REPORT BACK
WORDS ROB GILL
READY FOR TAKE-OFF?
(NDC) booking channels being introduced by airlines could impair their ability to manage their travel programmes. NDC is an initiative by IATA designed to make it easier for airlines to sell ancillary products through third-party platforms, such as TMCs and corporate booking tools. The goal is for airlines to offer a more personalised service to passengers by allowing them to book add-on services, such as baggage, onboard meals and priority boarding, through B2B channels – replicating what consumers can book directly on airline websites. Another aim is to cut airline distribution costs by driving bookings outside the traditional GDSs.
T But a new global survey by
ACTE has revealed the worries that buyers have about how their programmes and policies may be affected by the rollout of NDC, which is set to gather pace in the next couple of years. There are now more than 60 airlines currently working on some form of NDC-based distribution channel. The key potential issues for buyers are lower functionality – a concern for 90 per cent of those surveyed, higher costs caused by the “unbundling” of airline fares (89 per cent), less transparency on airfares
HE VAST MAJORITY of corporate travel buyers are concerned that the latest wave of New Distribution Capability
(88 per cent), reduced compliance by travellers (87 per cent), and worries how it would affect duty-of-care (77 per cent). The majority of buyers also
believe NDC could make it harder for them to perform their roles effectively, with 88 per cent saying it could restrict the availability of data needed to run their programmes, while 80 per cent think NDC could make it harder to manage flight disruptions with more bookings
As more airlines adopt NDC to sell seats, travel buyers have voiced a number of concerns with ACTE in its latest survey
on ancillary spending which they struggle to capture today. Greeley Koch, ACTE’s executive director, says: “Airlines have had to contend with proliferating traveller demands for decades, ranging from a preference for low fares to the desire for constant connectivity while in the air. “NDC is a response to these market forces and could make for better traveller experiences through personalisation. But
23 PER CENT OF BUYERS SAY THEY ARE ‘NOT AT ALL’ CONFIDENT
IN THEIR UNDERSTANDING OF NDC
being made outside of corporate online booking tools (OBTs).
DRIVING DATA But it’s not all bad news, as not all buyers think the emergence of NDC will be all negative – in fact, 64 per cent say it could have a “positive impact” on the traveller booking experience, while 56 per cent believe NDC could aid them in their negotiations with airlines by providing extra data on booking volumes. Another potential advantage is in improved expense reporting with around half (53 per cent) of buyers thinking NDC could produce more data
it has come at a cost to travel managers who are scrambling to figure out how to maintain control of their programmes if NDC becomes the norm.” The development of NDC, which is a series of technical standards, was first launched as a strategy by IATA in 2012, with the aim of creating an “Amazon- style” shopping
experience. Despite the long incubation period, travel buyers are still struggling to understand the potential impact of this new form of B2B airline distribution on their travel programmes.
KNOWLEDGE GAP Nearly one-quarter (23 per cent) of buyers say they are “not at all” confident in their understanding of NDC and its potential ramifications, while another 58 per cent say they are only “somewhat” confident about their NDC knowledge. Comments from buyers gathered by ACTE as part of the survey also indicate some scepticism about the approach the airlines are taking with NDC. One buyer says: “I do not see the principal purpose of NDC is to benefit us as corporate partners but rather to give the airlines additional advantage in maximising their revenue.” Another buyer adds: “Every airline seems to be at a different stage and different level. When we start asking the sales team technical questions there is a [knowledge] gap.”
34
NOVEMBER/DECEMBER
2018
buyingbusinesstravel.com
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