Iata has conceded it “underestimated the complexity” of developing New Distribution Capability (NDC) technology for airlines.
Aleks Popovich, Iata senior vice president for financial and distribution services, admitted the failing this week and said the association also made a mistake in not consulting corporate travel buyers.
But corporate travel managers and leaders expressed frustration, with one senior representative saying: “We’ve gone back years.”
Popovich told the UK Business Travel Association (BTA) conference in the Netherlands: “We did underestimate the complexity of NDC, yes.
“If we were doing it again, I would include the corporate customer, the corporate buyer [in discussions]. We were slow on that.”
He recalled his first attendance at a meeting of the Global Business Travel Association (GBTA) and admitted: “It was a revelation to me.”
But Popivich insisted: “We have listened. We now have a global travel management executive council.
“The travel agent relationship is key to the success of NDC. A lot of people don’t believe it, but airlines need agents, at least in away markets.”
He denied airlines’ desire to cut distribution costs were driving NDC development, arguing: “People say, ‘Surely NDC is to reduce cost’. But that is the minority [of airlines]. We asked airlines ‘Where do you see the benefits of NDC’ and 70% said revenue, 30% cost.
“Airlines want to show all their product through all channels. They need to find a way to persuade customers to spend more.”
Popovich told the BTA: “We are focused now on [developing] NDC at scale. We are seeing dynamic offers coming through with a number of airlines.
“We have 21 airlines on our [NDC] leader board, all looking to share practices. By the end of next year, we’re confident with the airlines on our leader board that 20% of indirect sales will be via NDC.”
He added: “My goal is to stop using the term ‘NDC’ and start using the term ‘offers and orders’ through all channels.”
However, leading travel buyers expressed frustration with the NDC process while one senior corporate figure told Travel Weekly: “There is no way 20 airlines will be ready in 2020 and Iata recently admitted as much.”
Stephanie Smook, regional director of the Association of Corporate Travel Executives, told the BTA: “Buyers are very frustrated. They don’t get answers. The airlines say they are talking to the corporates, but they can’t say who they are talking to.
“The partners point fingers at each other, but there are no answers. Travel management companies (TMCs) say it is the GDSs [to blame], GDSs say it is the airlines. We are going backwards.
“There is not a lot of confidence. A survey of travel managers found 85% did not feel they had the right information [on NDC].”
Jo-Anne Lloyd, partner at corporate travel consultancy Nina & Pinta, said: “Travel buyers saw NDC as a supply-chain conversation, but now it is hitting them where it hurts. Travel managers can’t get access to content.
“One travel manager I know is having to instruct travellers to buy outside company policy to get content.”
That is the result of leading airlines – including British Airways, Iberia, Lufthansa and Swiss – restricting fares available via global distribution systems (GDSs) and making all their offers available only to TMCs signed up to develop NDC technology.
At the same time, these carriers and Air France-KLM have imposed distribution fees on GDS bookings.
Lloyd said: “Corporates just want access to content [and] want their TMC to manage their spend, not necessarily the GDS to manage it.”
Nikki Rogan, global travel manager at TV software company Synamedia, agreed saying. “It is not going down well at all. People are not happy with the time it is taking to make changes.”
Suzanne Horner, new chair of the BTA and chief executive of TMC Gray Dawes, said: “NDC was not a collaborate process at the beginning. There was no real thought about the end-to-end process until we got involved [and] there are still major headwinds.”
The BTA, previously the GTMC, unveiled its change of name at its conference in Noordwijk, near Amsterdam, this week.
This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.