Agencies moving from commodity to value selling
The world of airline retailing is changing, and the transformation the industry is going through in distribution and finance is being impacted by broader long-term global trends.
And, according to Yanik Hoyles, IATA’s director of industry distribution programs, as far as the travel agency sector is concerned, it’s going to be a case of “if you engage me to sell your product, you have to include me.”
Hoyles told a Geneva press briefing that the picture is already changing, citing UK online agency ClickTravel which is moving from commodity to value retailing and India start-up Airlines Technology, which has built an interface displaying rich content; allowing the customer to make the buying decision on the basis of what he or she values other than just fare and time.
Control and transparency
He also pointed to United Airlines which has joined forces with start-up business travel agent TripActions out to display the first corporate bundles offering greater control and transparency.
Hoyles explained that IATA’s role is driven by its New Distribution Capability (NDC) initiative, stating, “Successful retailing requires airlines to know and understand their customers better; to be able to provide personalized offers that meet their needs and to differentiate their products, while making the fulfillment and payment of orders as simple and seamless as possible.”
He told reporters, “In order to pave the way to critical mass, IATA has set up the NDC Leaderboard of airlines comprising 21 carriers (including Air Canada), which account for 30% of total IATA
passengers and who collectively aspire to have at least 20% of their indirect transactions via travel agents coming from their NDC Application Program Interface (API) by the end of 2020.”
Embarking on the journey
And he declared, “This is excellent news as the airlines are being open about their commitment to NDC and, as a result, other value chain players – technology providers, GDSs, travel agents and buyers – see the opportunity to embark on this journey and to also invest in the future.”
Hoyles stressed, “This approach is not just about the Leaderboard airlines. To achieve the 20% critical mass, they will have to break down the major barriers to adoption; sort out the technology and agree new commercial terms with their partners, as new value will be coming through the chain.”
“As a consequence,” he added, “When the ʻfollowers’ then choose to embark on a similar journey the access to the NDC ecosystem will be much easier, faster and more cost effective.”