“We need to work as partners”
Paul Tilstone (pictured right), managing partner at Festive Road, says travel distribution has many moving commercial and technical challenges, all set against a backdrop of exponential technology developments “Some of the challenge relates to the period of flux we find ourselves in as airlines
try to coincide
the timing of their NDC- enabled API capability and the renewal of their GDS contracts. I call this the first phase. In this phase, almost without exception, the announcements about private channel agreements and GDS fees have been driven by breaks in long-term distribution contracts. Here, the airlines have taken the opportunity to break to allow for faster API roll-out but this doesn’t always tally with their API capability, whether built directly or with a technology partner, to service the customer. So, there’s a lag in servicing at the same time as fees are introduced, which has led to frustration. “My take on the private
channel agreements is they serve two purposes. They bridge that distribution capability gap to ensure that the airlines’ most valued intermediaries aren’t penalised by these charges, but they also ensure all parties are committed to driving API adoption faster in the short term. They also show that airlines value the TMC community and they are not hell bent on a singular direct sales strategy. The airlines want more efficient distribution with the ability to better serve the customer and flex what is sold. We should all be buoyed by that. “One of the features of this first phase ‘period of flux’ is that,
in order to drive API adoption, the airlines appear to be offering discounted fares with old features rather than extra value through tailored, personalised fares with new features. This can only be successful as a collaborative effort. It needs more corporate buyers and TMCs to engage in designing that value, creating fares which bring something new rather than relying on price as the core driver. “It’s great to see those in the middle, the TMCs, self-booking tools and GDSs beginning to adopt NDC. It will help take us to the next phase where some of the unknown is removed and the value starts to appear. To move to the second phase, beyond this period of flux, we need the constituents to work as partners and that takes trust. But it is coming.”
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Currently, FCM’s Eklund is throwing
down the gauntlet. “New content has not materialised yet,” he says, “there’s nothing more than fare differentiation. From a corporate perspective, we’ve been poor, historically, at offering personalised content. Airlines need that. “We’re asking airlines to come up with
something really exciting. So far, there’s nothing special, but we will see more exciting things in the future.” Interlining, for example, is not yet capable
within the NDC environment, so this will, no doubt, be a priority. Pisanello says, as well as Flight Centre, a
major OTA is due to be announced shortly as an NDC-X partner. “We have very few partners,” he says, “we’re in the design phase – it has to be agile or you slow down.”
PRIVATE CHANNELS So what of the Amex GBT agreement with Air France KLM to enable its customers to avoid paying the new surcharge levied on GDS bookings? It is the latest in a string of private channel deals struck over the past year, and it shares similarities with the Flight Centre deal with nods to the future of NDC. “Private channel brings quite a lot of
value to the customer,” explains Bukowski. “First, you access all content on GDS without a surcharge. The longer term benefit is yet to be determined, but there’s a framework for future engagement. Get the commercial side out of the way; it’s the engagement that’s important.” For NDC in general, he says: “We try
to set a couple of core principles: to have access to content in a scalable way, for example, for our corporate customers.” Private channel is a way of sticking
to those core principles, he adds. As for Lufthansa’s move to
discount some short-haul, economy class return fares by Ð20 when booked direct, Bukowski says: “We don’t support airlines charging [surcharges]. Nor do we support fragmentation of that market. If we have individual connections, it’s just going to cost money. “We’ve had great engagement with airlines,” Bukowski says. “But we’re not going to wake up tomorrow and suddenly there’s NDC. “NDC supplements existing content. The
context will continue to evolve, and that will add value to corporate customers.”
BBT May/June 2018 75
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