Ever-practical agents ask how NDC will impact booking process & pricing

This story originally ran in the Nov. 28, 2019 issue of Travelweek magazine. To get Travelweek delivered to your agency for free, subscribe here.

TORONTO — Who would have thought that a complex and at times controversial topic like NDC could be linked to pizza.

Jay Richmond, Head of Managed Travel, North America for Amadeus didn’t serve pizza during his NDC presentation at UNIGLOBE’s recent conference.

But he did have a pizza-themed visual in his PowerPoint presentation that helped show agents in the audience what IATA’s New Distribution Capability, years in the making, will mean for their air bookings.

On the left side of the slide there was a Domino’s Build-Your-Own-Pizza menu. On the right side, there was another pizza menu from another restaurant, showing different pizzas, all pre-assembled.

Pointing to the Domino’s menu, with its long pick-and-choose list of à la carte topping options, Richmond said “this is how we book airfares today.”

Pointing to the pre-assembled pizzas, he said “this is how airfares will be booked with NDC”.

Lots of options in both cases, but the NDC version is more pre-packaged and, most agents would argue, gives much more control to the airlines. The exponential rise in ancillaries and fare classes in recent years has radically changed the way airfares are booked, marketed and sold, and IATA and most of the world’s airlines see NDC as the next logical step to reflect that transformation.

Meanwhile travel agents – having survived evolution after evolution in this industry – are skeptical, and for years have voiced concerns with NDC and how it could hinder their ability to most effectively book airfares for their clients.

It was all the way back in 2013 that IATA launched its NDC blog to tackle what it called “myths and misinformation.” IATA has long argued that the key benefit with NDC is that travel sellers and consumers get access to all of an airline’s products and offerings and to compare the full value of the product offer, not just the base fare.

IATA also says that with the current airfare booking system, the customer experience is inconsistent, agents can’t easily access many airline products that are available on the airlines’ own websites, and airlines don’t have the ability to personalize their product; fares from various airlines are lumped in together and commoditized.

True enough, and NDC is already happening, slowly but surely. IATA’s latest update shows transactions by IATA’s ‘NDC Leaderboard Airlines’, which include Air Canada, AA, BA, Lufthansa, United, AF-KLM and more, to represent 8% of the total by the end of 2019. By the end of 2020, that number could hit 20%.

But agents, experienced and ever-practical, want to know how NDC will impact how they do their jobs. NDC’s offshoot, ONE Order, which “eliminates the current booking, ticketing and miscellaneous document records”, eg. PNRs, e-tickets and EMDs, is also a concern.

“The airlines want to differentiate their content. They want to personalize, they want to merchandize, and they want dynamic pricing,” says Richmond.

Most importantly, he said, “they want to control the offer.”

Agents won’t have the ability to add and subtract fare elements with the NDC way of doing things. The offer will be more cut-and-dried, “rather than being able to assemble it as you go. With NDC, it’s shop, order and pay.”

Richmond agreed with agents at the UNIGLOBE conference that the NDC booking environment will change the way agents sell and book airfares. “It’s definitely going to change in terms of flexibility,” he told agents. With NDC, he said, “travel agents don’t get to use as much of their expertise to put together a trip. But they’ll still be able to comparison shop and put together a competitive product for their client. And it will make travel agents better able to explain all the options to the traveller right at time of purchase.”

Speaking to Amadeus’ plans specifically, he added that the GDS will make sure that NDC content emulates PNR data.

NDC was also one of the top-of-mind issues at the recent ACTA Travel Agency Leadership Summit in Toronto in November, where agency execs and suppliers came together to hash out industry concerns.

NDC’s implementation has been a long, drawn-out process, by necessity, says IATA’s Regional Director, Financial & Distribution Services, Alicia Lines. Leading a panel discussion at the ACTA summit, Lines said: “It’s a huge transformation and it takes time.” The panel also included Sabre and Amex GBT.

“Airlines want to give the opportunity to travel agents to sell all their products and services,” said Lines. “At the end of the day pricing is a commercial decision made by the product owner”, in this case, the airlines.

Having 20% of bookings in the NDC format from the leaderboard airlines by the end of 2020 is key, she added. “This is what we’re pushing for 2020. To have that critical mass.” There will be some airlines that don’t end up adopting NDC, she added.

Lines said that travel agents “know their clients better than the clients know themselves” but acknowledged that when it comes to booking air with the new NDC environment, “travel agent expertise needs to shift a bit.”

Meanwhile, the NDC offshoot ONE Order, which Lines describes as “the baby of NDC”, is even more complicated an implementation process than NDC and will take several years get up and running. “That will take time,” says Lines.

During a Q&A session, with questions from the audience posted anonymously through an app, agents asked everything from “Who’s responsible for data security with open API channels?” to “How can we be sure clients will be offered the best price/fare regardless of traveller profile?”

At the ACTA panel Robert Needs, General Manager, Sabre said Sabre is “talking to the carriers” throughout this whole process. “We want to make it easy and efficient, but right now that’s not there.”

IATA has faced criticism from the retail side of the industry that travel agencies were left out of the consultation loop on NDC.

Terry Reutlinger, Regional VP, Strategic Account Manager for Amex GBT, said he’s seen IATA reach out to TMCs and various stakeholders “to make sure we’re all in the discussion now.”

Reutlinger added: “I think airline retailing can be done better. One of our concerns is making sure it’s done in the right way.”

Sabre’s Needs agreed that the process needs to be collaborative, and that patience is paramount. “This is not a marathon. This is an Ironman” triathlon, he joked to the audience.

Needs pointed out, to move laughs, that it took the industry 18 years to move away from paper tickets to e-ticketing.

The airlines, says Needs, “basically hit us with a club and said, why can’t you do this better?”, voicing the airlines’ frustration with fare displays. “We think it’s important to ask carriers, what do you want to do? What do you want to display? And how do you want to sell your product?”

Needs added: “It’s going to be tough. How do you know that you’re getting that comparison from a price perspective? It’s one of the things we’re working through.”

A travel agent at the ACTA summit said NDC “attacks customer satisfaction, not enhances it.” Other agents pointed out that some airlines are using a carrot and stick approach to promoting NDC. Noted Reutlinger: “Some airlines with less competition on routes are using some interesting tactics, and that’s unfortunate.”

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