As traveler needs are shifting, airlines are being forced to take stock of the current distribution landscape.
Technology solutions - particularly IATA’s New Distribution Capability - are leading the charge toward a standardized future, but how ready are airlines to adopt new processes?
At the Voyager HQ Travel Disruption Summit last week, a panel of airline distribution experts agree the industry has come around to the benefits of NDC, but implementing them has its own set of challenges.
Customization is key
“The ability for us to customize, personalize and make relevant offers to our customers is severely limited by the current messaging standards that exist,” says Tye Radcliffe, director of distribution for United Airlines.
He says it’s difficult for airlines to match the experience offered by the likes of Uber and Amazon to consumers, and new messaging standards are needed in order to reach them in every channel where they can buy products and services.
One example of how United is standardizing its inventory is through the airline’s Economy Plus seats. Launched in partnership with Amadeus, the seats are priced dynamically and are what Radcliffe calls “the first full-scale NDC implementation.”
Subscribe to our newsletter below
Neil Geurin, director of distribution strategy at American Airlines, says American’s early NDC tests have been around seating as well, though the airline is putting in work around the bundling of different ancillaries such as Wi-Fi and baggage, “anything that might actually matter to travelers,” he says.
Geurin says it’s still early days, but the goal at American for NDC is to make all its products and services available wherever the customer is. “We don’t see why a bunch of products and services are only available at AA.com or at the airport; that doesn’t make sense to us,” he says.
“We’d like to make all those products and services available wherever someone wants to shop. Our customers are interacting with millions of businesses that actually do that today. Airlines are kind of alone where we break it out into all these pieces.”
Smart investment
The industry has been slow to adopt NDC in part because “every company that’s a player in the space has to prioritize and invest” in the standardization, Radcliffe says.
“There’s also a chicken and egg thing that’s still going on,” he continues, with the product side concerned about distribution channels and the distributor side concerned about product offerings.
If you’re going to invest in something, it better translate across a lot of the ways we work with customers.
Tye Radcliffe - United Airlines
Geurin also points to challenges around airline mergers and combining old and new technology systems. “What we found [in American's experience] is plugging all these things into each other is a real effort,” he says.
“If you’re going to invest in something, it better translate across a lot of the ways we work with customers. If it doesn’t, you’re getting this Frankenstein of all kinds of different things plugged into each other that don’t interact that well.”
Geurin says airlines including American and United as well as Lufthansa and WestJet have been pushing NDC forward, but most haven’t moved down that path yet. “All of them are watching, waiting, learning.”
He says over the next year or so, American's NDC adoption will put the airline in a position to truly evaluate what customers want to see flow through the NDC pipeline and invest accordingly.
“We have our legs under us at this point. The next step is to develop further.”