Case Detail

Case Summary

Airline Ticket Sales: From Distribution to Retailing with New Distribution Capability (NDC)

Case Number: 5-117-002, Year Published: 2017

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Authors: Anne Coughlan

Key Concepts

Change Management, Conflict Management, Customer Service, Distribution Channels, E-Commerce, Information Management, Information Technology, Innovation, Marketing, Technology Management

Abstract

The case is presented entirely online in ten video episodes organized into four sessions, plus an introduction and a conclusion.

Ever since the 1960s, airlines had been leaders in using computer technology to manage massive amounts of data and present it to travelers and travel agents in the form of real-time offers consisting of a seat, a routing, and a price.

By 2012, airlines were focused on segmenting and targeting consumers to gain strategic advantage and generate incremental revenue. Discount airlines offered low prices with few ancillary benefits; if travelers wanted extra services they needed to pay extra for them. Legacy airlines, on the other hand, offered higher fares that bundled certain rights and ancillaries.

Consumers came to expect to book airlines online with the same level of convenience and product information they experienced on sites such as Amazon.com. However, the technology that connected airlines to travel agencies was not capable of fully meeting the demand-side and supply-side need for information on and the sale of rights and ancillaries.

An airline industry group proposed a solution in the form of a new standard for data management called new distribution capability, or NDC. Channel partners needed to decide if the NDC standard had the potential to resolve the misalignments that had hampered the channel for years.

Learning Objectives

After analyzing the case, students will be able to identify and describe demand-side and supply-side channel benefit misalignments; understand how channel benefit misalignments can be resolved; and clarify the difference between channel design and implementation.

Number of Pages: n/a

Extended Case Information

Teaching Areas: Marketing

Teaching Note Available: Yes

Geographic: United States

Industry: Airline

Year of Case: 2012