Boyan Manev, vice-president of business development and product marketing, Vayant Travel Technologies
Airline ancillary services are a hot topic.
Today, unbundled services like extra baggage, premium seating or airport lounge access account for more than 5% of airline revenues and that figure is growing fast, more than doubling since 2009.
With United Airlines generating $5.1 billion from unbundled services last year, ancillary is big business.
At Vayant we’re delighted to see the speed with which the industry has embraced ancillaries.
Unbundling of services means more transparency and more choice for the traveller: this is the spirit of our customer-centric age where the travel industry re-orients itself around customers, their needs, their preferences and their behaviour.
By bringing together the big stakeholders in global travel through its NDC (New Distribution Capability) initiative, Iata is helping propel the industry towards human-shaped shopping, with a retail experience that delivers more of the flexibility and choice that people expect to find when they shop online.
Yes, at this stage in the process there is a degree of horse trading between the stakeholders, which has received a lot of coverage in recent weeks.
But the logic behind NDC is very compelling.
Talking to our B2B customers – who span online travel from airlines to online travel agents and metasearch engines – we see clear benefits for everyone in the ecosystem.
For airlines, unbundling and wider distribution of ancillaries will unlock new revenues.
Even now, many airlines fail to sell ancillaries effectively through their own channel, let alone through third parties.
And NDC also offers intriguing opportunities to grow customer loyalty through personalisation. For example, by targeting valuable customers with free service, like extra legroom, as a reward.
Online travel agents also stand to benefit. Today, it’s just not possible for customers on OTA sites to tailor their flights.
With NDC, travel agents can offer all the tweaks and added value services customers need to find in a one-stop travel shop.
And, again, there will be scope to offer personalised offers and rewards to returning customers.
At Vayant we sometimes talk about ‘the proactive travel agent’: a travel agent totally focused on giving customers great shopping experiences.
Our travel agent customers see opportunities to do that thanks to NDC, and they are gearing up accordingly.
Like us, our B2B customers are prepared to give NDC a warm welcome. But there are still questions around booking that the industry needs to answer: questions which hinge on the fact that NDC relies on using data from airline-specific systems.
Interlining, which now represents some 30% to 40% of international air is a case in point. Two airlines in an interlining agreement may use different logic to execute ancillary services.
Say the customer wants to make a change to their interline booking.
At the moment, this would be facilitated by the GDS – but who would take care of customer support when NDC is in place?
We all want to give customers a seamless end-to-end experience: but who is actually responsible for making it happen in this scenario?
It’s critical that the industry moves to resolve this kind of questions as quickly as possible.
NDC means – at least when it comes to ancillaries – that we are talking the same language: the language of the customer.
So let’s get these issues fixed so we can all focus on giving the customer the flexibility and choice they deserve.