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ANCILLARIES


content – including air, hotel, car and insurance – from any source – traditional GDS Edifact, NDC and APIs – to be distributed via any channel or device, allowing comparisons and bookings to happen in a uniform and transparent way.” However, while the end goal of NDC – a richer, more user-friendly customer experience – is appealing, the process of getting there won’t be easy, and it’s already creating disruption in the industry. “Whether it’s NDC or another API standard, when they finally do it, it’ll be great,” says Chappell. “The flipside is that in the market, the fragmentation of content is accelerating. “As an agent, you could go into your screen and everything would be aggregated there. You’d see a very transparent marketplace, just like going into the beans aisle in Tesco. You’ve got your cheap beans and your organic beans side by side – you could see the market all in one place, get a good picture of what was out there, and go back to your customer.” With fragmentation, there are a lot more options


– “do you want your can of beans to have a ring pull? Metal or plastic?” – but it also becomes harder to compare offers, as certain deals will only be offered to certain customers via certain channels. For example, Lufthansa recently announced that its cheapest European fares (Economy Light) would only be made available through NDC or direct from the airline.


This is clearly proving a concern to travel buyers. According to a recent survey by ACTE and American Express Global Business Travel, 89 per cent of travel managers fear that NDC, and the fragmentation arising from it, could threaten cost control and compliance with travel policies. Just under half of respondents highlighted the fact that travellers were already sometimes buying “out-of-policy ancillaries from airline websites”. One buyer BBT spoke to echoed these concerns. “The biggest challenge as a corporate client is that this adds a lot more complexity, and complexity largely leads to higher costs and a greater chance of error. “The other risk is that if people go through different channels – booking their flight via one channel but then booking their hotel independently – then we lose sight of them. That’s not just a problem in terms of the costs, but it’s also a problem for things like security and knowing quickly where our people are if we need to alert them to an issue.” However, airline extras should be kept high on the


buyer’s agenda in 2019, no matter which channel. Keeping these costs on the radar not only means a better grasp of ancillary spend, it also means comes better leverage when it comes to negotiating better bundled deals in the future with airlines.


136 JANUARY/FEBRUARY 2019


Global ancillary revenues hit


This accounts for one-tenth of total sales for


$47.2billion 73


in 2017 airlines SOURCE: CarTrawler


fear NDC threatens cost control and compliance


SOURCE: ACTE/Amex GBT


WHAT IS ANCILLARY REVENUE?


In The 2018 Car Trawler Ancillary Revenue Yearbook, Idea Works Company classes ancillary revenue as revenue “beyond the sale of tickets that is generated by direct sales to passengers, or indirectly as a part of the travel experience”. Ancillary revenue is further defined


using the following categories: frequent flyer activities; a la carte features; commission-based products; advertising sold by the airline, and the a la carte components associated with a fare or product bundle. Ancillaries are also an important measure for airline investors, and the


item is deemed “a core component of a carrier’s fiscal health”.


buyingbusinesstravel.com of travel managers 89%


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