NDC take-off leads to turbulence
Is Africa ready to weather the storm?
After years of ‘talk’, IATA’s New Distribution Capability (NDC) is finally ready for its first steps in the ‘real world’. American Airlines as well as Air France and KLM had all made significant strides forward on the NDC front by April this year. Unfortunately, things have not gone off without a hitch.
Air France and KLM are gearing up to drive agents and TMCs off traditional GDS channels and onto NDC by making some of their cheapest fares on short- and medium-haul flights available through NDC only. Meanwhile, American Airlines also became the first US airline to overhaul its ticket distribution strategy through the implementation of NDC for 40% of its airfares. The change led to uproar with travel agencies in the US who have reported that the transition is causing price discrepancies of over 103%.
A US-based corporate travel agency mentioned on LinkedIn that 35 per cent of its itineraries had “lower fares in New Distribution Capability,” with average savings of $164 on those itineraries. The lower fares that can be booked via AA.com or through NDC could be seen as an incentive to book through NDC – but it’s also creating a challenging playing field for the travel trade.
The American Society of Travel Advisors (ASTA) went as far as saying AA’s NDC move could cause “widespread disruption and consumer harm.” The association fears the NDC will hamper a consumer’s ability to perform comparison shopping as well as limit a travel agency’s ability to service and exchange tickets as ‘old’ EDIFACT airline tickets can currently not be exchanged for ‘new’ NDC tickets. What’s more, interline and code share agreements become difficult with some airlines pushing NDC while their interline partner might not.
According to ASTA, many TMCs, GDSs and third-party technology partners are not fully prepared to facilitate NDC implementation quite yet. “Without key front, mid- and back-office travel fulfilment systems ready and able to fully process NDC transactions, significant disruptions to shopping, booking and servicing tickets are inevitable,” said President and CEO Zane Kerby in a letter to the American government. He added that the current challenges could cost travellers millions of dollars annually.
Will the business traveller benefit from NDC?
Despite teething issues experienced in the US currently, business travellers and companies stand to benefit greatly from the distribution modernisation.
The sale of ancillaries through NDC enables a more tailored shopping experience for corporate travellers, and a more efficient booking process for the travel booker and the company. Extras such as onboard Wi-Fi and airport lounge passes can be easily added to the booking, while the user-friendly environment created by NDC leads to lack of leakage as well as a much better tracking and reimbursement process. Simple things like frequent traveller status can be communicated much better across the value chain, allowing TMCs to have a much better overview of who gets priority boarding, or which traveller is on the waitlist for priority upgrades.
In a nutshell, travellers can expect greater flexibility, more content and better services in an NDC era.
Is Africa ready to embrace NDC?
None of the African airlines have currently implemented NDC. The reasons for this lack of implementation range from lack of the necessary infrastructure to limited resources and regulatory barriers. All eyes are currently on the Middle Eastern carriers to take the first NDC steps for Africa, and they have yet to implement NDC. That doesn’t mean South African TMCs are not ready to embrace NDC. Quite the contrary.
FCM is NDC-ready, which means the TMC is live delivering NDC content to its corporate customers. Currently, the TMC already offers some British Airways fares on NDC, while Air France and KLM are in the pipeline. There are also talks with Singapore Airlines, Qatar, Emirates and Lufthansa for NDC content. FCM is also working closely with IATA, airlines, and technology partners to make sure NDC delivers transparency, choice, consistency, cost-efficiency, and a seamless service experience.
Currently, FCM promises its customers:
1. End-to-end servicing
FCM will only sell airline content that works with all FCM existing servicing processes. So, prior to offering the content FCM ensures that functionality needed such as cancel, void, change flight, etc., is all working.
2. Disruption handling
Notification messages need to be transmitted from the airline to the agent and the passenger in case of time changes or flight cancellations. FCM ensures that customers can be assisted if there is a disruption to the passengers’ flights whether the booking is NDC or not.
3. Reliability of airline technological infrastructure
FCM has a Minimum Viable Product that the airlines must meet before the TMC will sell their NDC content. This provides assurance to customers that the risks associated with NDC are minimised.