New Distribution Capability (NDC) is the new IATA industry standard for messaging, that allows airlines to communicate offers directly to distribution partners, but what exactly is an ‘offer’?
A useful way of defining an offer in the context of NDC would be 'The presentation of a product or service's details, along with its price and conditions, to a prospective customer who can then choose to accept or reject it'.
For example, if you plan to buy a new TV the store you visit may offer it with the option to be delivered and installed in your house ready for immediate use. The vendor has put together their product and services together with price and presented it to you. This set of information is known as an OFFER. You can then choose the option you like and confirm your purchase. Alternatively, you can go to other suppliers who will make similar (or different) offers for you to compare and select from.
This kind of bundled offer is great for the consumer, as you get the service you want, and good for the vendor, as they are able to maximise profitability by charging extra for the convenience of delivery and installation.
So how does this concept of an offer relate to Airlines and their product and services?
Today, airlines prepare their flight schedule and publish it via a 3rd party (e.g. OAG). Alongside this, they prepare sets of fares for the Reservation Booking Designator (RBD) and file them to another 3rd party service provider ATPCO. Together with real time seat availability, this published data is then used to prepare an offer.
The offer may include extras on top of the flight itself, such as additional bags, meals or lounge access.
So, when a potential passenger makes a request to the airline, many IT systems work together to create an offer, or set of offers. However, in case of the request via Travel Agent using a GDS, such offers are prepared by the GDS and not the airline. It's currently reasonably easy for airlines to create offers on their own websites, but much more difficult to share them with other airlines or travel agents
If IATA NDC standards are implemented by an airline, detailed offers with prices and offer conditions can be easily prepared by the airline and the final product can be distributed to all partners for a consistent product offering.
Just like our TV store example, this is good for the airline customer, as it offers them the choices they desire, and it's also good for the airline as it allows them to increase the profitability of each passenger mile. It can also differentiate that airline from its competitors in the marketplace.