DRIVING NDC ADOPTION:

WORKING WITH TRAVEL

PARTNERS TO BUILD A
SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya
2 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

NDC adoption
strategies
Do you need help encouraging travel
partners to migrate to NDC platforms?

GROW YOUR NDC SUCCESS

Are you considering implementing IATA NDC? Do you want to grow the success of your strategy?
Do you need help encouraging travel partners to migrate to NDC platforms?

If you’ve answered yes to any of these questions, read on as I look at some of the most common
and potent adoption strategies and evaluate what works best for an airline.

A successful NDC adoption strategy convinces travel

partners to engage positively with an airline to sell more
and different content through new and richer channels.
During the more than 10-year NDC journey, pioneer airlines
have pursued the following strategies to encourage
travel partners to move from consuming content through
the Global Distribution Systems (GDS) to NDC:

DANGLING THE CARROT

WEILDING THE STICK

WHOLESALE MODEL

ADOPTION LEVERS

Bill Cavendish
Global Business Development, Accelya
3 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

DANGLING THE CARROT

Offer a reward
Dangling a carrot refers to persuading someone to do something by offering a reward.
With this approach, airlines attract sellers by offering exclusive content and packages (often fare
brands) through NDC channels. This creates a win-win-win for the airline agent-customer.

Agents are incentivized to use airline-controlled channels, which for some airlines, even include
NDC through the GDS. Carrots come in many forms:

z Discounting NDC channel products to create exclusive offers.

z Content differentiation via fares/bundles/fare brands/continuous pricing exclusive to NDC.

z Commercial carrots such as incentives.

z Airlines have also aligned their back-end commission structures to the channel by providing
higher rebates for NDC growth.

Continuous and dynamic pricing

Continuous and dynamic pricing are examples of content differentiation. Customers are
offered prices that will maximize the total contribution of each shopping session.

These strategies are difficult without NDC transformation, as airlines need to calculate
the optimal fare based on factors such as the current shopping context and operating
environment.

This shortcoming leaves valuable revenue on the table.

WIELDING THE STICK

Remove incentives
Wielding the stick is the opposite of dangling the carrot, as it’s less persuasive and more discouraging.
Additional charges or other devices are used to disincentivize travel sellers’ use of non-NDC channels.

This approach broadly focuses on two variations: adding surcharges and/or removing content from
the GDS. Both aim to overcome the higher traditional distribution costs by reallocating the cost and
encouraging sales in the airline’s channel of choice.

Surcharges and content removal can also incentivize migration to other channels, such as the airline’s
website and mobile apps. By correlating the offer and the channel, airlines using the stick approach
communicate a clear message to travel sellers: offers done through traditional channels can come with
a high distribution cost.
4 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

BACK TO THE FUTURE

The wholesale model returns
Now that the GDSs are becoming NDC-ready, the wholesale model, a tried-but-true classic from
long ago, is making a comeback.

This model places the power firmly in the hands of the travel agent, who decides from whom and
under what terms to source NDC content. The airline provides the agent with its content – and perhaps
an incentive – and it’s then up to the agent to select an aggregator (GDS or third party).

At Accelya, we’re proud to have helped many airlines enact their distribution freedom strategies,
most of which have used more than one of the concepts I’ve discussed in this commercial toolkit.

THE WHOLESALE MODEL

NDC via the GDS
Some airlines are introducing modernized versions of the wholesale model to drive their NDC adoption.
NDC via the GDS is a compelling value proposition for many airlines. After all, the GDSs already have
global access to the agent desktop. The strategy’s viability depends on getting the right mix of content
differentiation and GDS readiness.
5 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

WHAT STRATEGY WORKS BEST?

Levers to drive NDC adoption
Tye Radcliffe, Accelya’s SVP of Product Strategy for the Order group, gave me this excellent summary
of NDC adoption strategies, which can involve carrots, sticks, wholesale, or a mixture of all the models.

What adoption strategy works best? Well, it depends on your airline. Each approach employs “levers”
of content differentiation and/or commercial terms to achieve the desired results.

In the table on the below, you can see Tye’s evaluation of each adoption strategy, looking at its pros
and cons.

Carrot Stick Content Commercial Pros Cons

Lowest fares Revenue-impacting until

Yes Yes Drives NDC adoption
not in GDS adoption occurs

Ancilliaries Drive NDC adoption

Revenue-impacting until
not filed Yes Yes Yes (especially with
adoption occurs
ATPCO commission)

Surcharge Drives NDC adoption

Revenue-impacting until
GDS Yes Yes better with content
adoption occurs
segments differentiation

Pay NDC
Drives adoption to help Cost increase unless offset
segment Yes Yes
offset GDS incentives by lower GDS fees
incentives

Drives GDS adoption; Requires end-to-end

Continuous
Yes Yes impossible via legacy settlement/complex
pricing
tech servicing

Drives GDS adoption; Requires end-to-end

Dynamic
Yes Yes impossible via legacy settlement/complex
fare brands
tech servicing

Dynamic Drives GDS adoption;

ancilliary Yes Yes impossible via legacy Uses ticket + EMD
bundling tech

Likely drives most NDC Can limit commercial

NDC via
Yes Yes Varies Varies volume, but only if the benefits of NDC if not right
the GDS
content differs mix of content and readiness

Commission Drives NDC adoption;

Yes Yes Yes Can be a cost increase
differentiation offsets GDS incentives

Discounts on Drives NDC adoption; Revenue-impacting until

Yes Yes
NDC fares offsets GDS incentives adoption occurs

Agency Drives NDC adoption;

High degree of readiness
wholesale Yes Yes Yes Yes requires content
required
model differentiation
6 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

HAWAIIAN AIRLINES
A well-rounded approach
Hawaiian Airlines is an advocate of using a well-rounded approach for its NDC adoption and works with
a combination of the available strategies. Last year, the US airline launched an NDC centric distribution
strategy that encompasses a range of strategies to increase Hawaiian Airlines’ NDC adoption:

z The sale of interisland point-to-point fares was withdrawn from legacy channels.

z Hawaiian Airlines is the first North American carrier to drive NDC adoption by offering unique content
and implementing a distribution surcharge.

z The Distribution Cost Recovery recoups any costs incurred by agents using legacy channels.
7 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

Communication
and partnership
How do you ensure your partners
are on board with your NDC strategy?

PERSUADING AGENCIES
Having decided on your adoption strategy, bringing your partners along with you is essential.
But remember, the change to NDC is not necessarily plain sailing for travel agents.

Persuading agencies to go on the NDC journey with you is more than about carrots and sticks.
It’s about demonstrating that the change benefits them. Being upfront and straightforward about
the changes you’re making is crucial. Having a plan that considers the broader narrative of your airline
goals takes time, and the earlier you begin communicating, the sooner travel sellers will adjust.

SIMPLE AND EFFECTIVE MESSAGES

Airlines need to develop simple but effective messages that show a path to mutual success.
Be sure you’re ready with training, references, and support specific to your airline’s NDC program.

Demonstrate your understanding of travel seller needs and the high value you place on their
time/expertise. Listen to feedback and adapt your agency program to align closely with what your
travel partners tell you.

The good news is that plenty of great case studies in the market show that if you get it right,
NDC brings benefit across the value chain. Taking your travel partners with you is essential.
8 DRIVING NDC ADOPTION:
WORKING WITH TRAVEL PARTNERS
TO BUILD A SUCCESSFUL PARTNERSHIP
A commercial toolkit by Accelya

Conclusion
Expect acceleration
on your journey to NDC

EXPECT ACCELERATION
NDC is here to stay, and as with most technological change, we should expect it to accelerate
as the availability of compelling NDC-only content continues to grow. Airline leaders are already
taking advantage of NDC’s profitability potential, using their freedom to create the right
distribution portfolio for their strategy.

In our experience, greater NDC adoption increases an airline’s time-to-market and innovation
possibilities and gives the customers and partners more choices.

Ultimately, the decision of which strategy makes sense for a particular airline will vary depending
on the airline’s brand strategy, competitive position, technological independence, and the maturity
of its NDC solution.

THERE’S NO TIME TO WASTE

When airlines ask themselves how to realize some of the NDC revenue benefits, lower their traditional
distribution bill, and gain more control of their content, the answer lies in an effective adoption and
distribution strategy.

z Get innovative new content to market quickly through effective technology.

z Build win-win partnerships with sellers that liberate value across the chain.

z Add continuous and dynamic pricing to the picture to employ a smooth pricing curve
and create value beyond a rules-based approach to fare optimization. This is difficult
without NDC transformation!
 w3.accelya.com
marketing@accelya.com