It’s one of those bizarre quirks that the airline industry finds itself this spring with two 787s needing to get off the ground.
No one doubted the 787 aircraft’s return to service. But the flight path remains less certain for Resolution 787, IATA’s application with the US Transportation Department to approve an agreement that would establish the framework for its New Distribution Capability (NDC).
Resolution 787 and NDC, IATA’s proposed new set of standards and procedures for how airlines better manage the distribution of their services and products, has met with considerable opposition. In particular, the US-based Business Travel Coalition has effectively created an anti-Resolution 787 campaign that has cast NDC as anti-competitive, a cunning way to bypass travel agents, a violation of privacy rights and a bid to end airfare transparency.
All of this is bunkum.
NDC undoubtedly is a big-thinking, ambitious plan and a potential industry game-changer. It would also shift more distribution control from intermediaries to the airlines, which is how it should be. But NDC will not bypass travel agents – in any case, airlines can already elect to ignore agents– nor will it limit an agent’s or traveler’s view of comparisons. Quite the opposite. One of the frustrations among airlines is that they have invested in new and innovative products that improve and broaden customer choices and allow passengers to tailor their services, but the GDSs have failed to keep pace. So customer options are not always available or even viewable unless a consumer goes direct to an airline’s website. NDC would make options and comparison-buying more consistent, transparent and customizable regardless of how a passenger chooses to make a reservation. It could also attract more budget carriers into the distribution system, further widening customer choice and allowing passengers to more easily make side-by-side price comparisons. Importantly, NDC is a non-mandatory, XML-based data transmission standard. It has nothing to do with how airlines price their offers.
The privacy accusation is also a red herring. NDC won’t require any more personal information than is required by today’s systems although passengers can volunteer information for more customized offers, as is the case now.
DOT, in its review of Resolution 787, must carefully study and understand the true motives behind BTC’s campaign, which is an effort to maintain the status quo, hang on to old technology and preserve a lucrative business model for the big GDSs. DOT should seriously question what the naysayers are so afraid of.
IATA member airlines, meanwhile, must do their share of the work to ensure NDC flies. They should show unity and provide strong support for NDC as it works through trials and pilot tests so that ultimate adoption of this new standard is assured.