC adoption as more organisations get added to the registry, others wouldn't want to be left behind.

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NDC Leaderboard

In 2017, a number of airlines were committed to running pilots and implementing NDC, however, they faced challenges in growing order volumes. IATA saw an opportunity to identify airlines dedicated to NDC adoption and work with them to scale orders so they introduced the NDC Leaderboard.

The purpose of the Leaderboard was to tackle the obstacles of mass adoption, understand the benefits, and share the learnings for better efficiencies to encourage more airlines to adopt NDC.

IATA invited airlines that wanted to grow their NDC volumes rapidly to join the Leaderboard, which by 2019 included 22 airlines that committed to having at least 20% of their sales powered by an NDC API.

Note: With the introduction of the ARM index in 2021, the NDC Leaderboard is no longer active.

NDC@Scale

In 2018, three years after the launch of certification levels, there were still challenges for NDC including education, end-to-end capabilities, and support.

As airlines continued to struggle to reach high volumes of NDC transactions and support the end-to-end management of an order, IATA continued to develop best practices to help implement NDC at scale.

This led to defining a set of criteria that demonstrated which airlines, aggregators, and travel sellers had a minimum set of recognised capabilities enabled to support (and drive) a higher volume of NDC transactions.

To increase transparency and the level of detail in what airlines, providers and travel sellers could offer, IATA launched two new levels of certification: NDC Level 4 and NDC@Scale.

• Level 4: Full Offer and Order Management

  • Covers implementation with full offer and order management, which includes shopping, booking and a limited range of post-booking processes such as changes and cancellations.

• NDC@Scale (for airlines)

  • Covers evaluation on four dimensions of criteria: Technical Setup, Organization Setup, Use Cases, and Capabilities

ONE Order

After the two new levels of certification were introduced to improve transparency and encourage scale, there was a focus on removing the challenges and inefficiencies facing the industry around order creation and management. To simplify the systems and processes used and to improve communication, IATA introduced ONE Order and the ONE Order certification registry. Both airlines and service providers could complete a certification programme to be recognised on the ONE Order registry.

'ONE Order aims to modernise the order management process in the airline industry. The ONE Order standard creates a single integrated customer record to streamline fulfilment, delivery, and accounting processes'.

IATA

Note: With the introduction of the ARM index in 2021, ONE Order was no longer a separate certification process as all details are included in the index.

NDC Matchmaker

IATA also launched NDC Matchmaker in 2019. The travel buyer community was looking for ways to better understand the capabilities available from NDC partners and found it difficult as there was no platform available to assist with comparison.

IATA developed NDC Matchmaker as a tool for airlines, travel sellers and content aggregators to search, compare, and connect with NDC partners.

The purpose of NDC Matchmaker was to bring more transparency for companies working together on NDC implementation and to help travel sellers understand what was available with a particular NDC programme. This was the next stage to further NDC as adoption as interest continued to grow.

Note: With the introduction of the ARM index in 2021, NDC Matchmaker has been deprecated.

In 2020, COVID-19 sent the industry into shock. IATA didn't announce any further NDC changes until October 2021 when the Airline Retailing Maturity (ARM) index was launched, joining together the initiatives from the past decade and streamlining them into one programme.

How do you access NDC content?

There are two ways to access NDC content:

1. Build direct connections with airlines one at a time
2. Work with NDC aggregators, such as a technology provider, who handle the individual airline connections for you

What are direct airline connections?

A direct connection is when a technology provider or travel seller integrates with an airline's reservation system rather than going through a third party like a GDS. For most travel sellers, building direct integrations will not be a great option. Each integration takes three to six months to build and needs to be maintained. Sellers need to negotiate contract terms and may be faced with long wait times before starting an integration. One example of an airline's direct integration program is Qatar Airways' Oryx Direct.

What are NDC aggregators?

In travel, the term aggregator is commonly used for companies that pull a variety of options together from multiple sources and surface them in a single place for the end-user. Or in the context of flights, they are companies that connect with many airline carriers and bring the content together into a single platform.

NDC is open, meaning that any third party, IT provider, or intermediary can implement and leverage the standard. Since it's fully accessible, the world of distribution has opened up to new players, especially aggregators.

Travel sellers can select a technology provider as their NDC aggregator to allow for a single integration and avoid managing ongoing maintenance for each airline. There are two types of providers today:

• Traditional GDSs including Amadeus, Sabre, and Travelport
• New distribution players like Travelfusion, AirGateway, and Duffel

Why are there more aggregators for NDC?

It takes a lot of complexity and time commitment to integrate and maintain connections with every airline. This is made more difficult when not all airlines use the same standard, for example, low-cost carriers typically develop their own integration standards. With an aggregator, you can offload the heavy lifting and get access to lots of airlines, including NDC airlines, on a single platform.

As NDC is an open standard using the more widely used XML, the barrier to entry is lower for new aggregators to enter the industry and connect with airlines. As new airlines start using NDC and develop their capabilities, aggregators have more opportunities to provide better experiences to travel seller customers.

What about Duffel?

With Duffel, you can build one integration and get access to NDC content from 30+ airlines, including British Airways, Lufthansa, Emirates, and American Airlines. Once you're connected, you can turn on new airlines complete with ancillaries in one click. The developer-first platform with embeddable components and comprehensive documentation means you can finish your integration in days instead of spending months integrating with each airline. We also handle accreditation and ticketing authority for you if you aren't accredited with IATA or ARC.

Interested in selling flights online? Get started quickly and easily with Duffel today.