BTN Europe presents an overview of business travel and MICE predictions for this year
ExCeL London - 22-23 June 2021
The technology is slotting into place – but first the key players must join forces to work out NDC’s potential
New alliances are emerging as airlines, TMCs and GDSs step up their collaborations on distribution.
Two recent examples include Amadeus’s partnership with Flight Centre Travel Group, and American Express Global Business Travel’s private channel agreement with Air France KLM. Both were announced just last month, and IATA’s New Distribution Capability has played a key part in these latest moves.
At a basic level, NDC is an XML-based data transmission that aims to give airlines more flexibility over product distribution, content, offers and more.
However, as more airlines adopt NDC, so too do they experiment with ways to encourage its take-up. Charging bookers a GDS fee is one common example, yet larger TMCs are negotiating waivers for this.
At the other end of the scale, direct discounts are being offered and in April Lufthansa announced it would reduce some short-haul, economy class return fares by €20 when booked direct. How, exactly, are travel buyers expected to keep up?
Paul Tilstone, managing partner at Festive Road, says: “It’s easy to criticise the players involved if you don’t consider the whole picture. From what we hear, if you’re a buyer you’re wondering why NDC is taking so long; if you’re a TMC you’re wondering who is going to pay for the necessary technology investment; if you’re an airline you’re wondering why people aren’t jumping for joy at your latest discounted fares through private channels.”
And apart from potential fare savings, what is NDC putting on the table? “We’ve already seen an example of what’s achievable in the Siemens/Lufthansa deal to provide fares via an API which gives priority boarding and lounge access to all employees,” Tilstone continues.
However, more transparent comparisons offered via NDC will likely pique buyers’ interest. John Bukowski, director – global content and distribution strategy at Amex GBT, believes NDC will help airlines offer more sophisticated packages to corporate travellers via the TMCs.
“Airlines have had to upgrade their APIs,” he says. “TMCs can now ask corporate customers what’s important to them, such as different types of corporate bundles. It will be important for airlines to display fares, and compare them. For example, airline A offers one bundle at €200, airline B at €250. How do [bookers] decide what’s best?”
BA’s NDC developer website appears to back this up, stating: “the end customer benefits with a more transparent booking process so they can make informed decisions about what each airline offers and who they decide to travel with”.
Bukowski continues: “We are actively engaged with the airlines, trying to work on NDC to enhance the point of sale, and add value to corporate customers – there’s also duty-of-care and policy control as well as fares. We’re looking across from where the traveller leaves home to when they return – it’s not just airspace.”
The X factorAmadeus is also keen to engage TMCs on NDC’s potential, and earlier this year launched NDC-X. It should be noted this is not a new standard, or protocol, but more of a marketing tactic by Amadeus to re-engage the industry.
Gianni Pisanello, vice-president of the programme at Amadeus, says the name was inspired by SpaceX, Elon Musk’s frontier-pushing space transport company. “NDC-X is the baseplate; you need an essential bedrock in place.... Flight Centre is a key driver in terms of how NDC functions in practice,” he explains.
Marcus Eklund, global leader of Flight Centre’s FCM Travel Solution’s division, affirms this: “This is more of a strategic partnership, in line with Amadeus’s vision.”
With NDC-X in place, both believe now is the time to start approaching airlines, as it is only recently the larger airlines have truly adopted NDC.
One of the most important NDC releases was 17.2 in September last year (“this version of the schema is a major step forward”, IATA said at the time).
However, not all airlines are on the same page, with British Airways only recently having attained this standard and in January this year, IATA revealed that just nine airlines were using it.
For Amadeus, version 17.2 should be the minimum standard, as it factors in more technical solutions concerning “servicing”, such as being able to change bookings.
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 channelsSo 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 €20 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.”