Air Canada on June 14 will start to add a per-ticket fee of US$20 to US$30 on bookings made through traditional EDIFACT-connected channels, the carrier announced Wednesday. The fee will not apply to bookings made via any of Air Canada's New Distribution Capability connections, including NDC-sourced content in a global distribution system, or through the carrier's other direct booking channels, according to the carrier.
The move is part of a series of distribution changes for Air Canada designed to drive bookings to direct or NDC channels.
"The financial model associated with classic distribution has become unsustainable," Air Canada SVP of products, marketing and e-commerce Mark Nasr said during a Tuesday media conference. "As part of this transition, we will be introducing a distribution recovery cost. It will be an amount applied to bookings that go over the classic EDIFACT old-school channel."
The fee will be based per ticket and will vary by global distribution system, Air Canada senior director of distribution and payments Keith Wallis said. "We will publish specific rates closer to June 14, but I can confirm the range will fall between US$20 to $30 per ticket," he said. "But it is important to note we've created many options where the fee doesn't apply."
The carrier plans to add content to its NDC channels as opposed to removing it from legacy channels, executives said, a noted difference from the approach American Airlines took when it launched its new NDC requirements on April 3.
"Our No. 1 goal with this transformation is to do it in a way that is smooth and not necessarily disruptive for the trade and for our joint partners," Nasr said. "We talked to agencies and systems providers to make sure we understood their view of what is disruptive, their view of what other airlines have done that we can learn from to inform our strategy."
The carrier also is offering a $2 coupon beginning June 14 and available through the end of 2024 "to support agency transition and will apply to eligible NDC bookings made directly with an Air Canada NDC API connection or via select NDC certified technology partners," according to the company.
Additional NDC Content
Air Canada's cited what it called "three pillars" of its distribution strategy for NDC and direct channels.
First, effective immediately, Air Canada's domestic basic fares will be available in NDC channels. The low-cost fares were launched last summer on the carrier's website only, but now are available in NDC.
Second, today, there is no differentiation by channel in how seat requests are evaluated, Wallis explained. "Starting June 14 that will change, he said. "We will have two sets of business rules." The carrier is not changing how EDIFACT requests are made, but for NDC in direct channels, it will leave available seat inventory buckets open longer, he explained.
Third, also on June 14, Air Canada will start changing prices for paid seat products. "Currently we have advanced seat selection and preferred seats, and those ancillaries will be less expensive in our direct channels than over EDIFACT," Wallis said.
Other NDC Benefits
Nasr said that legacy distribution channels technology can't fully support via third-party partners offers the carrier has via direct or NDC channels now, such as Air Canada for Business, its small and midsize company program; FlightPass reservations, which will be coming to NDC later this year; new ancillary options; promotional codes; and rich product information. Further, the new NDC program offers the elimination of select debit memos. The gap between what is available in the legacy system and what is available in NDC will only get larger, Nasr said.
The carrier will be able to retrieve orders and make changes, cancellations, voids, and refunds and is in the process of implementing support measures when travel is disrupted, Wallis said. Planned additions include self-service options and order-change notification. The carrier also is laying the foundation in NDC for continuous pricing, Wallis said.
"We will have 24/7 real-time monitoring on the NDC channel, near-real-time performance status, and we will be very public about how well or not well our NDC channel is performing," Wallis added. "We also are hiring people in distribution, sales and the IT team dedicated to NDC. We have clear escalation procedures. When things go wrong, we will have access to people and processes to get a quick resolution."
Options for Travel Agencies
"Retailing change is coming, and I can't promise it won't be uncomfortable," Air Canada VP of global sales and Air Canada Vacations Lisa Pierce said. "We recognize the efforts and resources involved in a transition and the potential for disruptions. That said, we have to be practical and have to start somewhere, and we don't want to leave anyone behind."
To that end, the carrier is offering four options for travel agencies to access NDC content. The first is what it calls the "build" option, for agencies with in-house technology resources they control, said Wallis. They can connect through what the carrier said was a comprehensive set of APIs and a test system with code, with a team dedicated to support them through the implementation and into production.
For what it called the "buy" option, Air Canada has pre-connected the new NDC APIs into most of the leading "usual suspects in third-party travel distribution," Wallis said.
The "free" option is a web-based Air Canada NDC booking tool that has only Air Canada content.
The last option, connecting through a global distribution system, is offered because "in all discussions, we heard very clearly from travel agencies that a GDS-based NDC option was extremely important," Wallis said. The carrier earlier this month announced that Amadeus would provide its NDC content, which will be available in the Amadeus platform in June.
Pierce noted that Air Canada began discussion with stakeholders last fall. "We had 28 in-depth interviews with agencies and forums with corporate customers to inform our approach," she said. "We have an advisory panel of online agencies, corporate [travel management companies], and independent and leisure agencies. … We messaged that this is coming, and we don't suspect it will be a surprise."
RELATED: Amadeus to Offer Air Canada NDC Content