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Ask the experts: Is NDC a threat to travel programmes?

BBT readers ask if NDC Is a threat to their corporate travel programmes

It is now over 18 months since the International Air Transport Association’s (IATA) Passenger Services Conference approved Resolution 787, on which the airline organisation’s new distribution capability (NDC) is founded. A year-and-a-half on, many questions remain unanswered.

IATA has argued that, in displaying only basic flight information, the global distribution systems (GDSs) do not allow airlines to sell themselves effectively – bookings are made on the basis of price and schedule, with little or no reference to service quality. Corporate travel managers are increasingly focused on traveller satisfaction, making access to richer product and service information ever more important. And because corporates will be able to determine which products and services are communicated through self-booking tools, there is no threat to policy compliance.

The counter-argument is that since NDC requires passengers to submit a great deal of personal data, the true motive is to influence travel choices.

BBT readers ask is NDC a threat to policy compliance, in terms of booking through the preferred channels?

Will it drive travellers to book directly with the airlines? Nobody in the industry seems to be able to define and agree on what exactly NDC is, and what the implications are for managed travel programmes.

An ITM survey, unveiled at this year’s Business Travel Show, revealed that 58 per cent of corporate travel buyer respondents had heard of NDC – therefore 42 per cent hadn’t, more than a year after it was launched.

Responses

Caroline Allen, regional director, ACTE

Any development which gives travel buyers easier and quicker access to richer content is to be welcomed. However, it is difficult to see any benefits as far as non-discretionary travel is concerned. Corporate travellers are generally limited to preferred suppliers, or to strictly-controlled budgetary constraints, so they are less likely to be persuaded to buy additional or more expensive products and services.

Toby Guest, ACTE UK country champion

It looks like a positive opportunity for buyers to control their company’s spend by having access to better real-time reporting and enhanced visibility of available fares – and the precise composition of the fares.

Svend Leirvaag, vice-president industry affairs, Amadeus

IATA seems to confuse ‘product information’, which the airline provides, with the technology to manage and book it, which Amadeus provides. We have used XML connectivity since 2007, so it’s not like this is new to us.

Many airlines currently do not offer this type of product information – for example because they have not ‘unbundled’ their offering – but the technology is there, and has been for some time.

It is true, though, that the way to handle rich product information is not yet standardised in the industry, and that standardisation can be a good thing for the industry. Amadeus welcomes the new approach taken by IATA, and we will continue to be fully engaged in the standard’s development process.

Simone Buckley, chief executive, ITM

The arguments for NDC are that it will improve the quality, speed and ability of data that can be exchanged between the airline and the point-of-sale. This, in turn, should allow for faster, more flexible technology platforms to enter the marketplace which might bring more competition and lower distribution costs. It will also enable a better shopping experience for the booker.

The primary concern is that NDC is a standard, so it is only as good as the airlines that choose to use it and the companies that choose to develop to it. The airlines can choose whether to use it, which means that some may and some may not make the change. This will mean an even more disparate distribution, which won’t be good.

Will it erode travel managers control over their travellers/bookers? Possibly. However, not having NDC might also erode travel managers’ control, because if today’s point-of-sale tools, such as the GDSs and online booking tools, can’t keep up with the speed and sophistication of the airlines’ own websites, then travellers will inevitably start to book outside of the compliant booking process anyway.

Overall, our buyer members are in support of change for the positive and IATA has worked closely with a group of our buyer members to understand the needs of the business traveller – and, ultimately, the business travel buyer.

Perry Flint, head of corporate communications for the Americas, IATA

NDC is a technical standard not a system, so it should not impact on travel managers’ control at all. An NDC standard will enable airlines to make all product and service information available to corporate buyers in any distribution channel, reducing the need for out-of-policy bookings.

Comments

NDC was basically approved by US DOT this month. This means that it will become a reality and the debate has moved on. Simone is absolutely right when she says "...it is only as good as the airlines that choose to use it ...". Its how the airlines will use it that is the key question. Anyone who thinks NDC is completely great or who thinks NDC is completely evil clearly either doesn't truly understand the implications for travel buyers or has a vested interest in distribution methodology and is naturally protecting their business. Corporate Travel Buyers should look to organisations led by buyers for independent opinions that truly represent their interests.

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