In this article:
- What is Direct Connect?
- IATA's New Distribution Capability
- How Blue Sky Booking Can Help
What is Direct Connect?
In “The Guide to Global Distribution Part 1 : GDS” we learned how Global Distribution Systems have dominated airline distribution since the 1960s. As technology advances, new ways to distribute fares and other travel products have gradually been developed and implemented. One of the fastest growing distribution technologies is the Direct Connect model.
Airlines, online and traditional travel agents, hotels, and other travel companies have been beholden to the major GDSs for decades. Connecting directly to each other using APIs, or “application programming interfaces,” has been an option for some time but presented problems of it’s own. How would a travel agent connect to all the possible travel vendors directly? How could they sort through the mountains of schedule, fare, and through-fare options available in good time? Enter the aggregator.
Travelfusion, an aggregator founded in 1999, is one of the leading companies today doing the work of connecting hundreds of airlines and travel agents, providing an interface to search for paths through millions of schedules, routes, and fares to create complete, bookable itineraries with a single, unified price in a single currency. This ability to link flights without a GDS-dependent interline agreement between airlines is a powerful new tool for travel agents looking to build itineraries and connect travelers through routes that were previously out of reach.
"This ability to link flights without a GDS-dependent interline agreement between airlines is a powerful new tool for travel agents looking to build itineraries"
Bypassing the GDSs is an exciting development for airlines too, especially those targeting leisure travel with competitive fares. Since GDSs still command the lion’s share of distribution markets, corporate travelers generally use GDSs as a rule, looking for the fastest, most direct route on the most reputable national carriers to ensure their trip goes off without a hitch. The low and ultra-low cost carriers marketing to price conscious travelers would rather avoid the fee-laden GDS distribution options, with Southwest Airlines famously refraining from any GDS distribution for 52 years, since it's inception in 1967 until 2019, when it finally gave in. Airlines hoping to avoid the GDS can opt instead to connect directly to aggregators like Travelfusion or encourage travelers to visit their website directly.
IATA's New Distribution Capability
Another GDS alternative is the New Distribution Capability, or “NDC.” The NDC is an XML-based data transmission standard that was launched by the International Air Transport Association (IATA) in 2015. Although airlines have been slow to adopt NDC, the COVID-19 crisis has accelerated implementation and it is viewed as an important option to consider for airlines trying to recover profitability.
The NDC aims to solve problems that have plague airlines since the earliest days of distribution, like being restricted to 26 fare buckets as opposed to offering dynamic or continuous fares, or being unable to offer any ancillary products (an important revenue source for many low cost carriers) through traditional distribution. But it's IATA’s vision of airlines as bona fide travel e-commerce platforms that explains why airlines are so excited about NDC. By removing GDSs from the middle-man position, airlines will have access to more detailed information about each traveler. Using this data, airlines can build retailing power akin to that of Amazon or Netflix, offering tailored travel packages custom-built for each individual traveler in a similar fashion to how the major retailers builds recommendations for purchases or suggested viewing. This is a powerful incentive for airlines to put effort into NDC adoption, and many airlines are choosing to invest in NDC to future-proof themselves.
"IATA’s vision of airlines as bona fide travel e-commerce platforms explains why airlines are so excited about NDC."
Travelfusion was an early adopter of NDC, and their CEO estimates they handle “about 50% of NDC bookable traffic” connecting over 40 airlines with NDC capable OTAs and other booking agencies. Thanks to the enhanced merchandising capability NDC promises to bestow on Covid-beleaguered airlines, it’s safe to say the genie has been let out of the bottle.
How Blue Sky Booking Can Help
Blue Sky Booking’s integration with Travelfusion’s industry leading API system links your airline to the powerful Direct Connect model that can help your airline distribute today, and to the promising world of NDC implementation tomorrow.
Contact us today to find out more about future-proofing your airline.