Contract signing is part of ordinary business but two of this week's signings illustrate the challenge that travel managers will shortly face in purchasing air tickets.
Sabre and ARC (the Airline Reporting Corporation) have signed "a forward-looking cooperative agreement to ensure travel agencies can easily align with future airline distribution strategies. This collaboration will provide a seamless way for agencies to report and settle transactions regardless of an airline's chosen distribution model, including New Distribution Capability (NDC)."
The US ARC is analogous to IATA's BSP (Billing and Settlement Plan). It is a transaction settlement service to reimburse airlines automatically for the air tickets that travel agencies, OTAs and TMCs sell on their behalf. Those intermediaries sell this content via the GDS so an agreement with Sabre is rather essential.
But the importance lies in the nature of this agreement. Mike Premo, ARC's president and CEO, said "As airline distribution advances and adoption of new capabilities accelerates, ARC wants to ensure our agency customers are ready to take advantage of the new and exciting ways to sell travel. ARC and Sabre have a long and productive history of working together to streamline distribution processes. This agreement focuses on the success of agencies during this dynamic time of omnichannel distribution, and we look forward to working with Sabre, particularly considering its leadership position in the US to achieve this goal."
"Omnichannel distribution" has gone from something that travel management, whether corporate or intermediaries, wanted to avoid, or at least minimise, to the accepted future.
The BCD and Qantas Channel agreement is further corroboration of this trend.
When Qantas announced its "NDC" channel earlier this year, it made it clear that once it was launched on 1 August it would be available only to those intermediaries who had signed an agreement. In signing up BCD now joins fellow global TMCs Amex GBT and CWT so many corporates are affected.
BCD can now access content, which may or may not be available on the traditional GDS, without paying a segment fee. Sabre will be able to offer new channel content should it become available.
They both add up to travel managers having to use different channels. The pressure is not just external. At the recent SAP Concur Fusion conference, Joerg Martin, CTC Corporate Travel Consulting, was quoted: "The gap in pricing between direct and indirect channels for short-haul flights is becoming so huge now that corporate travel managers are coming under immense pressure because their intermediaries are no longer delivering the best fares…"
Both external suppliers and internal customers are a source of pressure for corporates to use different channels. The days of a corporate "preferred booking channel" are probably numbered.
If different channels are now the norm, corporates must address how to consolidate data and ensure that they are not the ones who are bearing the costs of new channels at the end of the day.