The drive by major network carriers to transform third‑party distribution through New Distribution Capability (NDC) technology will reach a new stage in the US from April, threatening disruption to agents, travel management companies (TMCs) and customers.
American Airlines will withhold more than 40% of its fares from traditional GDSs, with full content only available through NDC channels.
But there are widespread concerns that the technology is not ready.
More: Finnair plans complete switch to New Distribution Technology by 2025
Comment: There are still opportunities from NDC
BTA slates airlines’ ‘disjointed approach’ to NDC
The American Society of Travel Advisors (Asta), the US equivalent of Abta, called on American Airlines to delay the move to the end of the year.
Asta president and chief executive Zane Kerby said recent meetings with the airline “confirmed fears that AA’s statements regarding [its] readiness are exaggerated”.
Kerby noted American’s insistence that more than 40% of its fares “would be accessible only through NDC-ready channels” and warned of “massive disruption”, arguing: “Withholding such a substantial portion of fares from independent distribution channels will have a serious negative impact on the travelling public.”
He insisted: “Most key players, including TMCs, GDSs and third-party booking technology partners, have stated they will not be fully prepared to facilitate NDC implementation by April. Significant disruption to booking, ticketing, refunds and reticketing is inevitable.”
Kerby said: “The fragile public trust [in] the airline sector is at stake.”
He pointed out airlines “have been working on NDC for over a decade” and complained at “this sudden bullying of distribution partners into breakneck-speed implementation”.
The decade-long drive to NDC has been driven by two key aims: first, to move to Amazon-style, personalised retailing through third-party distribution, mimicking how carriers can sell direct; second, to cut the cost of GDS distribution by diluting the grip of the GDSs on indirect sales.
American suggested the move to NDC technology would end “subpar booking and travel management experiences”.
British Airways chief executive Sean Doyle used the same language when he spoke at the recent Business Travel Association (BTA) conference in London, arguing: “For some years, the content we distribute through the indirect channel has been subpar.” BA and American are transatlantic partners.
Doyle argued: “Through NDC, we can distribute content as we can direct. We’ll have more products and price points through that channel.”
He conceded the technology is not ready, saying: “There is a tipping point and I don’t think we’re too far away from that.”
Doyle also acknowledged: “TMCs can aggregate content and bring technology and a level of support to travellers that airlines won’t.” But he made Iata members’ NDC timetable clear, saying: “Iata wants to get to modern retailing in the next seven to eight years.”
After Doyle spoke, a leading corporate travel buyer noted: “The metaphor for NDC is a pipe. Well, these pipes are leaking and there is a lot of clearing up to do.”
More: Finnair plans complete switch to New Distribution Technology by 2025