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You are here: Home » Publications » Airlines International » December 2012 » Soapbox: ARTA - New Distribution Capability

Something Old, Something New...

Bruce Bishins, President of the Association of Retail Travel Agents-Canada and Managing Director of ARTA USA

With all the hoopla regarding IATA’s New Distribution Capability (NDC), one thing is for sure: there’s a compelling reason to get involved, otherwise you risk being left at the gate.

Commensurate with the approval of IATA Resolution 787, a familiar page is being turned to enshrine, at long last, a new distribution capability that meets the needs of all stakeholders, including travel agents and Global Distribution Systems (GDSs).

IATA’s role is one of coordination, project management, and facilitation. There is no more experienced organization than IATA when it comes to airline industry standard setting, codes, and a high level of clarity. Make no mistake: IATA does not make industry resolutions; airlines do. And many airlines are committed to sweeping changes as to how airline products are sold and paid for.

Airlines are setting out to make big improvements in the indirect channel (read “travel agents”) because they have to. Obsolescence from anonymous queries, one-size-fits-all fares, and non-strategic offers for qualifying passengers are many things that airlines carp about, but have little control over other than their own websites and agent portals.

The NDC has borrowed best practices and message standards from Farelogix, Open AXIS Group, Open Travel Alliance, and many others, to form a starting point to achieve the carriers’ quest for a more effective way to sell airline seats. Now, instead of nameless, unidentified passengers, airlines can authenticate “who’s asking?” and put a face to the request for a more robust sales experience for airlines and travel agents.

As for the economic side, airlines no longer wish to finance and subsidize the booking segments they pay to GDSs only for them to be paid, in part, to travel agents. The writing on this wall has been around for a long time, and travel agents would be remiss to think that these incentives would not be eliminated sooner rather than later. Furthermore, airlines no longer wish to pay for expensive, arcane, outmoded displays of their services. Product differentiation is vastly important to airline marketing departments and their—and travel agents’— target passengers.

For the travel agency community, there is much at stake. We either get intimate with the NDC, or find ourselves eclipsed by airline websites or ever-emerging new entrants that want to sell travel.

There is a lot of work to be done, not the least of which is getting more airlines to adopt the NDC, encouraging third-party travel technology companies—including GDSs—to deploy the NDC, and persuading travel agents to actually use the benefits included in the NDC. From a new distribution of fares, inventory displays, and frequent flyer and loyalty program integration, to new ways of qualifying and querying passengers, all stakeholders have their work cut out for them.

For travel agents, travel management companies, and GDSs, there will be an impact on front-office selling, middleware facilitation, and back-office routines and accounting that will definitely alter the way things are done today. Let’s hope that travel agents are not persuaded by naysayers to ignore keys elements of this evolution. Travel agents need to be proactive, not reactive.

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