Qantas channels the future of fares

LAST month Qantas unveiled one of the biggest changes to the distribution of its products in the last 50 years. When it is implemented later this year, the new “Qantas Channel” has the potential to revolutionise the way the airline deals with the travel industry, GDS and customers. Bruce Piper looks at the implications of the new paradigm and what it means for travel agents.

The promises of the brave new world of IATA’s New Distribution Capability (NDC) have been lurking in the wings for some years, but until now it has seemed to be a far-off dream bearing little relevance to the day-to-day activities of travel agencies and airlines. Sure, tech-heads have been enthusiastic about the potential for delivering richer content to travel agent desktops, and there have been plenty of three-letter acronyms (TLAs) bandied about like XML, API, QDP and EMD (not to mention old favourites like PNR, SSR and the dreaded ADM), but it has all seemed to be completely separate to what is actually going on in the real world.

That all changed last month, when Qantas Chief Customer Officer, Vanessa Hudson, unveiled details of the new Qantas Channel, with a firm timetable which will see the new platform implemented effective from 1 August 2019. This change is coming, and it’s coming fast, and the industry needs to act now to be ready. And like all change, the introduction is a two-sided coin, with some seeing it as a threat to the status quo, while others are looking forward to embracing the opportunities afforded by this technological revolution.

What is the Qantas Channel?

The Qantas Channel is the culmination of a huge amount of intensive work by the carrier, building on last year’s launch of the Qantas Distribution Platform (QDP). The QDP is an implementation of IATA’s NDC, which essentially provides the ability for anyone with suitable technical expertise to access all of the functionality offered by Qantas.com, the airline’s direct to consumer distribution channel. The rich data on many customers held by Qantas — such as frequent flyer status and key preferences — can become available to third parties too, while the platform also facilitates other functionality such as seat selection and the purchase of ancillaries like extra bags. Much more information can be provided at the point of sale, including fine details of products and services, potentially allowing QDP users to better tailor offers to customers, service bookings and ultimately provide the right recommendations.

For large agencies or groups with significant technical expertise, the QDP provides an Application Programming Interface connecting Interface connecting directly into the Qantas reservation system. Early adopters of the functionality have included Serko and Corporate Travel Management, which have both touted their technology leadership as they have linked their own systems with the QDP.

However most of the industry doesn’t have the money or IT resources to develop these direct connections with the QDP, and that’s where the Qantas Channel comes in. In stark contrast to some of its European peers, notably Lufthansa and British Airways, Qantas has taken a remarkably collaborative approach in implementing its NDC solution, in particular working alongside key GDS providers in order to minimise the disruption for its travel industry distribution partners. Clearly Qantas sees significant benefits in implementing the QDP, but looks determined to bring the industry along with it into the new technology landscape.

Essentially, the Qantas Channel is a new agreement between the airline and its agency partners. Those who sign up — expected to be the overwhelming majority of third party distributors including TMCs, agency consortia and online travel agents — will gain access to the widest range of Qantas fares, products and information. In the past, GDS providers negotiated so-called “full content agreements” with airlines who guaranteed to provide full fare and schedule information to GDS agent partners across the globe. This arrangement shifts somewhat under the Qantas Channel, with the agreement about content provision also now involving individual agents who must opt into the program in order to ensure access.

And while Qantas is offering the “carrot” of enhanced functionality, smoother processes and its full product range, there’s also a “stick” in the form of a hefty $17.50 per sector fee which will apply to third party distributors who don’t opt into the new program. Those who decline to take part will also no longer be able to access the “widest range of traditional fares made available via indirect channels, or new content via the Qantas Distribution Platform,” the airline said.

What does it mean?

For Qantas

The new Qantas Channel opens up a completely new digital distribution platform for the carrier, enabling it to “manufacture” innovative product offerings and have them available seamlessly no matter how a customer wishes to purchase them. Nobody is more excited about the change than Qantas Executive Manager Sales and Distribution, Igor Kwiatkowski, who told travelBulletin he is full of anticipation about the possibilities afforded by the Qantas Channel. “My biggest headache is what to do first,” he said. “The Qantas Channel will allow recognition of our most loyal customers via our trade partners, who will all of a sudden be presented with so much more information that they will be able to promote our products for what they are”. He sees this as a key way that a legacy carrier like Qantas can differentiate itself from its competitors, with the platform clearly calling out product features and benefits that simply are not available through a traditional GDS screen.

Kwiatkowski said the initial roll-out would provide client frequent flyer information to agents through the Qantas Channel along with richer product content, but that’s just the start, with the platform potentially providing a host of options such as allowing agents to offer “points plus pay” bookings, targeted incentives with bonus commission on particular routes, booking of ancillaries, and customised offers for the airlines’ most loyal customers. “The sky is the limit,” he enthused.

For agents

There’s no doubt that agents adopting the Qantas Channel will have a plethora of new sales opportunities available to them. They will know much more about client preferences, and current kludgy processes for purchasing of ancillaries such as seat selection and extra bags will all become part of a single, smooth workflow. When she launched the platform, Hudson hinted at a host of possibilities, saying it would “empower trade partners to access Qantas’ most compelling products and deliver enriched, personalised experiences to customers”.

Agents will be able to engage with their clients in new, innovative ways, and the Qantas Channel actually brings third party distribution into line with what consumers already widely expect when dealing with the carrier via its website.

And QF has also promised to introduce new offers that will be exclusive to agents that have registered for the Qantas Channel, including more price points than the 26 fare classes currently offered by the GDS.

Tier-based offers for members of the Qantas Frequent Flyer program will become available via travel agents, who may also be offered bonus commissions for bookings of selected flights and/or routes.

Qantas has already worked hard to explain the benefits of the program to key trade partners, many of whom have signed up. Flight Centre, Helloworld, Express Travel Group and Consolidated are all on board, along with a host of major TMCs such as Corporate Travel Management, Carlson Wagonlit and ATPI Voyager.

Online Travel Agencies are also in, including Webjet and Expedia, and the carrier said it was working closely with other agents to register them over the coming months.

Flight Centre welcomed the opportunities afforded by the Qantas Channel, with Greg Parker, Executive General Manager of the company’s global air business, saying it would “deliver a new level of modernised air content to our customers”.

Helloworld is running a series of state-based Q&A sessions to answer any questions its members may have, and also confirmed that its Air Tickets consolidation operation would participate in the Qantas Channel to allow seamless support of all Qantas bookings.

The carrier has also confirmed that the Qantas Channel terms and conditions will not impact on base commission, with the new agreement separate to the airline’s Agency Sales Agreements with agents. Further details of the terms and conditions are set to be unveiled this month, Qantas has promised.

There will be significant impacts for agents that do not sign up to the new platform, with Qantas set to remove some of its fares from the standard GDS platforms effective from August this year, and impose a $17.50 per sector fee as a YR tax for any bookings by those who are not participating in the Qantas Channel.

For GDS

The collaborative approach taken by Qantas has seen it partner with all three major Global Distribution Systems — Sabre, Amadeus and Travelport — to make the Qantas Channel available to agents globally.

Amadeus confirmed that it had signed a new distribution agreement that included the Qantas Channel — ensuring agents who sign up can continue to access QF’s present and future content, “while enjoying the efficiencies and servicing capabilities of the Amadeus system when booking, changing or cancelling trips”. Travelport has also joined up, saying its new agreement with Qantas “includes a commitment to continued collaboration on the future of distribution”. Travelport MD Australia and NZ, Scott Barber, said “as the first GDS operator with an NDC booking solution available to a small group of customers, we have proven our capability to deliver this new standard. We are supporting our customers as they prepare for this new distribution era to ensure it provides seamless, integrated travel choice through access to the broadest range of content”.

Sabre said it was pleased to partner with the airline to deliver the Qantas Channel, and also welcomed Qantas as the newest member of its Beyond NDC program, which would see the carrier “act as strategic partner to an innovation initiative chartered to drive the industry forward through the development and integration of end-to-end capabilities to process NDC-enabled offers”.

For consumers

Finally, as with most innovations of this type, consumers look set to be the big winners. The Qantas Channel ensures they will be offered the same, rich, personalised content and offers no matter how they book, with their loyalty able to be recognised whether booking through a travel agent, TMC, OTA or with the airline direct.

Wrapping it up

The global aviation industry will be watching Australia closely in the coming months, with the innovative, inclusive approach taken by Qantas seen as a benchmark for other markets. AFTA CEO Jayson Westbury noted that the Qantas Channel would see the carrier able to take control of how it chooses to price and provide access to its content itself — something that no airline has been able to do in the indirect channel. Westbury hailed the “significant planning, investment and clearly defined strategy” articulated by Qantas.

Long-time NDC skeptic, Sydney-based Martin Cowley, put it well when he told travelBulletin that “Qantas has played this one beautifully. Inclusive, collaborative, working with all partners at launch — including GDS. No surcharges. No restricted content. No blunt instruments. Very different from European competitors”.

Roll on 1 August 2019.

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