Travo Summit 2012: Iata’s NDC pilot could prove too ambitious

Airline association Iata’s move to establish a New Distribution Capability could prove overly ambitious, according to the European Technology and Travel Services Association (Ettsa).

Iata announced in October that it aims to set up a pilot Dynamic Airline Shopping (DAS) API between member airlines and GDSs next year.

If successful, this New Distribution Capability (NDC) would overturn the existing third-party distribution model and end the listing of airline schedules and fares on GDSs.

Ettsa secretary-general Christoph Klenner told the Travolution Summit in London: “NDC is a very ambitious project. Whether it is going to fly is another question.

“It is intended to change the way airlines sell. It’s driven by a small group of people. There is no real funding behind it.

“The question is will there be buy-in from GDSs, travel agents and OTAs?”

Klenner said: “There is a strong requirement on the part of suppliers to make distribution more efficient and for airlines to become better at retailing.

“There is a requirement on the part of consumers and regulators to have transparency and unbiased price information, because there is a bias of information in the travel market.

“The issue is about reconciling those two things. The airlines want to move to an environment in which, whatever channel consumers use, the experience is similar. But Iata has not been very good at involving others in the value chain.

“We are starting to make progress [on discussing the NDC], but we have not seen much on the table yet.”

Klenner told Travolution: “Unless Iata has buy-in from technology people, they will end up with a two-stream approach – with those who use the NDC and those who don’t – because 60%-70% of Iata members’ business goes through GDSs.”

Mark Lenahan, vice-president of product strategy at technology supplier OpenJaw, told the summit: “I can see the point of view of agents and OTAs.

“You’re competing for the customer’s attention when you compete with other retailers. When you compete with airlines, they are suppliers as well as retailers and that is more of a problem.”

Lenahan said: “A supplier takes their product and finds as many ways to sell it as possible. A retailer is not interested in selling one product. A retailer puts the consumer at the centre.

“Airlines are increasingly trying to do that and to become more effective retailers. But not many people get on a flight for the experience of flying.”

Brannon Winn, chief commercial officer of air fare search provider Vayant, said: “I don’t think third parties will disappear.

“On this argument that airlines and OTAs will take business from one other: the real question is who is going to grab the next piece of the pie.”

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