ARC Launches NDC Advancement Working Group

Airlines Reporting Corp. has created a working group centered around advancing New Distribution Capability, with the goal of establishing NDC best practices, ARC told BTN. ARC's new hire Hansini Sharma will be part of that process. 

The NDC Advancement Working Group currently is composed of about 11 travel management companies, three online travel agencies, three consolidators, seven technology providers and seven airlines, said ARC senior manager of Direct Connect and One Order Paige Blunt. The group first came together virtually in late 2023 and had its first in-person meeting in February in Austin, Texas, she said. 

ARC created the group in part due to a perception that TMCs were lagging in NDC adoption, as well as questions and comments TMCs would pose to ARC about NDC management.

"It's not necessarily that the TMCs are adverse to this new distribution style, it's that there are changes they feel are necessary in the servicing field with NDC," Blunt said. "They weren't 100 percent sure—Is it the airlines? Is it the aggregator? Is it the other technology partners somewhere in between? We had conversations about what we are calling non-competitive processes that are potentially obstacles in NDC adoption."

ARC currently has about 30 airlines working in its Direct Connect settlement program and sending transactions in NDC or proprietary schema, with another seven to 10 in the testing phase and likely to be added this year, Blunt said. The NDC portion of ARC transactions in February 2024 was 17.9 percent after hitting 18.4 percent in December 2023 and averaging 12.5 percent for the full year. In January 2023, NDC accounted for about 8 percent of transactions.

Unused Tickets

At that first in-person meeting last month, which included about 47 individuals including ARC personnel, one over-arching topic was servicing issues, as the ability for the TMC to manage the customer the way they expect and have come to depend on is not always possible with NDC. 

One key point discussed was handling unused tickets in an NDC world, Blunt said, adding that many such tickets still are sold through global distribution systems. Some airlines have a solution to manage them, "and you can do that pretty easily," she said. Other airlines still are working on a solution. "You can always exchange that GDS ticket with the airline. It's not optimal, but it is an option," she said. 

Order Change Notifications

Another key topic was about changes airlines make to ordered tickets, and how agencies receive that information. When changes occur, airlines should issue order change notifications to agencies, which then determine whether to reissue a ticket. "Is the airline just updating and making the change, or is the customer making a seat change? Or did the airline need to make a seat change because of a change of gate or different airplane type? There are all sorts of notifications that normally happen within that GDS world," Blunt said. 

In the NDC world, airlines must send an OCN message for agencies to know about any changes, and "give a trigger" for the agency to look at them. So far, airlines have not been focused on sending OCNs for every change that happens, Blunt said: "They are sending some, but they are inconsistent across airlines." At the ARC meeting, conversation focused on the OCN messages airlines use and the frequency with which they should be sent. "Do you want one for every single change that comes? How are you going to manage that? Because those are huge volumes of changes," she added.

One best practice that came out of that February meeting was "we want to be sure you really send the OCN consistently," Blunt said. "We can't mandate anything, that's not ARC's role, but we can provide best practices."

Void Rules

The U.S. Department of Transportation requires that a customer can cancel a purchased ticket within 24 hours of booking for flights at least seven days in advance and receive a full refund. A final topic at the February meeting concerned how these voided fares are retained after ticketing and accessed post-ticketing. 

ARC requires member agencies to void such canceled transactions in the GDS by the end of the next business day, a length of time that can extend past the 24-hour limit in which customers are allowed a full refund if they cancel. For cancellations of NDC fares, however, carriers can choose either the required 24-hour timeframe or the ARC standard of the next business day.

"So questions on where to find those void rules was top of mind for all the agencies in the room," Blunt added.

Further, "maybe there is an exchange, and you have half a ticket left, and what are the rules around that last portion of the ticket?" Blunt said. 

Future Plans

The group is meeting again at the start of the ARC/ATPCO joint Elevate + Travel Connect event in April. Some future topics to be discussed include exchanges, both from EDIFACT to NDC and within the NDC process, Blunt said, adding that there needs to be further discussion of fare rules and how those are sent and accessed and stored. Debit memos also will be on a future agenda. 

When the group first came together virtually in October, they agreed that they would like to have some results within 15 months, so "we're hoping to have something that can be published by the end of this year," Blunt said. "As we work through this, timelines may change a little bit.  … But we want to be sure we are providing guidelines and best practices so there is increased NDC adoption. … We just need to be sure that we can unlock the power of NDC to standardize some of the servicing aspects so people are more comfortable in using it."