Industry hits out against IATA’s new distribution standards

The travel industry has hit out at IATA in the wake of its New Distribution Capability (NDC) standards, with one operator calling them the “biggest threat to travel agents since commission cuts”.

Travel agencies and associations have come out in fierce opposition to the NDC, which on the surface seek to provide airlines with greater opportunities and transparency for selling their products via global distribution systems (GDS), but which agents fear will further undermine their position as third parties in the travel booking process.

One of the biggest objections to the IATA announcement was that the NDC has been developed following “intense coordination… with participation from airlines, global distribution systems [and] the travel agency community”.

But in a strongly-worded statement, the American Society of Travel Agents (ASTA) and Business Travel Coalition (BTC) rejected that assertion.

“The claim of participation by ‘the travel agency community’ and its ‘trade organisations’ is an illusion, plain and simple,” said Nina Meyer, President & CEO of ASTA. “We and fellow travel agency organisations around the world have been denied transparent participation in the development process.”

BTC Chairman Kevin Mitchell added; “The likely reason organisations representing travel agencies and corporate travel departments were excluded from the process… is because decisions about direction and business models have already been taken.”

Meanwhile, Australia-based Mobile Travel Agents’ (MTA) Managing Director, Roy Merricks, called on travel agents and associations to band together “before it is too late”.

“The concern is that IATA is developing the NDC… with the airlines before releasing the details. No doubt the devil will be in the detail,” Merricks said.

“Currently as agents, we build travel proposals in the best interests of our clients who are effectively unknown to individual carriers until the transaction is completed. It is the ability to work closely with clients regarding their plans, along with our experience, destination knowledge, connections on the ground and a highly developed client relationship that sets us apart as travel agents. This also enables us to add further value to the client experience and keep them coming back to us.

“If the airlines succeed with the NDC in its current form, that position may very well be compromised,” he added.

On the technology side, Travelport it welcomed “open engagement” with IATA on the NDC, but that the new standards “need to fairly and equally represent the needs of all participants in the end-to-end travel supply chain”. 

“For these standards to be effective, more work needs to be done and open dialogue will be paramount to its success,” the GDS company said in a statement. “We call on IATA to address the concerns raised by trade bodies” in light of NDC’s apparent preclusion of full price transparency and comparison.”

“We are all aware that on occasion airline websites undercut fares offered to agents through the GDS – we also know that the airlines’ goal of airlines is to reduce or eliminate segment costs they currently pay to the GDS,” MTA’s Merrick said. “If the NDC succeeds along those lines, it is clear where the cost burden will move.”

An estimated 60% of all airline tickets are currently being sold by travel agents using the GDS. The NDC is expected to be rolled out in 2013.