16 October, etc.venues Monument
30 October, JW Marriott Grosvenor House
1st November 2023, etc.venues County Hall
Since the dawn of commercial aviation, airlines have held the belief that every person onboard an aircraft valued their seat at a different price and they would like to target and convert them accordingly.
The idea of a perishable commodity isn’t a new concept. I imagine that a room full of people eating bananas would have also valued their potassium hit differently, but let’s not go there. Stay with me.
If you have ever worked for an airline (and a lot of us have because it’s a heck of ride and you learn so much) you’ll know that the striving for a perfect way to get your product to the customer is almost an obsession. If you’ve never worked for an airline before, you may wonder why they spend so much time and effort on the subject of distribution, and what NDC, direct connect and GDS surcharging are really all about.
For 40 or 50 years airlines distributed through the GDSs in a particular way. However, with every passing year, they developed an increased desire to communicate more information to the point of sale, get a stickier relationship with the customer and reduce the addressable cost of this channel. The picture was spiced up further by the fact that airlines originally owned the GDS and sold them off for being non-core to their businesses, but let’s not go there either.
The direct connect option first emerged almost 20 years ago, but the technology to make it viable on any scale wasn’t there. Today direct connect and NDC are technically viable and partially here, but it feels like every airline is going about things in a completely different way. Some surcharge, some incentivise, some both surcharge and incentivise, and some aren’t doing anything much different… yet.
The way that airlines distribute and how they choose to implement tricky changes are entirely their own business. At ITM we like to see consultation with stakeholders including technology companies, TMCs and, especially, corporate/end customers before changes are unveiled. We like simplicity and parity because they are good things and we help educate, connect and share on subjects just like this.Distribution used to be a very complicated and technical area that many in travel didn’t really need to understand. It seems that the first part of that sentence is still true, but I’m not sure that the second part is.
Scott Davies is chief executive of the Institute of Travel Management