"We have a very small percentage of transactions that are NDC enabled at this point," International Air Transport Association VP Doug Lavin said. "We're not happy about that." During a U.S. Transportation Department hearing this month, he directed frustration at global distribution system contract provisions that, he said, inhibit progress on the New Distribution Capability standard.
Historically, the cash incentives paid by global distribution system operators to travel agencies have risen at a slow but steady year-over-year clip. For 2018, though, all signs point to a greater-than-average acceleration in incentive payments, according to GDS financial data, executive commentary and industry observers.
Travelport and Japan Airlines on June 1 plan to launch a joint venture that will bring Axess—the JAL-owned local market distribution system—and the Travelport Japan K.K. GDS business under one roof.
For several years, Amadeus' global distribution system business was on a tear. In the five years leading up to 2018, it gained a net 5 percentage points in market share of airline bookings processed by major GDSs worldwide to solidify its position as the alpha GDS. Last year, however, Amadeus' air booking share bucked the trend with a rare contraction, albeit by less than a percentage point, the company reported Thursday in full-year and fourth-quarter results.
India-based Airlines Technology is entering the U.S. market as another NDC aggregator but with a different pricing offer for TMCs.
Global distribution system segments processed by Travelport—including air, hotel, car and rail—fell 4 percent year over year during the third quarter amid "customer headwinds," the company reported Thursday.
Australian flag carrier Qantas introduced a new commercial structure for travel agencies to promote adoption of New Distribution Capability-compatible connections, either through a global distribution system or another approved tech provider. Its pitch to agencies includes the threat of a $12.50 per-segment surcharge on GDS bookings and diminished content access but also a private channel-type framework as a path for agencies to avoid both.
Amadeus during its third-quarter results presentation Wednesday acknowledged that moves by the three largest European airline groups to surcharge global distribution system bookings and drive bookings directly to their own channels are playing a role in disintermediating the GDSs. Yet, CEO Luis Maroto said he wasn't too worried about an acceleration in disintermediation.
As it prepares for divorce from the European Union, the U.K. no doubt has bigger priorities than to iron out its governing regulations for airline distribution and global distribution systems. Opting to maintain the status quo, the U.K. has chosen to adopt, upon its March 29 exit from the EU, the European Commission's decade-old computer reservations system code of conduct.