Agents Fear Move To End Fare Comparisons on GDSs


Airlines are set to revolutionise the way flights and ancillary services are sold through travel agencies in a move which some fear could make it impossible for agents to compare fares.

Under the new proposals, expected to be announced later today, instead of displaying their fares on GDSs, airlines will require agents to submit a travel request – including the passenger’s details – and they will respond with a customised quote.

Agents are concerned this will prevent them from accessing the best deals for customers and say it will also encroach on ownership of customer information.

Airline association IATA says the proposed New Distribution Capability (NDC) will allow airlines to offer customers booking via agents a more personalised service, similar to the service they receive when booking on the airlines’ own websites.

Agents account for 60% of ticket sales by value, but airlines are concerned that GDSs don’t allow them to tailor their offer to the customers and the model is focused only on finding the lowest fare.

IATA director general and CEO Tony Tyler said “Airlines are trying to escape the commoditisation trap through differentiation, and merchandizing. They are developing products and services, such as special meals, expedited boarding, roomier seats and access to airport lounges. But the travel agent sees only fare codes—F, J, Y and their various derivatives—which cannot fully describe options available. Customers expect more.”

Tyler said the solution was to develop an interface to sit between the airlines and the GDS. “One key outcome will be closing of the gap between airlines and their customers so that customised offers can be made to travellers even through travel agents,” he added.

If airlines vote in favour of NDC at a meeting in Abu Dhabi today, the new system could be up and running as early as next year. However, travel agent bodies claim the new system is being pushed through by a small group of airlines.

The European Travel Agents’ and Tour Operators’ Associations said a lack of detailed consultation with agents and questions over the legality of NDC within the European Union had tarnished the process.

It claimed IATA only started to engage on NDC with ECTAA and other travel agent trade associations in September 2012, despite their repeated requests to be involved since June 2012. Agents will have to develop systems and processes to accommodate for NDC distribution, it said.

“While a single standard to improve the distribution of ancillary services could be beneficial for the whole distribution chain, we feel there has been no consultation on whether NDC is the appropriate model”, said ECTAA president Boris Zgomba

Thursday, October 18, 2012

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