Since I last wrote about NDC things have started to pick up considerably. Although, when I say 'pick up,' I don't mean in a good way!
The fundamental issues surrounding NDC still exist. Most notably that IATA acts in the interests of the airlines and as a result presents a consistent long-term vision of NDC (namely rich content tailored to corporates and travellers), despite the fact that the current reality is very different. Airlines are routinely distributing low cost fares outside of the GDS and calling them NDC content. If this isn't a simple attempt to reduce their distribution costs with the GDS I don't know what is. And, more importantly, now they have begun to do this they are unlikely to give up the ground they've gained so far.
It reminds me somewhat of the current Brexit malaise. The airlines see the GDS as the EU. They have undoubtedly received significant benefits from being part of the GDS (indeed they created it) but now they see the cost of it (£39 billion anyone?) and the restrictions imposed upon them (not being able to demonstrate their own unique content differently to everyone else) as unsustainable. Essentially, they still want to be part of it but have a "different" relationship. You get the point.
However, if you are a GDS then you rightfully believe that your distribution system carries some value and that you should be paid for it. Is that worth £39 billion or should you get a rebate on the lowest cost content? You also believe in consistency and equality between all members, as GDSs are founded on the principal of "full" content as part of their T&Cs. Depending on your viewpoint, one could compare that to wanting the trade benefits of the EU but not wanting the freedom of movement bit.
Then you have the aggregators. I am not going to compare them to the new Brexit Party but it could be argued that they are a one issue solution. They provide a really compelling, singular solution to the need for aggregated non-GDS content.
So where do the TMCs sit in this debate? Ultimately, I think we are in a similar position to the big political parties. We have constituents that sit in both camps. Our largest customers are, and were, reasonably happy with the status quo. Was it perfect? No, but it enabled them to manage large, complicated travel programmes reasonably efficiently and with a model they were used to. Our medium-sized customers tend not to have dedicated travel managers who can explain what's going on and as such expect us to simply provide what they need. Right now that's the NDC content that their travellers are seeing on the airline websites. Remember the largest clients might have direct deals that give them the right price and many of the benefits you won't see on an airline website directly. Complimentary gold cards anyone?
So, with those rather clumsy metaphors now closed, I hope you can see the problem. As with most things in life, it depends on your starting position.
What conclusions can we draw from this and where do we go next?
Things have changed and I really do believe that the airlines had no choice but to use the stick (NDC) as the means to force change. They cannot compete against the vast amount of low cost content while paying the level of distribution charges that they do. However, for TMCs, and more importantly for our clients, there must be recognition that those distribution charges still exist. Are they too high? Perhaps for certain priced fares. If so, who picks up the difference? As with the original commission cuts in 1997, this will probably result in increased costs for corporate customers in the form of gradually higher fees and a group of customers who stop using TMCs (normally the smallest clients) who don't see a value in those fees. Ultimately the airlines have shifted the paradigm once again.
The big difference this time is that the airlines are unlikely to revert to a model that sees 100% of their content being distributed via the GDS. The retailing nirvana they espouse is unlikely to materialise if they revert to the "collective" of the GDS. And to return to my Brexit analogy — where do TMCs sit in this landscape? It is critical for TMCs to be able to offer the content customers need. If that means being in and out then that's what we need to do. I guess that aligns us to my good friends in Norway and I never thought I'd see the day when I'd be making a comparison like that!