Industry bodies representing travel agents, global distribution systems and other technology players are speaking out on proposals from the International Air Travel Association to deliver a platform to help airlines sell ancillary products.
IATA’s New Distribution Capability is built around XML-based¬†protocols¬†and aims to enable airlines to offer personalised offers to customers.
A working group of about 30 airline representatives voted in favour of ¬†the proposals today at the¬†World Passenger Symposium in Abu Dhabi with IATA heralding the dawning of a ‘New Age for distribution’ on Twitter.
IATA boss Tony Tyler claimed in a speech earlier this week that the development of the NDC was being conducted in open and transparent collaboration with all segments of the travel industry that would be affected by it.
Tyler believes the use of the GDS system hinders airlines from developing relationships with their customers.
“The travel offer is put together outside the airline by third parties‚Ä¶ it is impossible for the airline to tailor its offer to the customer via the indirect channel‚Ä¶. This model is focused only on finding the lowest ticket price. This has resulted in the commoditization of air travel‚Ä¶.
In general terms, industry¬†representatives question whether the NDC could mean the end of fare filing with¬†ATPCO¬†(Airline Tariff Publishing Company) and the GDSs.
Key objections raised include the following:
- Parties are concerned over IATA’s failure to involve a wide-ranging group of industry representatives in the process from the beginning despite repeated calls for participation
- There are also concerns that the principles laid down in the proposal were formed by a small group of airlines
- Interested parties don’t believe the proposed NDC platform will create further transparency. Those voicing concerns range from the American Society of Travel Agents and the Business Travel Coalition to the Guild of Business Travel Agents and the European Technology and Travel Services Association
- Concerns have been raised over whether the NDC will mean an end to price comparison and enable the airlines to engage in price discrimination thereby offering different prices to different consumers
- Parties have also highlighted possible legal and competition issues especially around the CRS code of conduct and the Air Services regulation on transparency and access to fares
- It is likely that airlines and travel agents would have to develop additional systems and processes to be able to integrate NDC
“I want IATA on the record, and airlines on the record, about the ultimate objective of this initiative. I¬†see a lot of merit in this initiative,¬†because the airline product has become more complex. We need to get our head around how to more effectively distribute it to all channels.
Yet we have to make sure we don’t lose track of ultimately what the consumer wants. We’ve seen a regulatory debate in the US¬†about whether or not to regulate the the disclosure of ancillary fees and upgrades.
If we take a step back, IATA did some research over the last couple of years and they had a working group look at what it is that the airlines customers are looking for. And one of the major points that were raised is that¬†customers want to have same kind of comparison-shopping experience, whether on airline website, whether on handheld device, whether OTA or traditional travel agent or metasearch engine. They want the same offerings and same kinds of transparency across platforms.
How does the NDC initiative reflect that feedback from consumers?”
The GDSs gave their view back in August¬†and adds Sabre:
“Based on our extensive evaluation and deep technical analysis of IATA’s proposal, our conclusion is clear. We do not see how the proposed NDC approach would work in the real world without sacrificing fare transparency, limiting comparison shopping and compromising data privacy rights.”
Not everyone one is against the NDC, however, with some technology players voicing their support for the initiative.
“We think the industry, certainly the airlines, have started becoming better at retailing and that means differentiating your product, personalisation and having better content than we currently see in the GDSs.
One issue is that the current selling model is really only doing price comparison but airlines do have different price models and can do different bundles and their product is not being well served.
I think this will end up being more transparent and someone who abuses the personalisation is going to get caught pretty quickly in this modern online retailing world.”
NB: Image of distribution courtesy of Shutterstock.