IATA hits back at agent/GDS claims it has failed to consult adequately on NDC

Issues & Trends – November 2012

IATA hits back at agent/GDS claims it has failed to consult adequately on NDC

IATA has hit back at claims by travel agents and GDSs that it has failed to consult adequately on its planned “new distribution capability” (NDC) standard.

The airline body’s director general Tony Tyler argued earlier this year that the NDC is needed to achieve “greater product differentiation than is currently available through GDSs”.

His statement elicited pledges of co-operation from the GDS companies who were adamant they had the technology to distribute customised fare offers that, for example, unbundle a range of airline ancillary services and facilitate transparent comparison shopping via travel agents (travelBulletin, June).

But when the NDC foundation standard was adopted at last month’s IATA passenger service conference, agents and GDSs cried foul, slamming a lack of consultation by the airline body. (travelBulletin, October).

Sabre claimed the proposed NDC would sacrifice fare transparency, limit comparison shopping and compromise data privacy rights.

Tyler claimed a transparent, colla-borative approach, but “nothing could be further from the truth”, according to the American Society of Travel Agents (ASTA) while AFTA chief executive Jay Westbury attacked “a failure to have the travel agent community at the table”.

Their statements reflected deep suspicion that there are airlines who see the NDC as an opportunity to drive customers to their own websites.

Those suspicions were recently summed up by Mobile Travel Agents (MTA) managing director, Roy Merricks who described the NDC as “potentially the biggest threat to travel agents since commission cuts”.

“Let’s be clear about the potential issues here,” he said. “Currently as agents, we build travel proposals in the best interests of our clients who are effectively unknown to individual carriers until the transaction is completed.

“It is the ability to work closely with clients regarding their plans, along with our experience, destination knowledge, connections on the ground and a highly developed client relationship that sets us apart. If the airlines succeed with the NDC in its current form, that position may very well be compromised.

“Many airline websites are already designed to recognise return visitors and make predictive ‘special offers’ directly to them …

“We are all aware that on occasion airline websites undercut fares offered to agents through the GDS – we also know the airlines’ goal is to reduce or eliminate segment costs they currently pay to the GDSs.

“If the NDC succeeds along those lines, it is clear where the cost burden will move and that’s us. In turn we will need to pass those extra costs on to our clients and the void between airline website fares and those available through the GDS will widen even further.”

Sceptical about IATA claims of a collaborative approach, Merricks called on agents and their associations everywhere to band together “before it is too late”.

But IATA’s Singapore-based assistant director of corporate communications for Asia Pacific Albert Tjoeng is adamant that “IATA has been engaging the travel agent community in the development of the NDC”.
“This engagement has been done directly with agents, as well as with agent associations,” he told travelBulletin.

“Expedia, which is a member of ASTA, attended the July NDC work-shop at IATA in Geneva; IATA attended ASTA’s Travel Retailing and Destination Expo in September and presented about NDC.

“IATA invited the European Travel Agents’ and Tour Operators’ Association (ECTAA) to an NDC meeting in September in Geneva; the Guild of European Business Travel Agents (GEBTA) invited IATA to its board meeting for an NDC presentation in October in Brussels. IATA gave a presentation on NDC to the Agency Solutions Technical Working Group (ASTWG) in September.

“IATA gave an update on NDC at the Passenger Agency Program Global Joint Council (PAPGJC) in Abu Dhabi in October. The World Travel Agents Associations Alliance (WTAAA), the Universal Federation of Travel Agents’ Associations (UFTAA), ECTAA and GEBTA were present.”

According to Tjoeng the development of the NDC involves participation of travel agents directly instead of through their agent associations.

“The expertise needed for the standard development is often found with the travel agent and not the agent associations,” he said.

“In fact, ECTAA proposed that two of their member agents attend the next NDC workshop in Montreal in November. IATA accepted and invited them. These two agents are now actively participating in the working group.”

Travelport has called on IATA to address industry concerns and “demonstrate a real collaboration across the value chain, including GDSs and the travel agency community”

“Travelport welcomes open engage-ment with IATA on its NDC initiative,” a statement from the GDS company said.

“Travelport has consistently main-tained that standards are an important aspect of the technology landscape … However, these standards need to fairly and equally represent the needs of all participants in the end-to-end travel supply chain.”

Calling for “open dialogue” Travelport noted that “much of the IATA NDC statement appears only conceptual in nature, based on high level principles that do not necessarily incorporate the input of all the critical components of the travel value chain from supplier to travel agent to consumer”.

Travelport said it already delivers many of the proposed capabilities “and, along with the rest of the industry, remains committed to engaging to turn these principles into deliverable, practical standards that meet the needs of all participants in the end-to-end travel supply chain”.

The GDS reiterated its commitment to enabling comparison shopping, allowing travel agencies “to provide an excellent and highly transparent product and service to their clients”.


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