Global distribution systems (GDSs) will beat Iata member airlines to develop ‘Amazon-style’ shopping platforms for agents selling flights and ancillaries.
But that won’t stop leading airlines pushing Iata’s New Distribution Capability (NDC) as a means to break the dominance of GDSs in third-party distribution.
That is the view of Ken McLeod, corporate director of Advantage Travel Centres, who sits on the Iata steering committee overseeing development of the airline association’s NDC standards.
McLeod told Travolution sister site Travel Weekly: “The GDSs have moved rapidly to get ahead of the game. Travelport has brought in a lot of APIs [Application Programme Interfaces] and a fair amount of travel management companies (TMCs) are impressed with the new functionality. People are excited by the potential.”
APIs allow a GDS or other provider to access fares from an airline’s reservations system, cutting the need to input fares and ancillary data in the GDS.
McLeod said: “NDC is still probably two years away. But Travelport is one of those likely to be out there in six months with something that looks like NDC.”
However, McLeod said: “The airlines want to open the market to other technology providers. They want another three suppliers so the price point [for GDS display] changes, and an awful amount of money is going to be spent on it.”
At the same time, he said: “The GDSs want to retain exclusive agreements with the airlines.
“Everyone is trying to protect their position. The corporates are suspicious of the airlines and the TMCs. The TMCs are suspicious of the airlines, the airlines are suspicious of the GDSs and the GDSs are suspicious of the carriers. It is a conga line of suspicion.”
He added: “There is competition over who is going to be first. The GDSs are fighting their corner and the only way to do that is to create the product and get it out there. Yet I’m not sure that will satisfy the airlines.”
McLeod said: “No one is suggesting this is about direct-sell. What the airlines want is to sell more ancillaries and cut the cost of sales through GDSs.
“They aim to open the market to more providers, halve GDS costs and increase their sales revenue.”
Aleks Popovich, Iata senior vice‑president for industry distribution and financial services, said in June: “Technology is not the issue. We want to see new entrants. The airlines want to be in charge of pushing their product through all channels.”
One problem, according to McLeod, is that the people developing NDC are not involved in selling. “It is a big learning curve,” he said. “[They have found] the US market is different to the UK and the UK different to Germany. They are having to narrow the remit. But the fundamental issue is the airlines have not got the back-end ready for NDC.”
Iata and UK technology company Thoughtworks recently developed an NDC prototype that McLeod describes as “almost like an Amazon shopping experience – but it’s slower than a GDS”.
He said: “Iata has started to get into the nitty gritty of how frontline staff will cope with NDC. But so much of it is about functionality. There are real challenges.
“Iata is working on the business requirement documents – the shopping aspects of NDC. The fundamentals behind it still have to be done.”
McLeod added: “Iata has not been good at the PR aspects of this. Communications are haphazard.”