American Airlines' mandate that travel agencies and other third parties be connected to the carrier's New Distribution Capability channels or risk losing up to 40 percent of AA content took effect today. While many in the travel ecosystem have said they would be NDC-ready by now—and that can have many definitions—some travel buyers were looking to workarounds to ensure access to the fares American pulls from EDIFACT-connected channels.
In addition, the American Society of Travel Advisors sent a letter to members today indicating American did not respond to its March 8 outreach requesting the carrier delay NDC implementation until the end of 2023. As a result, the association last week said it sent letters to both the U.S. Department of Transportation and the U.S. Department of Justice alerting each to the "serious concerns" ASTA members have about the NDC implementation and the "disruption" they believe it will cause, the association announced Monday.
The letters cited that most of the key players—global distribution systems, travel management companies and third-party booking technology partners—have stated they are not adequately prepared to facilitate full NDC implementation. Without complete fulfillment systems ready to process NDC transactions, time spent servicing AA tickets "will increase dramatically," which could possibly lead to higher service fees, according to the DOJ letter. Changes and tracking unused tickets also will present new problems, especially for business travel, according to the letters. And wait times for servicing could become "far more challenging," according to the DOT letter.
In short, the letters focused on the issues that could negatively affect consumers who use a travel agency or business travelers required to do so by their companies.
Meanwhile, the No. 1 concern among many buyers has been uncertainty, especially about exactly which fares no longer will be available through legacy channels. American has indicated that a fair portion of the NDC-only fares would be basic economy or other fare types that business travelers typically don't purchase. But some buyers aren't so sure. Buyers also expressed to BTN concerns about travel management company readiness and servicing and the potential effect of American's move on their bottom line.
ZS travel and meetings manager Suzanne Boyan said she does not plan to have full access to American's NDC content on April 3, but will "sometime in April." Boyen said her company and her TMC since March have partnered to access United Airlines' NDC content.
"It takes a significant amount of time from agents as they learn this process and have to implement new technology," she said. "You've incurred costs because of those choices."
Boyan chose to apply the same TMC servicing fees for NDC and other content, citing the importance of price stability for travelers. "[Different pricing was] going to create more issues," she said. "We just want one price across the board. And it was high because they had to implement new technology, and the TMC lost out on revenue from the [global distribution system] and had to be made whole."
One buyer, speaking on condition of anonymity, cited concerns around fare transparency and comparability. "I don't think you'll get that in this new scenario until the ecosystem catches up," the buyer said during an interview Friday. "We may be able to access NDC content in the near future, but the concern comes on the serviceability once the ticket is booked. As for today, the TMC side is not ready. They're prepared to service in an offline environment, which will cost more to travel buyers."
Another buyer said that there would be significant financial disadvantages for companies that do not use the NDC channels. "I believe we are going to be able to measure that very quickly, and the price differentials will be significant when you are talking about the volumes that corporates spend," said ITW director of global T&E Cathy Sharpe. With higher volumes, "$100 on a segment, or even $20—that is huge money out the door if you are not using an NDC channel. I think that is a concern."
Capturing Direct Bookings
Some buyers worry the potential differentials in pricing for fares in NDC and non-NDC channels will lead more corporate travelers to book outside of the corporate travel program.
"We get that basic economy is going to be part of NDC going forward, but the bundles around the flex fares, that is where I have some concern," a travel buyer in the insurance industry, speaking on condition of anonymity, told BTN, explaining a traveler could see desirable fare bundles at lower prices and book through direct channels. "That is where it will get sticky," they said.
Sharpe said her company uses SAP Concur's TripLink tool for preferred partners only, and American already is on that channel. TripLink, once set up, can capture direct airline bookings and include negotiated rates in a traveler's booking options as well as "anything American wants to make available for the travelers," said Concur Travel president Charlie Sultan, adding that TripLink launched with American in 2018.
Off-channel booking aggregator Traxo can capture direct bookings by detecting travel confirmation emails. Boyan said ZS is a client.
"Do I think [direct bookings] will happen? Yes. Am I concerned about it? No, because we have Traxo," Boyan said. "We will still get the data. I'll be covered from duty of care and data visibility."
Traxo and TripLink executives each said they will be able to capture all of American's NDC fares on April 3.
Since American's December NDC announcement, Traxo founder and CEO Andres Fabris said he has seen an increase in interest in his product from non-clients. "We've incorporated NDC into our marketing, demos and sales presentations, so folks we've been in process with are accelerating," Fabris said. "Then, net new interest coming in is moving more quickly because the NDC challenge is really resonating right now."
The company also is in a pilot program with American Express Global Business Travel to capture the bookings of a pilot client, a "large BTN top 10 spender of travel in the world," Fabris said, adding that the client data is going directly to Amex GBT globally—both its in-program and non-program bookings. "All other systems are integrated, and now GBT is able to extend their analytics and reporting and processes to include off-platform bookings as well."
TMC NDC Readiness
It can be difficult to pin down precisely what the notion of "NDC readiness" really means, as different parties have different viewpoints.
An executive from a TMC that participated in an American NDC pilot noted that the shop, book, pay and view aspects of an NDC ticket sale were the "easy" part, but the company is finding problems with post-sales support and exchanges in different use cases.
"That is where we spend most of our time," the TMC exec said. "And we were not provided with the capability to test this exchange in those use cases until recently. The capabilities for exchange are not full and robust."
This TMC also was limited by American to five test exchanges, the exec said. In prior proof of concepts in which it's launched pilots with its customers, "we went through hundreds of test cases and scenarios and multiple tests of the same scenarios," they said. "It brings us to where we are today. The go-live [today] puts the whole industry in a scenario where you have to make a choice of, do you want to go untested and release that to the wild, or do we want to thoroughly test and make sure it is fit for purpose of our customers?"
The TMC also found that a ticket cannot be voided after it has been exchanged. "That was a scenario we tested, and it did fail," the exec said.
Boyan said in her experience with United's NDC, unused tickets can be a problem. "What we're finding is that it's difficult to apply unused tickets through either the travel agency or through the OBT, which is how most of our people like to utilize our AA deals," she said.
The TMC executive said new products typically are launched only when they meet criteria for minimum viability.
"We've been forced in these scenarios to launch even before that," the exec said. "It's one of the more misunderstood items about what is going on in the industry. There's fingers and blame pointed everywhere. At the end of the day, if this was working as we have in today's world, it would just be the flip of the switch, as long as it was thoroughly tested. Everybody is having to make trade-off decisions at this point in the maturity of NDC, and this probably is the biggest problem."
Still, both Sharpe and Boyan said they believe in NDC. "Even though this is causing a lot of disruption, sometimes disruption can be good," Sharpe said. "It can make everybody better, and hopefully that is the case this time around. That doesn't mean I'm not worried, though."
For Boyan, "in a lot of ways, I'm really excited," she said. "It moves the industry forward with a swift kick. I'm a big proponent of making the retail experience more like the online experience. I think the issue I take is with the opaqueness of the information surrounding it. In theory, I don't think four months is enough time to prepare. [But overall] I think it's a good thing. I just wish [American] had approached it a little differently."