American Airlines on Monday alerted travel agencies that they need to be connected to the carrier's New Distribution Capability technology by April 2023 to ensure access to its full range of third-party public channel content, according to an American memo reviewed by BTN. A similar memo was to be sent to corporate customers.
Without this NDC connection, American estimates that agencies will lose access to "over 40 percent of fares available today via third-party legacy technology channels."
The notice comes about six weeks after American announced it had signed new agreements with the three largest global distribution systems—Amadeus, Sabre and Travelport—to expand the carrier's NDC content. At that time, Amadeus and Travelport already provided American's NDC-enabled content, with Sabre set to be ready "in early 2023."
Sabre's access will be in place by April, American managing director of airline retailing Neil Geurin told BTN.
In addition, through an NDC connection, travelers will have access to "enriched content with more descriptive information," a seat map at the time of shopping, all available enhanced third-party public channel content including enhanced offers, ancillary products and the carrier's lowest fares, as well as enhanced functionalities and servicing features.
"The conversation [with agencies] has been ongoing for a very long time," Geurin said. "Most of the [travel management companies] that we talk to have access to NDC content for some carriers, so they've already figured out a way to connect to this. One thing we've done a little bit differently than everyone else is we waited until we were in the GDSs with NDC to launch this process, which greatly simplifies the connection."
"We've talked a lot about this journey, and it's just another step," American SVP and chief customer officer Alison Taylor added. "While they may not know the 40 percent [figure] yet, they may not be surprised. Most of them are already ready or will be ready. We're here to help people get ready, and we've reallocated some resources to be dedicated around NDC as well, to help the customer through this."
TMCs React
Some TMCs' immediate reaction Monday was mixed.
"We do think it's a positive, and it's time for someone like American to force the issue," AmTrav CEO Jeff Klee said. "We've been talking about this since 2015, and clearly no one is moving fast enough."
Although the announcement was "not unexpected, it would have been nice to have more of a heads up," ATG CEO Tammy Krings said. "It would have felt more organized and structured if there would have been a bit more sensitivity at how they distributed the message. A face-to-face meeting would have gone a long way. There are a lot of questions that come with something like this."
Both AmTrav and ATG are already NDC-ready, their executives said.
Still, Krings noted that such a move requires new processes on the TMC's end.
While her company is NDC-ready, Krings said that often, it's a little dicey to be first on the market with something so new.
"I give them props for" being the first carrier to market with such an initiative, "but the fact is, most airlines don't truly understand the full operational dynamics of a TMC," Krings said. "They don’t understand everything we do. If there is NDC content, are we going to process refunds the same way? Are we going to process exchanges the same way? I don't believe they are fully prepared to answer all those questions, and April is a very, very close timeline for many companies. … I think it will be a stretch for many TMCs."
When asked about fees, Geurin was firm in that American would have neither surcharges nor a penalty for not being NDC-connected, other than not being able to access all the carrier's available content.
The carrier will, however, reward agencies and corporates for making sure they include American AAdvantage membership in their offers, Taylor said. "Some agencies have a one-click to join AAdvantage, and some [online travel agencies] and OBTs are doing that successfully. We will reward that behavior."
Further, the carrier will be able to offer bundles through NDC that are within corporate customer travel policies, officials said.
"We need to respect their policies and can do that through NDC. We can do specific bundles by customers that will support everything in policy so that is what the traveler is buying, not what is not in policy," Taylor said.
There also will be the ability for a second type of payment if a traveler wants to personally pay for an upgrade, Geurin said. Taylor added this is important with blended travel on the rise.
About "29 percent of our agency business comes through NDC today, and we assume we'll be at about a third by the end of the year," Geurin said.
One concern Klee had is about the "small percentage" of special offers—limited-time and exclusive AAdvantage-member-only offers—that will be available only via American-owned channels.
"Even though American says it's a small amount of content, it does a big disservice to their best customer," he said. "If a corporate customer has to check multiple channels to make sure they are getting the lowest rate, I don't think long-term that is in anyone's best interest." If a traveler finds a lower rate on AA.com "once, it creates mistrust between the travelers and the companies. Then they have to do all this extra work to double-check the price even if 90 percent of the time there is parity. It can bring outsized inconvenience to corporate travelers and their companies."
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