Air Canada to launch NDC program in June. SVP Mark Nasr explains what this means

Air Canada is launching a New Distribution Capabilities (NDC) program, which will feature new benefits, expanded content and additional trade support for agencies and travel buyers.

The program promises a “competitive alternative to legacy distribution,” according to a news release on Wednesday (April 19), giving travel agents access to expanded Air Canada inventory, fares, ancillary services, ticketing, and digital products.

For buyers and travellers, NDC technology means their preferred agencies can now offer a broader range of Air Canada travel options and services at the best possible prices, improving competitiveness and the customer experience.

“We've made an NDC connection that is stronger – particularly in the ability to not just sell and shop, but most importantly, to be able to support bookings, post-purchase,” Mark Nasr, senior vice-president of products, marketing, and eCommerce at Air Canada, told PAX, ahead of the announcement.  

For example, NDC improves processes around change exchanges, cancellations, refunds, servicing, and seat assignments, offering an efficient shopping experience for retail fare products, as well as the elimination of select debit memos, Air Canada says.

Continuous pricing, as well as the addition of Flight Pass, is also planned for 2023.

“We recognize the time and effort required by agency partners to transition to new technology and we are committed to supporting them. Their feedback to-date has served to shape our implementation plans,” stated Lisa Pierce, vice-president, global sales and Air Canada Vacations at Air Canada. 

“For example, our focus on introducing new content on NDC rather than removing existing content from GDS EDIFACT channels is a direct result of agency partner inputs. We will continue to actively listen to feedback, and we’ll use it to shape our policies and roadmap of future products and features enabled by NDC.”  

New models for travel agencies

Air Canada will have new models for travel agencies to be able to connect with NDC through various options, each designed to suit different business models – ranging from API integration and a free web-based tool to a catalogue of certified technology providers and a GDS-based solution.

Some agencies will, for example, be able to directly consume Air Canada’s API and build their own front ends on top of the API, Nasr said.

For smaller agencies that have less Air Canada content, there’s a new product called “Air Canada Connects,” where agents can log into an internet site and have an expert version of Air Canada’s booking engine and servicing, through an NDC connection.

As announced earlier this month, Air Canada already has NDC connectivity, in Amadeus, as a GDS.

“Even a very traditional type of workflow – a travel desktop provided by the Amadeus GDS – will support Air Canada's NDC content,” Nasr told PAX, noting how his team has the capability of adding more GDS connections.

The unrolling of NDC content was strategic as Air Canada spent the past 18 months building the technology, and consulting with agencies and customers, before officially announcing it.

It will be fully available on June 14, giving businesses time to adapt to the new process.

Additional content immediately available on NDC technology includes domestic Basic fares, but the best available seat inventory and discounted ancillary pricing becomes available in June.

“We have to draw a line in the sand”

The decision to expand content was made to ensure that agencies could access Air Canada’s full range of offers, Nasr explained.

Take a promo code that offers 15 per cent off a ticket, for example.

“We do those promotions all the time, but today, there's no opportunity to take full advantage of those offers,” Nasr said. “We truly want the content and the experience, via the trade, to be equivalent to what we can offer directly.”

Out with the old, in with the new. Air Canada already has important products that it can’t support via EDIFACT (the old-school technology), which Nasr believes is creating a growing disparity.

“We have to draw a line in the sand,” he said. “It's incumbent on us to make sure agents are prepared for what's ahead. Because we don't want a reality where the capabilities, and the Air Canada product and service portfolio that we offer for direct channels, get too far apart. I would argue we are already there.”

“So, we're going to prepare the trade community for the technology and product changes that are going to happen ahead.”

Avoiding disruptions

Unlike the hurried pace some U.S.-based airlines are taking to implement NDC-enabled content, it appears Air Canada is being conscious of avoiding a hard stop in its existing systems.

“We want to do this in a way that’s not disruptive,” Nasr said.

And how does Air Canada intend to do that? By offering options, Nasr explained, “one of which will work for everyone, over time.”

“We know it will take the trade time to do their integrations, or switch tools, or modify their arrangements for their GDS providers,” he said.

A transitionary period has been implemented. Firstly, Air Canada is giving two months’ notice (again, the strategy won't be effective until June 14).

And secondly, Air Canada will not pull any content that it has in EDIFACT right now “for a meaningful period of time,” Nasr said, suggesting it could be active for “many months, if not longer.”

“Agencies will be able to transact in their current systems with their current content. They'll miss the new stuff, which we’ll only be able to do via NDC. But they won't lose critical content that they have today,” he said.

New distribution surcharge

Finally, as part of this modernization, Air Canada will introduce a distribution surcharge for bookings that occur via the EDIFACT channel.

This means any booking made via any GDSs using legacy technology will face a surcharge – which will be in a range of $20 to $30 USD, assessed per ticket, depending on the GDS – to be collected from the customer.

Air Canada is calling this a Distribution Cost Recovery (DCR).

It will be applicable to all tickets issued globally via GDS EDIFACT channels effective June 14.

It does not apply to bookings made via any of Air Canada’s NDC connection options including NDC-sourced content in a GDS solution, as well as through Air Canada’s other direct booking channels such as aircanada.com, aircanada.com/agents, Air Canada for Business, and the Air Canada mobile app, or group bookings.

“The DCR can be avoided by using any one of the NDC options, including our Amadeus-NDC connection,” Nasr said.

It’s certainly one incentive to use NDC. In fact, Air Canada will be introducing an incentive for agencies (that the airline will pay) if they connect to NDC directly or via one of the company’s aggregators.

“It will be extra compensation on top of any existing programs we have that we’ll pay to an agency should that agency integrate directly with us, or via one of our aggregator offerings,” Nasr said.

Out with the old

This modernization is really about going from something very basic to technology that offers flexibility and richness.

Nasr compares it to the way text messages have evolved over the past ten years. In the beginning, texts were basic and limited, whereas today, users can send rich images and videos.

Within the context of Air Canada, the strategy transitions the airline from EDIFACT – technology first introduced in the 1970s that let airlines communicate with GDS systems – to an NDC connection, which uses an “XML API.”

What does that mean, exactly?  

EDIFACT, for one, doesn't allow product differentiation, dynamic pricing, personalization or rich content, Nasr explained.

Flight paths, promo codes, cancel for any reason – all of those things can’t be done in a meaningful way on the old system.  

They can, however, be done via NDC.

The switch-over will also create new opportunities for agencies to engage with Aeroplan (which Nasr is also president of).

“Today, there is no Aeroplan offering via an agency,” Nasr said. “In the future, we'll have the capability of offering Aeroplan content, like upgrades or even redemptions. We can't do any of those things with the 1970s EDIFACT.”

“In 2023, we’re literally using messaging standards that were developed in the 1970s, that the U.N. endorsed as an international standard in the 1980s.”

Globally, Canada is behind on this modernization journey – some four to seven years behind other parts of the world, such as Europe, Australia and Southeast Asia, where adapted NDC-powered systems are already active.

Air Canada says that many of its key agency partners have already begun implementing NDC connectivity, including Priceline, Flight Centre, Fareportal, Flighthub, Hopper, Maritime Travel, Skylink Voyages and Travix.

To help inform its strategy, Air Canada held consultations with Canadian and U.S.-based travel agencies over the past year.

“And what came across very clear to us is that we needed to do this transition,” Nasr said. “Transitions are never easy. Certainly, we're asking the trade to integrate with new technology. But agencies can still operate how they're operating today – for a meaningful period of time, if they need to – while they make those investments.”

Eventually, Air Canada will accelerate its NDC transition, “but that’s not appropriate right now,” Nasr said.

“What's appropriate, now, is to open more doors, get people acclimated, and figure out bridge solutions to our DCR distribution cost recovery,” he said, “and once we get to the New World, when we've safely landed, and we have the vast majority of the trade community with us with new content, features and benefits, then we can look at closing doors.”

Air Canada has launched an NDC hub here with up-to-date program information. 

The airline says training opportunities, interactive webinars and regular email communication will also be available.

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.