TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
TMC NDC ADOPTION BAROMETER
he New Distribution Capability is a technology standard with a straightforward premise: to modernize airline distribution in the agency channel.
To travel management companies, however, it’s anything but straightforward.
The standard’s progenitor, the International Air Transport Association, says NDC is an overdue upgrade so that airlines can bridge the gap between the manner they sell through their own websites with the methods travel agencies use to distribute fares, bundles and ancillary products in their channels. To airlines, NDC lets them send richer fare and product data to agencies and better understand who is shopping. This, they say, will let them tailor airline offers, fares and bundles to shoppers, be they corporate or leisure.
The Beat this year surveyed 30 TMCs to learn how they view the NDC standard and better understand how they approach adoption and enablement.
Most TMC respondents view NDC’s goal of richer airline content as a net positive.
However, as airlines, technology operators, distributors and travel agencies install the plumbing to scale adoption, some cracks have been laid bare. This has forced TMCs to cope with some practical challenges of shopping, booking and servicing NDC-type content, and spurred investment to rework agency systems to enable NDC.
Further, some airlines have hitched controversial commercial elements to their NDC strategies, from levying surcharges on GDSs to removing price points from that preferred channel. This has made TMCs wary of NDC’s economic implications.
Today, only “a very small percentage of transactions” are NDC-enabled, IATA VP Doug Lavin said in March during a U.S. Department of Transportation panel. But NDC’s largest airline backers plan to turn this trickle into a gush.
IATA calls them the “Leaderboard” airlines: 21 carriers around the world that plan by year-end 2020 to process at least 20 percent of their indirect transactions through NDC-compatible application programming interfaces. They include U.S.-based carriers American Airlines, JetBlue and United Airlines as well as the three biggest airline groups in Europe.
In the years since IATA kicked off NDC standard design in 2012, the three major GDS operators have gone from foes to friends, from wary to won-over.
Moving beyond NDC’s contentious roots, Amadeus, Sabre and Travelport have embraced it. IATA has certified each as NDC aggregators. The three major GDS operators have sundry pilot programs with airlines and agencies, and even some live NDC transactions. This year, each is making progress on respective road maps to bring NDC to life in their channels for agency customers, through desktop applications used by agents and Web services adopted by online booking tools as well as online travel agencies.
In November 2018, Amex GBT, BCD, CWT, Egencia and 11 other TMCs signed an open letter on NDC. They were responding to a group of travel buyers who urged them and other corporate travel players to “do more” to advance NDC and account for buyer needs.
The TMC signatories likened NDC to “a half-built house.” They wrote: “It is our job, with our technology providers, to deliver a fully built house. A house that is better than the one we had before.”
No longer confined to the alphanumeric strictures of fare filling through ATPCO, NDC should deliver a broader array of content. That includes personalized fare bundles, targeted ancillaries or pricing based on the profile of the bookers searching for a flight. Airlines also say the API-based distribution will let them provide richer data on their products, including images and video, as well as more expansive fare rules.
Travel agencies, once bitten when airlines in the 1990s drew down base commissions and in the 2000s through opt-in programs that compelled them to trade some of their GDS incentive revenue for “full content,” might be twice shy about NDC. After all, they have felt the snap of airlines’ jaws before.
It’s little surprise, then, that TMCs are wary of the economic and commercial implications of NDC.
Two-thirds of respondents said NDC poses unfavorable economic model changes.
If the road to NDC adoption is lined with mid-office potholes, airline speedbumps, GDS construction and commercial detours, TMCs by and large like the destination. Among 30 respondents, 24 characterized the NDC standard as a positive development.
The Beat invited dozens of travel management companies to complete an online questionnaire to better understand how they approach the International Air Transport Association’s New Distribution Capability standard. Respondents to an online survey, fielded in March, April and May 2019, include a wide mix of agencies, from some of the largest mega travel management companies and multinational TMCs to national and regional operators. The Beat supplemented information captured through this survey with interviews with executives from TMCs and technology companies, as well as consultants.
The Beat would like to thank the TMCs that completed the questionnaire upon which the research is based: AdTrav, Altour, American Express Global Business Travel, AmTrav, ATG Business Travel Management, Atlas Travel, Balboa Travel, Cain Travel, Capita Travel & Events, Corporate Travel Management, CWT, Direct Travel, Egencia, Executive Travel, Flight Centre Travel Group, Fox World Travel, Frosch Travel, Gray Dawes, Hess Corporate Travel, Omega World Travel, Ovation Travel Group, Reed & Mackay, Short’s Travel Management, Tower Travel Management, Travel and Transport, Travel Inc., Travel Leaders Corporate, Travel One, TravelStore and WTMC.
About The Beat
The Beat is the must-read digital publication for senior-level corporate travel professionals, providing breaking news, insightful views and compelling interviews on corporate travel distribution, travel management and technology. The Beat serves an audience of more 10,000 through its paid-subscription newsletter and website. The Beat Live is an annual conference bringing together over 125 senior travel executives. Our 12th annual event will take place at the InterContinental New York Times Square from Sept. 17 to Sept. 19.