In the ten years since NDC was launched, early adopters have deployed many strategies to encourage travel sellers to move from consuming content through the GDS to NDC. Airline commercial leaders have rewarded travel sellers for aligning with their distribution goals by using sticks (such as removal of access to certain content) and/or carrots (segment fees, lower pricing). As a result of this alignment, they have been able to drive value from travel sellers more effectively.
However, the airlines’ challenge is ensuring travel sellers are incentivized to move sales volume to non-legacy channels and deliver on growth commitments. Let’s look at what concerns airline leaders with distribution and sales goals at the forefront of their objectives:
- Distribution is no longer a separate negotiation with travel sellers: Making distribution goals part of commercial discussions is vital to NDC adoption.
- Aligning distribution and sales goals requires change management: Empowering sales to manage negotiations requires upskilling and alignment across departments.
- Understanding channel profitability is vital: To make strategic decisions around where and when to deploy incentive dollars requires more than just understanding and measuring the cost of sale associated with budget achievement and yield.
- Access to content will rapidly become the number one incentive: As NDC continues to mature and more airlines use merchandising, the products travel sellers can retail will become their defining proposition. Using this to stimulate growth and ancillary sales will become a central tenet of an airline’s commercial strategy.
A frustration voiced by many airline leaders is that addressing these challenges requires improved supporting technology. New sales planning and incentive management tools, backed by data science, should help airline leaders steer travel sellers toward preferred modes of distribution and propel growth.