In light of American Airlines’ plan to move upwards of 40 percent of its fares to direct or NDC-enabled channels as of April, it’s worth re-examining one of the primary motivations: better tailoring products and services for flyers.

As described by its developer, the International Air Transport Association, the NDC program enables “personalized service based on customers’ full travel history and preferences, if they chose to be recognized.” A simple example AA has discussed involves not suggesting the traveler buy something they already get for free as a loyalty program member. Airlines could upsell customers on comfort, bag checks, entertainment, lounge access, F&B or partner deals — possibly as a way to make good for a disruption.

NDC is a set of communications protocols designed to enable richer product info and purchase capability through indirect channels such as corporate travel tools. A big part of the transformation involves airlines, rather than global distribution systems, constructing and making “offers.” They do this in response to incoming information about the passenger making the request.

Before NDC emerged more than a decade ago, there was some confusion and disagreement over its personalization aspects. Some worried that it was code for price discrimination. With regulatory oversight, a compromise between airlines and privacy advocates produced a commitment that no traveler would have to supply personal information to receive an airfare offer and that the standard would remain voluntary.

Connections using the NDC schema allow systems to identify for airlines the shopper’s employer ID (with associated contract fare designators) and their loyalty program number. Data fields also can indicate a traveler’s qualification for special services, promotions or discounts that are secured by the airline, travel agency or corporate. These may include bundles of products and services.

Airline retailing personalization

“We are 100 percent not looking to take customer information and use it to make a decision about how much or how little we should charge for a given product,” said Air Canada senior director of distribution and payments Keith Wallis during an October 2022 event hosted by ATPCO. “That is not a winning strategy, in my opinion. It is not our strategy. The price for a product is the price for a product. We do revenue management up and down based upon demand and availability, but we do not take customer inputs to influence that.”

To help with offer targeting, AA “right now” would use frequent flyer number and corporate ID, according to remarks attributed to AA director of airline retailing technology Anthony Rader.

The types of data customers share could evolve. The widely adopted 17.2 version of the NDC schema, which Spotnana, for example, is using with AA, holds a place for social media accounts. Airlines could add required or optional fields that don’t exist in NDC. There’s nothing requiring them to adhere to the NDC standard at all.

Travelers already willingly give lots of data to airlines because they think they’ll get something they like in return. IATA talks about customer “expectations” for personalized offers. Related to this will be advancements in digital identity, particularly as frameworks take hold for individuals to control access to aspects of their profiles.

“The vast majority of profile tools available at the moment offer pretty standard data fields we are used to with loyalty cards, seat and meal preferences, etc.,” according to Festive Road managing partner Paul Tilstone, who has worked for several years as an IATA liaison to the corporate travel market. “But in an NDC world, the use of profiles potentially steps up to another level in terms of types of data and its use. Rather than being in a ‘push’ world where fares are filed/pushed to the GDS by the airline and the agent interprets the profile when making the booking, an NDC world is a ‘pull’ world where the submission of shopping data pulls offers from the airlines as requested. This means there are different implications of the profile, such as, but not limited to:

• What profile data will bring back the best offer?

• What new types of profile data will there be? On the internet, companies use cookies to interpret tastes and interest. Could we see IP address data in profiles? Or could we use “trip friction” metrics data to have the airline make an offer which recognizes any service issues on previous trips? These illustrate that there’s an opportunity for sophisticated shopping which NDC certainly has the potential to facilitate.

• Will identifying loyalty status with other carriers be something that will drive offers from competitors?

• Will the buyer be able to determine whether the exposure of corporate and personal identity drives the right offers? Buyers worry [that being identified] as higher spenders may equal higher fares. (Personally, I think this highly unlikely, as airlines doing this would lose the trust of the buyer community.)

• What depth of profile data is appropriate, useful and/or legal?

“Ultimately there will likely be an incremental pathway to more sophisticated profile use which will start to solve for the questions above, but it will undoubtedly take time,” Tilstone wrote in a November email. “And as AI starts to be used, we could see online booking tools and GDSs move to ‘consumption engines,’ which would represent the buyer and face off against supplier revenue management engines. Consumption engines would use market data, localized data and AI insights to determine the best profile and shopping data to provide in order to get the best offer back.”

Even without permitted access to more granular profile info, airlines can match corporate ID and loyalty program data with historical purchase info or other customer datasets to improve their view of which offers will land.

“Previous purchasing history can be helpful to know,” said Jeff Lobl, Delta Air Lines managing director of global distribution, in an October phone interview. “Purchasing history of others on similar itineraries flying for similar purposes could be helpful to know. The number of people in the party could be helpful to know. If someone’s traveling alone or if they’re traveling with a group or with a family. All of these things are inputs that other retailers are using to optimize the customer experience and make sure that they’re delivering the product that makes the most sense for that customer. I think we would fall into the same pattern. There’s no shortage of information that customers are offering you that can help us optimize the experience and the vision here is that we leverage all of that.”

It’s largely a vision right now, especially in corporate travel; the industry has a lot of work to do for enablement at scale.

Air Canada’s Wallis suggested travelers could expect some misfires as airlines learn about targeting.

“We’re not a technology company,” he said. “Where we’re trying to learn from basic consumer inputs on our site — trying to figure out what kind of persona they have — at the beginning of this, we’re probably going to be pretty bad at it. So, that’s why it’s important [to] always have that safety valve for customers to get out of whatever path they’ve gone down, come back out, look at more things and make a different choice. But I would propose that not all customers come into the shopping experience knowing 100 percent what they want anyway, and might even change their mind while they’re shopping.”

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