IAG’s decision to push more unique fares and more content through NDC highlights how the digital channel is already driving distribution change

The power of NDC (New Distribution Capability) has become more evident with the recent news from International Airlines Group (IAG) that its two biggest airline brands, British Airways and Iberia, will boost their content as they seek to “drive mass adoption of NDC”. This will include unique fare offers across domestic, short haul and an increasing number of long haul routes, including the competitive North Atlantic market.

NDC is essentially an XML standard created by the International Air Transport Association (IATA) to allow airline service providers to deliver rich content and ancillaries to their customers. It allows for bringing rich content and ancillaries directly to online travel agencies, GDSs, and travel management companies via a set of standard APIs that are much more flexible and updatable than the dated current protocols.

British Airways and Iberia are already using NDC to deliver additional price points on short haul and some long haul routes, which IAG’s director strategy Alistair Hartley says are showing encouraging adoption levels. Speaking at IAG’s Capital Markets Day 2019 presentation, he said: “We are seeing, and continue to be encouraged by the adoption rates improvements of NDC in each of British Airways and Iberia” with NDC adoption over the past 12 months at British Airways increasing three fold, while in increasing seven fold at Iberia.

“We are going to continue to drive this [adoption, developing] unique content via these digital channels through NDC”. He listed two measures to drive adoption: Three times more price points for long haul services, including North Atlantic and exclusive hand bag only fares. Mr Hartley classified the exclusive hand bag only fares as “one of the key elements differentiating the content through this channels that is going to continue to drive the adoption in this space”

The additional price points will provide the airline’s trade partners access to a greater number of fares when booking through NDC. From mid-Dec-2019, Iberia will gradually offer its basic fares only through NDC solutions, including the IAG booking portal, starting with selected domestic routes. British Airways will follow on European routes in 2020.

This could see all the lowest short-haul fares offered from the airlines being completely removed from conventional indirect distribution channels such as global distribution systems and offered exclusively through NDC connections. And IAG is not alone and is just one of a number of airline groupings that are already using NDC in this manner, in the process changing the distribution space forever.

Peter Muller, International Board Director of global travel management company company, ATPI, said of the IAG developments ‘This comes as no surprise. NDC has been evolving in Europe for several years and we are now starting to see the introduction into the Southern Hemisphere through the likes of Qantas. It’s business as usual for us, we have the capability to deliver the content and it’s an exciting time for the travel industry, both in the business and leisure sectors’