Demystifying NDC: A Glossary for Grasping the Lingo of New Distribution Capability

Confused by some of the technical terms associated with New Distribution Capability (NDC)? Use this glossary to get up to speed on the jargon linked to the airline industry’s new data exchange technology.

Aggregator: Travel aggregators are travel technology companies that gather information from various travel providers, such as airlines, hotels, and car rental companies, and present it in a consolidated format via an API that travel sellers can consume and expose to their users. These aggregators allow travelers to compare prices, and book flights, accommodations, and other travel services, without the agent having to create all individual connections themselves.

Ancillary Services: The extra perks and services airlines offer (e.g., seat selection, priority boarding, checked baggage, etc.) that may be included in the main offer or as separate services; NDC aims to make it simple for airlines to sell these extras through travel agents, not just on their websites.

Application Programming Interface (API): A way for two or more computer programs to communicate with each other. An interface that translates a command into an action and returns a response. A document or standard that describes how to build or use such connections is called an API Specification. From an NDC perspective, airlines are using newly developed APIs for data transfer instead of EDIFACT.

API Schema: An API schema defines the structure, types, and constraints of the data exchanged between a client and a server. It specifies the endpoints, request parameters, response structure, and other details that allow developers to understand how to interact with the API effectively by providing a clear blueprint to ensure consistency, reliability, and easier maintenance of the API.  IATA continues to release new versions of NDC schemas, with 21.3 being the latest one.

Airline Tariff Publishing Company (ATPCo): A technology provider used by the airline industry to collect and distribute fare, tax and schedule information to the travel industry. ATPCo standardises, normalises and automates the distribution of airline content to improve the overall efficiency of the distribution processes.

Bundles: Airline bundles are a combination of popular add-ons or services that are offered for a discounted price.  Fares are combined with one or more ancillary products, such as pre-paid checked bags, extra legroom seats, in-flight wifi, etc., which is more cost-effective than purchasing these items a-la-carte.

Continuous Pricing: Continuous pricing is a newer, more sophisticated version of dynamic pricing that allows airlines to adjust prices in real time based upon supply and demand, and customers’ willingness to pay. This allows airlines to create an unlimited number of price points that offer a more granular and targeted range of fares and bundles to the traveller / corporation and to adapt quickly to changing market conditions.

Dynamic Pricing: Dynamic Pricing has been used by airlines for many years to regularly adjust and control prices using contextual information like # days before departure and how full a flight is, to improve revenues on any given flight.

Direct vs Indirect Channels: Airlines offer NDC content through an NDC API connection via: (1) airline website (direct channel) and (2) third-party aggregators, e.g., GDS (indirect channel).

Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT): Text only method of data transfer. Long established in the travel industry but unable to handle rich media like images or videos. Has been the travel industry “backbone” for over 30 years. Helped the industry to globalize and continues to support billions of transactions a day.

Global Distribution System (GDS): Global distribution system; a computerized network used by travel agencies and online booking platforms to access and book travel-related services, such as airline reservations, hotel accommodations, and car rentals.

International Air Tariff Associations (IATA): Air industry governing body that promotes standardization and regulatory compliance amongst the airline industry. Has created NDC schema at the request of its airline participants.

Minimum Marketable Product (MMP): Created by Amex GBT and describes business travel use cases to aid airlines, distribution systems, and online booking tools in meeting managed travel program needs. We published our MMP framework in June 2023 so that more airlines and technology companies can use it to deliver NDC content for managed travel programs, and to raise awareness with our clients.

Modern Airline Retailing: IATA announced the establishment of the Modern Airline Retailing program to advance customer centricity and value creation in the airline industry. Some airlines are looking at Modern Airline Retailing as a method of unleashing value creation opportunities (for themselves) by transforming airline distribution to a system of “Offers and Orders” that parallels what other retailers use.

New Distribution Capability (NDC): An alternative data structure to EDIFACT, which allows airlines to distribute their content differently so they can create differentiated and relevant offers to customers (see Modern Airline Retailing, Continuous Pricing, Offers & Orders).

Next Generation Storefront (NGS): ATPCo’s NGS data and standards are driving the future of shop-by-attribute and comparison shopping. Any channel that uses ATPCo data and standards to evolve beyond lowest fare or single product flight shopping, and enables consumers to shop by attribute, is an Next gen storefront channel.

Offers & Orders: Is an industry-led initiative intended to simplify the airline reservation, delivery, and accounting systems by gradually phasing out the current booking (PNRs) and ticketing records (e-tickets and electronic miscellaneous documents, or EMDs).^{1 1 IATA 2024}

Rich Content: More detailed, visual information that airlines can provide to travel sellers and other intermediaries to promote their product offerings; goes beyond traditional fare and schedule information to include videos, images, seat maps, comprehensive descriptions, etc., for an enhanced air shopping experience.

XML: Stands for Extensible Markup Language: a newer data exchange language that supports rich content and retailing. NDC uses XML to enhance how airlines promote and sell their products.