SOME in the industry may not be aware that I started my career as a bright-eyed electrical engineer, and I am very proud of my qualifications and technical background, even though 18 years ago I took a completely new turn when I moved into travel industry journalism. I used to work as a hardware and software programmer, and having worked on several projects outside of travel – and before the arrival of so-called “agile development” where products are released before they are really finished – I have a healthy skepticism about any major software platform ever being fully completed.
That’s why I’m not really surprised that next month, a full decade after the first New Distribution Capability (NDC) standards were published by the International Air Transport Association (IATA), the highly vaunted initiative to modernise airline retailing continues to face roadblocks and confusion, despite the best efforts of its proponents to talk it up. NDC was a key topic of conversation at last week’s BTTB travel buyer’s conference in Sydney, where the Association of Travel Management Companies (ATMC) forthrightly asserted that, ten years on, it was still “very early days with these next-stage platforms across the various airlines”.
ATMC Executive Director Oliver Tams had an “emperor has no clothes” moment as he called out Qantas in particular, for its “disappointing lack of consultation with the industry around the Qantas Distribution Platform, which is very much in its infancy”. The QDP was announced with a fanfare by Vanessa Hudson, then QF’s Chief Customer Officer, on 22 May 2018 – that’s right, almost four and a half years ago – at the time promising to “enhance the retailing, booking and servicing capabilities for trade partners, as well as deliver a more personalised experience for customers”. I know there’s been a pandemic in the meantime, but surely that provided even more opportunity for faster development of the platform – which Tams called out for its multiple deficiencies.
“It doesn’t yet allow the booking of multiple passengers, use of multiple forms of payment, allow for changes to bookings, or work through Online Booking Tools, amongst other things,” he said.
The introduction of the QDP has already had major negative implications for the travel trade. Less than a year after that initial announcement by Hudson, the carrier revealed the so-called “Qantas Channel” which required participating travel agencies to sign up in order to avoid the imposition of a Channel Fee making bookings through traditional GDS more expensive. A major campaign pushed agencies to become part of the new distribution ecosystem – which had a sting in the tail in that it generally involved the renegotiation of GDS contracts meaning in most cases the elimination of segment rebates which had previously been a key part of the travel agency revenue mix, particularly in the TMC space. The advantages of the Qantas Channel and the QDP would be manifold, we were told – but it’s taken a long, long time for any benefits to actually roll out, with several enhancements only appearing this year, such as the ability to earn extra commission on certain routes as well as deliver bonus Qantas Points and Status Credits to QF frequent flyers.
You also have to spare a thought for the various technology integrators including GDS companies, providers of online booking tools, mid office systems and more. Although NDC is touted as a new “standard,” its intrinsic flexibility means it’s anything but, meaning the work required to make connections is different for every airline. One of the BTTB conference participants in the technology space confided that his company was likely to have to continue to spend millions of dollars on development of interfaces to different airlines, with each link requiring significant customisation.
More recently Qantas has switched its strategy from “stick” to “carrot”, last month announcing that from 29 November this year travel agents and other third party distributors would be able to take advantage of Australian domestic fares at lower prices via the QDP, “offering better value and confidence when booking Qantas fares”.
“Lower pricing will be a great incentive for our partners in adopting the Qantas Distribution Platform as well as creating more value and confidence when booking Qantas fares,” enthused QF Executive Manager of Global Sales and Distribution, Igor Kwiatkowski.
“The initiative will complement the many capabilities already enabled through our distribution platform, from dynamic commission offers to personalisation for customers,” he added.
In somewhat of an understatement, Kwiatkowski noted that some partners were “still in the process of connecting to the platform,” with QF providing additional support for the initiative in the lead-up to the launch of lower QDP pricing. However given statements by Tams last week those hopes of a rapid sign-up from some of the carrier’s largest customers may be in vain. The ATMC Executive Director said the platform’s current deficiencies mean that most TMCs are still holding off signing up for it. “We won’t take the risk of inconveniencing our clients,” he said.
“Qantas’ recent comments that lower pricing is the latest benefit available to trade partners felt a little like they were jumping the gun, given the gap between the promise and reality. It’s great that NDC will allow lower fares, but from a corporate travel perspective for it to work, the solution also needs to accommodate the necessary flexibilities,” Tams suggested.
It’s difficult to track the full adoption of NDC across the world, but statements by some presenters during the BTTB conference suggested as little as 1% of global flight bookings are currently being made through New Distribution Capability channels, with the vast majority of those being in the leisure space. Clearly IATA (and Qantas) have a long, long way to go before this “new standard” actually becomes a new standard.