Airlines need to work with the industry as a whole, says Travelport’s Heywood

Airlines need to collaborate with the industry to develop new distribution capabilities, not “try to force practices on the industry”. Continue reading →

Airlines need to collaborate with the industry to develop new distribution capabilities, not “try to force practices on the industry”.

That is the view of Ian Heywood, head of product and marketing at global distribution system (GDS) Travelport, who told the CAPA Airline Leader Summit in Dublin: “Change needs collaboration.

“Airlines don’t know it all themselves. If they try to force practices on the industry it won’t be successful.”

Heywood criticised airline association IATA and its New Distribution Capability programme, saying: “Iata NDC always talks about the end state and not about the journey.

“Everyone talks about wanting all content through API [online distribution through an Application Programme Interface], but you can only get there if you plan the steps.

“A few direct connects with agents won’t get you very far. Airlines need to work with the industry as a whole.”

Heywood said airlines need to work with a combination of API and ATPCO – the Airline Tariff Publishing Company which supplies GDS content.

“They need to distribute a combination of ATPCO and API content that can be accessed by travel agents. Then we would be able to make significant progress.

“You have to appreciate this is going to take time. We should not forget that ATPCO has been around for 40 years. The new process needs to be just as efficient.

“Airlines work on slim profit margins. When you talk about changing the whole sales structure you need to maintain revenue in the meantime. You need travel agents to sell your inventory.”

He argued the new system “has to return more revenue to you, and that is not proven. It needs to be tested.

“We can do it, but we need to do it together and we need to plan. There is not an airline out there doing this effectively at the moment. Planning is not happening. We need discussions and it is not happening.”

However, Heywood insisted API distribution promises “huge benefits to airlines”, saying: “One of the advantages low-cost carriers have is distribution by API.”

It would allow “opaque pricing”, he said: “You don’t need to publish fares, [and] it will increase third-party competition.”

Malaysia Airlines group chief executive Peter Bellow said: “GDSs still have incredible importance for full-service carriers, particularly in the business cabin, and I don’t see that changing quickly.

“Full-service bookings are funnelled through travel agents – 90% of business flights in Asia are booked through agents.”