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AFTA Update

                            AFTA CEO Update - Tuesday 16 July

I think it is reasonable to suggest that the New Distribution Capability (NDC) which has been danced around the travel industry both globally and here in Australia for the last 8 years has come to the “stage”, but I’m not sure everyone is singing from the same hymn book.

There have been all kinds of wild and desirable things said about what NDC can, might, can’t, should and would do, but to date as with most things that bring change, the devil is in the detail. It is important to make a few points, which I believe have been made before, but I would like to make them in any event as over the past three months, NDC has by far become the vexed issued of the Australian travel agency community and sadly I am not sure it will be unvexed (if that is actually a thing) anytime soon.

The IATA NDC is a standard that IATA issued for which IATA member and other airlines may choose to use as they develop their distribution strategy which may include travel agents. That’s it. It is not a system, it is not the same for all airlines and it definitely is not something you can touch, feel or use unless an airline invests hundreds of thousands of dollars to bring their strategy to life. Recently, some points were made about what NDC can do or is (Travel Daily 5th July).

It was suggested that the airline and agency community had been driving down a country road for the last 40 years and that now everyone has moved to a multi-lane highway. That is ridiculous to say the least and disrespectful to all involved in the indirect distribution channel – who have not been asleep at the wheel rolling down some old country road. Millions of dollars have been invested in ensuring that travel agents can book airlines quickly and efficiently, so the old country road thing is incoherent at best. To suggest that the agency community has been driving down a country lane is like suggesting that Boeing have been double parked outside a primary school for the past 40 years.

It shows a total lack of understanding of the business model of a modern travel agency and confuses the issue. The simple point is that we can no longer accept a reference to NDC as a generically good thing – for it is not. Each airline will bring to market their distribution strategy which works for them, the way they want to do it in the timeframe they feel is best for them, so generic comments about what an airlines distribution strategy will or will not do could be a misrepresentation of the facts.

While it is never great to let the facts get in the way of a good story, that is to suggest that you need a good story in the first place and unfortunately the inconvenient truth is that the NDC story has not really been a good one at all – demonstrated by the fact that the few airlines that have decided to bring a distribution strategy dressed up as NDC, have not yet demonstrated any real value to travel agents. In our own market NDC has manifested itself in the form of the Qantas Channel and while the devil is in the detail, the fact remains that so far the features that have been indicated are yet to be actually demonstrated.

It may well be that in the end the new channel that the travel agency will use to access Qantas products will be amazing, but so far none of this has been enabled. Time will tell just how good it may be, but in the end the version of NDC that Qantas is bringing to market is not by any stretch an industry standard – it is the Qantas standard and that does not mean it will be the same for other airlines – each may do as they wish. And I suggest they will, my hope is that in the end the relationship between airlines and agents prevail the and multi-lane highway that was suggested does not end up with a 2000 car pile-up covered in snow.

I would strongly recommend the use of seat belts for all NDC conversations going forward.