NDC has the potential to offer much more to corporates and travelers. But who is going to pay for it?
Travel buyers should start including questions relating to NDC, APIs and distribution in their RFPs for travel management companies, self-booking tools and airline sourcing projects.
That is the view of travel managers at a number of large multinational organisations who have been involved with IATA though the Travel Manager Advisory Group (TMAG)
TMAG has issued an open letter addressing not only travel buyers but also TMCs, airlines and technology providers.
TMAG, which includes buyers in Europe and North America from companies including Amazon, Allianz, Microsoft, Nestle and UBS, believes that “it is highly beneficial to be engaged and contributing to the development no matter how tough or complex the dialogue, and that only through asking questions and providing perspective will we progress in a collaborative fashion”.
The buyers on the group have specifically asked TMCs “to focus on removing any barriers to ensure that we can get the content we need through the desktops and booking tools our travellers use”.
So what questions should travel buyers be putting in their RFPs?
IATA held its third business travel summit in June, involving buyers, suppliers and intermediaries. You can see the presentations made on day one and day two here.
There were some clear messages.
One was that NDC needed to go beyond fares and paid ancillaries.
Roman van Alten, manager of international distribution strategy for American Airlines, talked about how NDC could enable corporate product and service bundles, such as a corporate VIP bundle offering lounge access (regardless of fare booked), priority boarding and onboard Wi-Fi or a long-stay bundle offering a second bag.
Johannes Walter, senior director, distribution, global market management at Lufthansa talked of an NDC-enabled world in which we move away from static fare classes and towards dynamic fares.
Gianni Pisanello, VP of NDC-X at Amadeus, said NDC could deliver more granular travel policies for corporations and bundling of non-airline products, such as meeting rooms and visa services.
He added that this needed to be coupled with “the right economics for the right investment”.
And herein lies the problem.
Speaking at the summit, HSBC’s head of transport equity research, Andrew Lobbenberg, said that between the Wright Brothers’ first flight and 2014, airlines had not managed two consecutive years of creating economic value. This changed in 2014 but the outlook is not great thanks to increasing price of oil.
Many of these ideas for examples of how NDC could be used would bring great value for corporates.
If travel managers are being encouraged to ask questions in their RFPs, they will need to be along the lines of this: “I want X, who is going to pay for it?”