ANALYSIS
Distribution evolution
The latest developments in airline booking highlight how TMCs must get smarter to ride the storm
T
RAVEL MANAGEMENT COMPANIES are a dynamic bunch. No, really. When you think of the ground-shifting changes that have been thrown at them in
the past couple of decades, it is amazing that so many are not just still in business, but actively thriving. The loss of airline commissions and the advent of the internet are just two of the threats they have faced and come through the other side. Will the same be the case with the
rapidly changing distribution landscape – and if so, what will the future TMC look like? The potential threats to TMCs come in the shape of the New Distribution Ca-
The continuing health of the TMC has
been questioned, particularly in light of British Airways’ recent announcement of a so-called Distribution Technology Charge of £8 per fare component for bookings made outside “an NDC-based connection, or other low-cost channels” and due in November. Ken McLeod, director of industry affairs
at the Advantage Travel Partnership con- sortium, says that while BA’s distribution technology charge was expected, the timing was “not the best”, referring to the worldwide IT outage the airline suffered in May. “It ended up with travel agents trying to get
BA out of a hole just as they are being asked to pay more, which is bizarre,” says McLeod.
“One of the big challenges for many TMCs is they have built models around GDS technology. To change that takes both time and money”
pability (NDC) – the IATA (International Air Transport Association) standard that promises to allow airlines to sell a wider and richer range of content and direct con- nects, distribution pipes that link airlines and corporations with little or no influence from traditional intermediaries. “You cannot continue to put sticking
plasters over the cracks that are appearing,” says Paul Tilstone, partner at consultancy Festive Road. “It is time for TMCs to fun- damentally rethink what they do and how they do it.”
32 BBT July/August 2017
“One of the challenges for TMCs is they have built models around GDS [global distribution system] technology. To change that takes time and money. BA says it will institute its charge on November 1. That’s not a long period in the technical world.”
BRITISH AIRWAYS’ CHARGES The GDSs are understandably concerned about BA’s move and its effect on TMCs (see Guest column, p97). “We regret that British Airways and Iberia are imposing what looks like the equivalent
of a travel agency APD, seeking to penalise consumers who enjoy the benefits of choice, efficiency and value by booking through the travel agency medium,” says Paul Broughton, Travelport’s regional managing director for the UK and Ireland. “We remain fully engaged with British Airways and Iberia to work in good faith on mechanisms to connect with travel agencies and travellers, including the integration into our system of their content through their API – when it is fully functioning – just as we have done with other airlines.” “Connecting to multiple direct connects
is time-consuming and inefficient,” argues Broughton. “Many have few similarities between their standards, which reduces the relevant content and drives inefficiencies to the TMCs.” That said, some TMCs are looking at changing the way they operate, notably HRG (see panel). Advantage’s McLeod says that “the big boys” – ie, the large TMCs – can throw money at the problem “but eventually the cost will get through to the corporate or consumer. It’s a bit like the White House and the Mexican wall.” For the GDSs and TMCs though, the impor-
tance of existing TMC workflows cannot be underestimated. “Our technology automates the agency workflow for the TMC and is the means by which multiple sources of content are integrated into what the corporate travel- ler buys – a trip,” says Broughton. “It is the means by which changes to itineraries are synchronised across all parts of the itinerary, and the means by which the crucial data that
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