By Emmanuel Mounier, Secretary General Global Travel Tech
In travel distribution, as in any other industry, collaboration between different players can be time-consuming. However, it often produces the best results for everyone concerned. American Airlines’ recent decision to engage with all partners on New Distribution Capability (NDC) illustrates this point.
NDC has the potential to be a positive development, as demonstrated by the efforts and investments of Global Travel Tech members to support its rollout. Delivering the fruits of this new technology will require all travel distribution players to work with each other, take into account the constraints that others face, and create outcomes that work for everyone.
The best way to ensure this is to put the customer first in every decision. American Airlines’ recent decision highlights that the travel industry is an ecosystem with various interdependent players. The airline acknowledges that measures linked to NDC quotas and air miles won’t work for everyone. CEO Robert Isom has made this point very clear: “We’ve spent a lot of time listening to our agencies and our corporate customers, and we are hearing their feedback.”
How did we get here?
It is true that last year American Airlines embarked on a policy that penalized those that did not meet quotas on NDC bookings. For instance, customers using intermediaries who didn’t book a certain volume using NDC could no longer earn air miles. This provoked a robust response from the intermediary community. The American Society of Travel Advisors set up the “Save My Miles” campaign and mobilized travel intermediaries and their customers to send thousands of submissions to US lawmakers. The association’s CEO railed against American Airlines’ abuse of its “dominant market position.”
It’s hard to say what the impact of this amounted to, but American Airlines was losing business, and this certainly made a difference. They experienced lower-than-expected revenue in domestic travel and what they called “softness” in close-in bookings. Their CEO Robert Isom admitted that this was “in part due to the changes that we have made to our sales and distribution strategy.”
Their new direction is the right outcome for the sector. American’s willingness to listen to partners is already bringing benefits not only for intermediaries but also for passengers. It reopens great potential for increased collaboration. NDC is in the ascendant, but the transition needs to take place in an open and constructive manner.
Certain Global Travel Tech members make NDC bookings in GDSs, some in other channels, others book flights in the GDS using established industry standards, and some embrace all of those options. Whatever channel or technology is used, what is most important is the need to provide a seamless and hassle-free experience for the end user. For now, having multiple options is good for airlines, good for intermediaries, and above all, good for passengers.