Iata and European agents’ group trade blows over impact of NDC

Airline association Iata has claimed “travel agencies worldwide” support the introduction of its new distribution capability (NDC) and insisted global distribution systems (GDSs) are to blame for the imposition of fees on GDS bookings. Continue reading →

Airline association Iata has claimed “travel agencies worldwide” support the introduction of its new distribution capability (NDC) and insisted global distribution systems (GDSs) are to blame for the imposition of fees on GDS bookings.

But Michel de Blust, secretary general of the European travel agents’ and tour operators’ association ECTAA, hit back at Iata insisting that NDC threatens “fare transparency and price comparison”.

Iata head of NDC engagement and adoption Olivier Hours joined de Blust in addressing a public hearing of the European Parliament’s Committee on Transport and Tourism on ‘Airline distribution channel discrimination’ in July.

Hours told the committee of MEPs: “There is a problem in airline distribution due to a bottleneck between providers and consumers.

“The bottleneck happens because there are only three CRSs [GDSs] in the EU.”

He argued: “An airline may pay up to €40 in CRS fees when the total airline fare is often below €100.

“On top of high costs, CRS contracts prevent airlines from distributing content freely. As a consequence, airlines refrain from creating lower fares and this harms the end consumer.

“If an airline wants freedom to distribute the way it wants, the CRSs roughly double their fees.”

Hours insisted: “Airlines are trying to change distribution for the benefit of the end consumer. NDC will enable the consumer to have more transparency and to purchase all sorts of products and services.”

He said: “The good news is the CRSs support this new standard and travel agencies worldwide support it as well.”

But Hours added: “Large travel agents are a bit afraid of these changes because of the money they get from the CRSs.”

However, de Blust told MEPs: “What would you think if before entering your favourite supermarket you have to swipe your supermarket card and you only see the prices the supermarket would like to show you? This is what NDC is about.”

He said: “NDC is a standard aimed at collecting a lot of customer data before showing the customer a fare on one airline.

“It poses problems on fare transparency and comparison [of prices].”

De Blust said: “With the unbundling of air fares you end up having to pay for the ticket, pay for your luggage, pay for your seat and we are not far from the time when we will have a pilot surcharge if we want a pilot.

“Airlines call this ‘enhancing the consumer experience’. We feel it is a jungle of fares, taxes and fees.”

MEPs heard testimony from a series of senior industry figures and a representative of the European Commission and pledged: “This is just the start. We’ll be talking at greater length about this.”

Travel Weekly will shortly publish a full transcript of the hearing, which has not previously been made available.