BUSINESS NEWS US trade body files formal complaint against American Airlines. Ian Taylor reports


‘Promise of smooth transition to NDC hasn’t materialised’


New Distribution Capability is a technology standard developed by Iata to communicate fare and ancillary content to agents, travel management companies and other distributors via online application programme interfaces (APIs). Asta acknowledges: “NDC may


hold much promise for the future of air ticketing.” But it notes “wide resistance developed against . . . a joint airline effort to unilaterally impose a new business model on the industry” following Iata members’ decision to develop an NDC technology standard in 2012. Iata sought US Department of


Transportation (DOT) approval for this in 2013, when Asta notes agencies and associations filed opposition, warning of price dis- crimination, less fare transparency, compromised consumer privacy and reduced competition. The DOT approved Iata’s application subject to conditions. Asta notes “years of work”


by the GDSs “to develop NDC-compliant APIs and links” has yet to yield “the single integrated system contemplated by NDC’s proponents” and there are “significant functionality disparities” among the GDSs.


Carrier’s NDC fares shift ‘led to price discrimination’


American Airlines went ahead with making many fares available only through NDC channels from April 3 despite “most key players [communicating] unequivocally they would not be fully prepared to


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Asta accuses American of ‘abuse of market power’


The American Association of Travel Advisors (Asta) has accused American Airlines of “abusing its market power” in a complaint to the US Department of Transportation (DOT) and called for government intervention. Asta accuses American of a


“reckless” implementation of New Distribution Capability (NDC) technology “to the detriment of consumers [and of] agencies, travel management companies (TMCs) and all distribution intermediaries”. The complaint by Asta, the


US equivalent of Abta, against the transatlantic partner of British Airways goes to the heart of the simmering conflict between major network carriers and the trade over NDC. American Airlines raised the


stakes by removing more than 40% of its fares from distribution via GDSs, or “non-NDC booking channels”, from April 3. Asta goes so far as to suggest the


airline “no longer has any interest in acting as a partner to travel agencies” despite almost half of US air bookings (48%) being made “via the agency channel”. Rather,


facilitate NDC”, according to Asta. The association’s complaint


specifies two immediate effects. First, it led to “significant price


discrepancies between fares” for the same flights booked via NDC channels or AA’s website and “via the established channel”, with the latter “invariably higher priced”. Asta provides a series of fare


comparisons and suggests: “Reports of price discrimination have only become more widespread.”


American’s removal of fares from GDSs ‘caused widespread disruption’


it suggests: “American’s objective is the elimination of the agency distribution channel.” It argues: “The travel industry


remains largely unprepared to fully adopt NDC . . . American was fully aware of the industry’s lack of readiness to implement its NDC ‘solution’ and the serious harm it would cause, but proceeded anyway because its dominant market position permitted it to do so.” The decision “caused widespread


disruption to the air ticket distribution ecosystem and serious consumer harm in the form of higher airfares”. Asta suggests “consumers have


American Airlines reservations staff


gained no benefit whatsoever” and “there is nothing AA could plausibly point to that suggests any benefits”. But it argues: “American made a


strategic decision to achieve an even stronger, anti-competitive business position by denying access to fares.” Asta claims: “The power to


withhold so much inventory . . . is powerful evidence of monopoly-type power.” It requests the DOT order


American to immediately restore all fares to the GDSs, review the state of competition among US airlines and consider revoking its previous approval of airline mergers and alliances.


Second, Asta identifies the It argues the carrier’s action


“has produced significantly higher prices for travellers unwilling or unable to buy through the channels American demands”.


“difficulty to shop for, book and service bookings”, telling the DOT: “Comparison shopping has been severely compromised [and] ticket servicing – cancelling, changing and making other modifications – has become far more challenging.” It also highlights issues


exchanging tickets and with multi- passenger bookings, multi-city bookings, fare searches, special requests and restricted ticketing.


31 AUGUST 2023 47


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