Evolution of Air Distribution: Challenges and Future Insights (Part 4)

A Four-Part Analysis of Market Landscape, Dynamics and Challenges

Evolution of Air Distribution: Challenges and Future Insights (Part 4) Published September 2019 Analyst: Michael Gerra


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Research Type:

IATA’s New Distribution Capability (NDC) and ONE Order initiatives hold significant long-term promise for airlines and their partners to reimagine product distribution, merchandising and order management. But these potential benefits come hand-in-hand with some risks and challenges. This publication, part of a four-part series analyzing the complex dynamics of the air distribution sector, examines key challenges affecting major players across the industry, providing valuable insights for anyone interested in air distribution.

Also in this series:

  • Introduction
    • Aim of This Research
    • Methodology
  • Distribution Challenges and Future Insights
  • Unresolved Distribution Issues and NDC Adoption Challenges
    • A Solid Business Case for NDC is Not a Given
    • NDC Standards are Not Monolithic
    • Airlines, NDC Aggregators and Resellers Do Not Have Scale and Performance
    • Indirect Channel is Functionally Rich, But Content Poor
    • Cross-Airline Comparative Shopping Across All Channels Does Not Exist
    • Traditional Agencies and OTAs Show Lukewarm Interest in NDC
    • NDC Faces Resistance from Corporate Travel Segment, TMCs and OBTs
    • NDC Does Not Address Agent Desktop, Workflow and Back-Office Redesign
    • ONE Order Aims to Replace the PNR – A Non-Trivial Task
    • IATA’s Payment and Settlement Initiatives Adds Further Complication and Stress
  • Trends in Distribution – 8 Key Future Insights
    • #1. Leisure Merchandising is Getting Creative, Premium and Corporate Will Be Next
    • #2. Hybrid, Omnichannel Distribution Model Will Be With Us for Quite a While
    • #3. NDC Will Fragment Distribution and Will Require Re-aggregation
    • #4. Airlines Will Need a Retailing Platform – with a Little Help from Their IT Partners and PSS Friends
    • #5. Market Power Will Determine Distribution Changes and Uptake of NDC
    • #6. It May Be About the Channel, but It Will Become About Customer Touchpoints
    • #7. Metasearch Still Holds Promise for Direct Connect
    • #8. The Known Unknowns Will Be Lurking: Gatekeepers and the Regulators
      • Gatekeepers
      • Regulators
  • Conclusion
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