From its fragmented roll-out to its underdeveloped servicing capabilities, NDC has placed travel agents in an increasingly untenable position. Yet Travelstart Group CEO, Andy Hedley, believes that despite these challenges, adapting and adopting is no longer optional, but rather a matter of survival for agents.
NDC weaponised
While airlines argue that their transition to NDC has reduced their distribution fees, Hedley points out that airlines have fallen short of realising the broader strategic benefits originally envisioned for NDC.
“The basic fact is that airlines are not exploiting NDC. They have used it as a weapon in the fight with the GDSs, and the agents are the ones left carrying the can,” said Hedley.
Airlines jumped the gun
Hedley explains that airlines rushed their implementation of NDC without fully considering the decades of growing pains experienced by the GDSs, due to the sheer size of their inventories.
“Most of the airlines went into NDC without understanding what they were getting into. They didn't think about the backbones and the size of systems they would need to cope with the demand,” says Hedley.
He adds that GDSs previously insulated airlines from the true volume of availability searches happening globally on their systems. But when airlines starting implementing NDC, it made them aware of the extremely high volume of direct queries to airline systems which were quickly overwhelmed.
“We see airlines even today with poor response times on many routes. If NDC content is cheaper, then that is what will sell, but if the airline is too slow in returning the results, agents have to go to the customer with EDIFACT results.”
Hedley explains that underdeveloped airline systems and the fragmented implementation of NDC has had a great impact on the rate of adoption by agents.
A step backwards
He explains that the issue isn’t about agents being resistant to change, but rather than NDC presents many inefficiencies, from ticketing and mismatched offers and orders to limited servicing capabilities, such as schedule or booking changes, and unspecified changes to PNRs.
“The agents have been the caught in the crossfire between the airlines and GDSs. It’s not fair, but when you're an agent and you're fighting in the middle of two multi-billion companies, you haven’t got a lot of say.
“I've heard agents say: ‘I'm not moving to NDC because some airlines don't do content or price differentiation’. While the airlines will eventually get round to it, there's a lot of strong-arming going on, a lot more stick than carrot, and agents are aggrieved about it.”
A glimmer of hope
Despite the huge challenges, Hedley is still optimistic about the future of NDC, and hopes agents will ultimately embrace the new technology.
“I think people have judged the NDC system on the earlier versions of it, and even the current version, but this isn't the end destination. Of course I’d like to tell agents to be patient, but that's not an easy thing to say to somebody when you can't tell them how long it’ll be until things get better,” says Hedley.
However, he points out that NDC is here to stay and they will need to adopt this new technology to ensure the sustainability of their travel businesses.
“Agents need to be prepared to adapt to some new systems in order to gain their productivity back. I fear that if they don't, they are going to stay in the hellhole of multiple systems,” said Hedley.
Additionally, Hedley explains that indiscriminately remaining loyal to legacy EDIFACT bookings may leave agencies in a vulnerable position.
“If the GDS incentive is such an important part of agents’ revenue and profit line, they are making a mistake,” warns Hedley. “Most EDIFACT GDS contracts are also based on number of segments and tiers, so as numbers move to NDC, the EDIFACT segments remaining also attract a lower incentive which becomes a knock-on effect. So, agents should not be relying on the GDS incentive to make their businesses sustainable.”
“As it stands today lengthening the supply chain now is definitely causing problems in the industry and the NDC systems are not as bombproof as they say,” said Hedley. “But after spending all that money, airlines are too far down the road at this point to turn back.”
