are also due to start charging £8/Ð9.50 from November on bookings not made either through NDC-enabled channels or their own websites and call centres. BA’s move did not go down well with the
Most buyers’ reaction to the slow progress of NDC over the last few years has been: “Why is it taking so long?” Even now, we are still only in the “early days” of NDC, ac- cording to Greeley Koch, executive director of ACTE (Association of Corporate Travel Executives). He adds: “There aren’t many channels for using NDC within the corporate booking environment as travel managers continue to use existing platforms – GDS, online booking tools, etc – to buy ancillary services. “We recently polled our member base on how they’re handling ancillaries in their corporate travel policies, and the general thrust of their responses is that there’s no coherent policy nor strong inclination towards changing policies.” Koch also identifies one “huge obstacle” to NDC adoption, which is the fact that many airline ancillaries are not covered in corporate airline deals. It’s this, he says, that is responsible for “creating significant un-negotiated costs for those travellers who can’t use their frequent flyer status to get many ancillaries for free”.
John Bukowski, director of global supplier relations at American Express GBT, agrees that NDC is currently making “very little difference” to the way that flights and ancil- laries are being booked within managed corporate travel. “The value NDC could add to existing processes remains unclear, particularly to the buyer community,” he adds. “It’s possible NDC could facilitate richer content, branding and enhanced ancillaries or premium products. Beyond that, it’s difficult to see how distribution could be improved by NDC as things stand.”
The airline business is a brutally competitive market and it’s not surprising that airlines want to use NDC-based distribution chan- nels as a way to reduce costs – particularly by encouraging sales to be made away from the traditional GDS. We have had Lufthansa’s Ð16 fee for GDS bookings in place for a couple of years, which is now being expanded to include an additional £4 charge for short-haul hold luggage. British Airways and Iberia, both part of IAG (International Airlines Group),
GTMC (Guild of Travel Management Com- panies), which described the fee as “disap- pointing” because the GDS remains “by far the most reliable and valuable” distribution channel. Outgoing GTMC CEO Paul Wait adds: “These customer surcharges could be thought of in a number of ways: either as an attempt to force the customer to change the way it does business, or a blunt increase in the customer’s budget, or even as a poten- tial price increase that suppresses travel. Feedback we have received from corporate travellers suggests overwhelmingly that this is not a charge they will willingly accept.” It’s surely no coincidence that airlines start talking about introducing GDS fees in the run-up to negotiations with the GDS owners (Amadeus, Sabre and Travelport), leading some in the travel industry to surmise that IAG’s stance is effectively a negotiating tactic. HRG chief information officer Bill Brindle points out that BA’s proposed GDS fee is “pending negotiations” and may not be introduced. He adds: “We hope it gets sorted out as we know there are discussions going on. We will start worrying about it in No- vember if things haven’t changed by then.” Even IAG’s usually forthright CEO Willie
Walsh was non-committal on the charges when the airline group announced its half- year results in July. He said: “We are engaged with the major GDSs and we are engaging in a constructive way. We believe there is a role for them and we want to have a constructive relationship with them, but we want it to be different to the relationship of the past.”
But not all airlines are following IAG and Lufthansa’s ‘stick rather than carrot’ ap- proach to distribution – American Airlines is instead offering TMCs a US$2 incentive to use its NDC channels; a move that has been more widely welcomed within the business travel industry. Decius Valmorbida, senior VP for Amadeus Travel Channels, says: “American Airlines’ introduction of a financial incen- tive for travel agencies to use NDC chan- nels underlines how critical it is to secure adoption. Implementing the technology is only one step; securing adoption of any technical solution is what determines its
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