Last week, a group of travel management companies in an open letter likened New Distribution Capability to a "half-built house." They want to deliver on the standard's promise of richer content for clients, they wrote, but they must enable their own new distribution capabilities to "fulfill customer requirements of comparability, policy control, cost management, reporting and duty of care."
United Airlines during its quarterly earnings call last week reported double-digit-percentage growth in corporate revenue on a year-over-year basis. With revenue come selling and distribution costs, and Wolfe Research analyst Hunter Keay seized on one of them: the "alarming" growth in commissions paid to travel management companies.
"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.
British Airways this spring will expand the number of price points available for its European short-haul business class product, having already instituted a similar concept for short-haul economy class. Agencies will need a New Distribution Capability connection or will have to go to the airline directly to access the full range of BA's additional price points, the airline stated this month.
Last month, Air India stopped participating in the Amadeus global distribution system, and the carrier plans to limit participation in Sabre next year. The actions follow an exclusive distribution agreement Air India inked with Travelport, which will see the GDS operator, hungry for growth in India, become the sole distributor of Air India's domestic fare content in the carrier's home market.
Travel management companies are assessing American Airlines' proposal to pay agencies $2 per segment for transactions processed through its Farelogix-powered New Distribution Capability pipe. While the incentive amount from American is clear, the cost and effort agencies would shoulder to facilitate NDC connections is anything but.
Delta Air Lines stressed that it wants to ensure consistency, transparency and choice across all distribution touch points. VP of global distribution and digital strategy Rhonda Crawford and managing director of global distribution strategy Jeff Lobl caught up with The Beat.
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.
The number of full-time employees at global distribution system operator Travelport fell nearly 8 percent to 3,700 at year-end 2018 from 4,000 at the end of 2017, according to disclosures in the company's two most recent annual reports.
Ryanair has long maintained an aggressively direct-first distribution philosophy. It calls Ryanair.com the most heavily trafficked airline website in the world, as well as its preferred platform to keep distribution costs down, nurture direct relationships with customers and, not least, sell them an array of ancillary products for which the low-cost carrier is famous.