|AGENT GROUPS INFURIATED WITH NEW IATA DISTRIBUTION PLAN |
IATA’s approved proposal for a new airline distribution capability has travel agents and agency groups concerned. The New Distribution Capability (NDC) was adopted at the World Passenger Symposium in Abu Dhabi last week.
|Tony Tyler, CEO, IATA
IATA says the new model is intended to let airlines differentiate their products beyond simply ticket prices.
Agency groups in Canada and the U.S. are concerned that the NDC will lead to an evaporation of pricing transparency, which could cause sweeping effects in the travel agent community.
ACTA has said that it is “infuriated” and “frustrated” with the announcement and believes that IATA’s decision will lead to an increase in the operating costs for travel agencies while challenging consumer protection.
"It is critical to understand all the facts and implications that IATA's new distribution model will have on travel professionals but it has been "transparent" to ACTA that Mr. Tyler and his team have not been forthcoming and have no intention to open up as it relates to the development of the New Distribution Capability, said David McCaig, president and COO, ACTA.
ACTA said that it, along with the WTAAA and Open Allies, is fighting the NDC at all cost.
Comments made by Tony Tyler, CEO, IATA, said the NDC will enable the industry to offer more options to consumers and service them more efficiently "regardless of distribution channel". Tyler added that "it is impossible for the airline to tailor its offer to the customer via the indirect channel... this model is focused only on finding the lowest ticket price which is commoditizing air travel even as airlines innovate their products."
Tyler noted that airlines are developing products and services but that the travel agent only sees codes which cannot fully describe options available.
"I am incensed by these insulting remarks and will be challenging Mr. Tyler on them. Agents sell what is available to them and understand exactly the products in which they are booking their clients, all within an environment that lacks the transparency it deserves. We have no doubt that the long term intent of the NDC is to reduce or eliminate GDS fees charged to the Airlines which affects the bottom line for the booking agent," commented McCaig.
In the U.S., the American Society of Travel Agents (ASTA) and the Business Travel Coalition (BTC) voiced opposition to the move following the announcement.
“ASTA sees nothing in the IATA process to create NDC that resembles full and open transparent collaboration with the travel agent community,” Nina Meyer, CEO, ASTA said is a release.
“While we are still conducting due diligence with regard to understanding all the facts and implications flowing from IATA's new distribution initiative, it's reasonable to preliminarily conclude from discussions with and presentations from IATA that there is reason for significant concern over negative impacts to consumers, competition and costs. A disturbing warning sign - that all is not right - is that IATA pointedly talks about an open and collaborative industry process, yet refuses to let organizations that represent travel agents and corporate travel departments have a seat at the table. IATA only welcomes individual travel agents or travel managers who are largely prevented from speaking up for fear of retaliation on their businesses or airline contracts," commented Kevin Mitchell, chairman, BTC.
During the annoucnement of the NDC, Tyler said the internet's reshaping of the airline landscape led to the distribution plan.
“The internet economy has fundamentally reshaped the ways in which sellers and consumers interact. Customers expect to be recognized when they shop online. And they are used to receiving tailored offerings based on their past purchasing behavior. Airlines are able to participate in this new model with those customers purchasing directly from their websites. They can recognize return visitors and make offers based on travel history, loyalty status, credit card brand or other metric. And customers have complete visibility of additional products and services on offer,” said Tyler.