BTN Europe presents an overview of business travel and MICE predictions for this year
ExCeL London - 24-25 February 2021
The latest standard of NDC finally tackles ‘servicing’ – but are buyers revved up about version 19.2?
Most people associate the term “servicing” with a trip to the garage to fix their car – but it also describes the ability to cancel, change and refund air bookings, which, as buyers know, is essential to manage involuntary situations, such as travel disruption.
To date, most airline bookings made through NDC-enabled channels have offered limited scope for servicing, with the majority of sales being made in the leisure travel market through OTAs, rather than TMCs.
The trouble with corporate travel – unlike most leisure bookings – is that often last-minute changes have to be made. A traveller’s meeting may overrun or wrap up early so they may want to get a later or earlier flight home.
This means plenty of rebookings and on-the-day changes – something nascent NDC channels have struggled to cope with. Instead, TMC staff have been literally picking up the phone to airlines to make these changes manually, which paradoxically seems like a step in the wrong direction when automation is the name of the game.
Even IATA, which has been leading the NDC project since 2012, admits the number of NDC corporate bookings has been a “trickle”, despite 2019 being promised as the year of “industrialisation” of NDC channels.
One buyer for a global services company summed up the frustration neatly: “We’re supportive of NDC, but it has been very slow going and seems to be getting a bit slower. At the end of the day, we want anything that will give us better content and services for our travellers.”
Having said that, most buyers would not know if their travellers have been booking NDC-based fares or not – as many TMCs will not specifically tag them as NDC offers and presents them with one of several prices and ticketing options when booking flights.
However, this “trickle” could be about to change as the latest version of the NDC technical standard (known as release 19.2 for those keeping count) may finally tackle this servicing shortfall, and clear the path for the type of mass adoption IATA is targeting by the end of 2020.
We’re supportive of NDC but it has been very slow going and seems to be getting a bit slower
Top of the agenda
Yanik Hoyles, NDC programme director at IATA, explains to BBT that airlines are concentrating on getting the inner workings right when it comes to servicing for the corporate market.
“It’s important to get the plumbing right and that plumbing is servicing. As soon as you get to the corporate traveller it’s got to have impeccable servicing,” he says. “It’s top of the agenda for everybody.
“Servicing... is what we have been working on for the next upgrade of the standard, which will go live in September. This release tackles the challenge of servicing.”
With this in mind, Hoyles is predicting that the number of NDC bookings will start to accelerate in the latter part of 2019 and then “start to take off” in 2020.
The pressure is certainly on IATA and its member airlines to get on with NDC – the association’s 21 “leaderboard” airlines, including British Airways, Lufthansa, American Airlines, United and Air France, have set a target of making at least 20 per cent of indirect bookings through an NDC API link by the end of 2020. These 21 airlines account for 30 per cent of IATA’s total passenger numbers.
Paul Tilstone, managing partner at consultancy Festive Road, says: “Of course, 20 per cent doesn’t sound like much, but that will mean the leaders have created a new landscape for others to follow.”
Tilstone says the only real benefit to buyers so far of booking non-changeable fares through NDC channels has been to avoid the kind of GDS surcharges levied by airlines, such as Lufthansa and British Airways.
“It’s important to remember that what we are seeing here is a strategy to drive adoption of NDC content,” he adds. “The next stage will be to introduce fares and bundles which start to bring extra value to corporate travel.”
If a consumer has to wait 15 or 30 seconds for NDC offers to appear on their mobile phone, they will not adopt it easily
'Substantial growth' Germany’s Lufthansa Group of airlines has been leading the way in terms of pushing bookings down NDC channels – mainly through the implementation of a GDS booking fee back in 2015, a strategy that has been followed by BA and Air France.
Lufthansa also appears to be ahead of the pack when it comes to servicing and has secured new Level 4 NDC certification from IATA, which demonstrates the airline can provide the service level necessary to meet the needs of the corporate market.
The group says it has seen “continuous growth in NDC bookings” with chief executive Carsten Spohr declaring in March that Lufthansa’s share of direct sales, including NDC channels, had surpassed 50 per cent of total bookings.
“UK bookings through our NDC API have been showing a substantial growth in the last year, multiplying our bookings by several times in 2018,” adds Lufthansa.
Ironically, one of the major factors likely to propel the growth of NDC bookings later this year will be the launch of new NDC developments by the three GDS owners – Amadeus, Travelport and Sabre – which will be acting as aggregators of NDC content. And this comes despite the fact that reducing distribution costs through GDSs was one of the airlines’ main goals when launching NDC.
IATA’s Hoyles admits that “the GDSs moving to become aggregators is critical” to the success of NDC. While TMCs and buyers also think this will be a game-changer for the mass adoption of NDC.
David Bishop, commercial director at Gray Dawes, says: “In 12 months, we could be in a significantly different place when the GDSs will have products that are more scalable – what we don’t know is how it’s going to work commercially.”
Another potential obstacle to pushing through NDC airfares may be slow response times when travellers are searching for flights on corporate booking tools.
“NDC is not very useful to the corporate traveller unless the booking can be serviced, modified post-booking and duty-of-care can be provided,” says Gianni Pisanello, vice president of Amadeus’s NDC-X programme. “Similarly, if a consumer has to wait 15 or 30 seconds for NDC offers to start appearing on their online booking tool or mobile phone, they will not adopt it easily.”
Business travellers may start to notice when they are making an NDC booking, thanks to the “richer” content, according to Robin Smith, Click Travel’s chief product engineer.
“We’re not going to go out of our way to say, this is an NDC or GDS fare,” he explains, “but, in reality, it may become more obvious because the quality of the information far exceeds what you get from a GDS connection. You will be offered really detailed information about all the extras and services. That’s going to become obvious.”
With all these factors now starting to coalesce, NDC should be finally cleared for take-off. However, most in the industry are expecting progress to be more evolution rather than revolution.
“We may see some initial examples emerge in the next 12 months with tailored bundles relevant to their corporate and traveller needs,” predicts Festive Road’s Tilstone. “Think about the Siemens-Lufthansa deal that was finalised in 2015 under which travellers received priority boarding and lounge access regardless of card status.
“It’s this type of relationship – but on steroids – with multiple options available and fulfillable in the shopping and servicing stage of the booking process.”
All eyes will be on IATA this summer, with buyers and TMCs hoping to find significant changes have been made under the bonnet; it will be a pivotal moment in the story of NDC.