THE NEW DISTRIBUTION CAPABILITY (NDC) 633 5.3. To summarise revenue and cost drivers in a nutshell Key revenue drivers: • Product attributes (differentiation): ability to show competitive features that may be unique to the offer and therefore drive purchase decisions • Fare Families: displaying multiple price points, with increased value, may drive “up sells” • Ancillaries: displaying additional products (e.g. lounge access) may drive purchase decision • Dynamic Pricing conductive to modern offer Management • Enhancing loyalty with personalised pricing offers (e.g. OMS connects to the Frequent Flyer database to enhance an offer by tier or service experience) • Rich content to inspire consumers • Increasing reach: tapping new sales channels both geographically and digitally Key cost drivers: • Moving from a 40-year old legacy infrastructure to an Internet environment will make changes much more cost effective • NDC should facilitate new entrants, which should increase competition and drive down costs • NDC also provides the airline with cost reduction opportunities in the areas of ticketing, payment and revenue accounting, as well as back-office in general • NDC improves revenue integrity (eliminating most of costs to manage fare auditing) • In the longer term, NDC facilitates the airline to decide whether and how to accept a payment method • Performing real time checks in the BSP on travel agency sales should cut revenue losses from agency defaults etc. 6. DEEP DIVE INTO NDC TECHNOLOGY 6.1 NDC Platform overview: introducing “Offer and Order Management” notions “Offer Management” refers to the capability of airlines to create and return priced offers in response to shopping requests from travel agents. Offer
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