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NDC ‘will leave many agents on the sidelines’
Ian Taylor
ian.taylor@travelweekly.co.uk
The industry is at “a watershed” with Europe’s major network carriers poised to end decades of full-content fare distribution through GDSs, leaving many agents on the sidelines.
That is the view of Ken McLeod,
Advantage Travel Partnership director of industry affairs and Scottish Passenger Agents’ Association (SPAA) president, who warned: “Fares will be out in the market that most of our agents can’t access. A slew of fares that sit behind an API will not be available to the general market.” British Airways, Lufthansa and
Air France-KLM plan to make many fares available only via their own direct-connect APIs or online portals, in line with Iata’s New Distribution Capability (NDC), while surcharging on GDS bookings. An API is an application programme interface that enables data-transfer between IT systems. Lufthansa’s lowest fares on
selected routes from Germany became available only to agents with a direct-booking channel this month and UK senior sales director Andreas Köster said: “We envisage similar in the UK.” BA launched the first of its new “NDC and direct products” recently with almost four times as many price points available direct as via GDSs, having promised
Ken McLeod: ‘A watershed for the industry’
“Some agencies have access to content, but most don’t. It leaves a two-tier industry”
last December to introduce “significantly more price points to trade partners who have an NDC connection”. McLeod told a Travel Weekly Business Breakfast: “Smaller agents are left in the wings. Some individual agencies have access to that content, but most don’t.
It leaves a two-tier industry.” He insisted: “This affects leisure agents and tour operators – not just TMCs. We have organisations trying to sell to customers of our agents saying they can give a cheaper price because they avoid the [GDS] fee. “This is a watershed for the industry, but we’re piggy in the middle. There are very few airlines capable of implementing NDC [and] our members can’t afford to spend money on research and development while this change is
going on. There are no solutions yet.” › Business, back page
GDSs: when and why they were created
GDSs, or computer reservations systems (CRSs), date from the 1970s and 80s, having been set up by airlines and made available to agents. United Airlines established Apollo. American Airlines developed Sabre. A consortium of US carriers including Delta set up Worldspan. BA and KLM set up Galileo. Air France, Lufthansa, Iberia and SAS created Amadeus. Airlines and GDSs became separate
businesses under pressure from regulators to provide neutral, unbiased display of fare information to agents. EC Regulation 2299/89 established a CRS Code of Conduct to ensure “services by all airlines are displayed
in a non-discriminatory way on travel agencies’ computer screens”.
l Travelport combined Apollo, Galileo and Worldspan – leaving itself, Amadeus and Sabre as the world’s leading GDSs.
l Iata member airlines approved development of a New Distribution Capability (NDC) data-transmission standard to open new distribution channels in 2012.
l Lufthansa imposed an £11.30 fee per GDS booking in September 2015. BA and Iberia imposed an £8 GDS fee per fare component last November. Air France-
KLM introduced a GDS booking fee of £9.64 one-way this month.
l The CRS EC Code of Conduct was last updated in 2009. It stipulates that a carrier “shall neither directly nor indirectly discriminate in favour of its own CRS”.
l The European Technology & Travel Services Association has filed a complaint with the EC, asking: “If an airline operates a distribution system to agents and discriminates against neutral distribution systems [GDSs], is that airline bound by the rules that regulate the GDS?” An EC ruling is expected shortly.
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travelweekly.co.uk 12 April 2018
PICTURE: SARAH LUCY BROWN
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