IATA’S NEW DISTRIBUTION CAPABILITY (NDC) 565 II. NDC FROM THE STANDPOINT OF EU COMPETITION RULES II.1. Reasons for the recent change of emphasis in air ticket distribution As mentioned above, the current pre-eminence of GDS in air tickets distribution is indisputable. However, since the 1990s, the Internet and the new information technologies enhanced the distribution capabilities of airline companies, which tended to depart from the GDS primacy. Airlines sought alternative cost-effective distribution channels to increase their sales. Thus, they developed direct channels on the Internet, setting up their own reservation websites to sell tickets and, eventually, other services linked to the carriage, directly to the passengers. Therefore, the need for intermediaries became less evident; as well as the incentive paid to them for each sale made through a GDS. At the same time, the travellers’ behaviour changed significantly when air tickets and air carriers linked to booking had to adapt themselves to take into consideration such a transformation and their passengers’ new expectations. With the development in particular of low cost airlines, air carriers decided to offer unbundled services to meet these new expectations. In other words, nowadays, airlines offer to their passengers “ancillary services”, in addition to the carriage itself – by opposition to an all-inclusive ticket, (with services such as seat selection, extra bag, Wi-Fi on board, catering, early boarding, lounge access, etc.), for an extra sum to the ticket price. It nevertheless seemed like airlines’ ancillary services were not offered or offered in a limited way through GDS, so that agents were not in a position to offer any ancillary services to their customers – and airlines lost sales on such services – or they sometimes purchased for their customers such services outside the GDS – which was not incentivised. II.2. The IATA Resolution 787 In this context, IATA decided to remedy these shortcomings and to introduce a new distribution model, the New Distribution Capability (NDC) to meet passengers’ new behaviours. In brief, NDC is presented as an evolution in airlines tickets distribution by facilitating content access to the market through an XML based transmission standard. This was launched by IATA, in 2012, under its Resolution 787. The purpose of NDC is to offer to agents, aggregators, other airlines (interline airlines) and consumers access to all ancillary products and services of airlines, enabling them to personalise their offers, irrespective of the distribution channels. A Dynamic Airline Shopping Engine Application
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