Agents fear poaching of their customers

Agents are fearful that a new industry standard for selling flights via global distribution systems will enable others to poach their customers.

Speaking at the Advantage conference, IATA manager of New Distribution Capability Standards Andrei Grintchenko told agents that at least one pilot scheme for the NDC would be up and running later this year, and it will be looking for "mass adoption" of NDC from 2015-2016.

NDC is a common standard to enable airlines to provide more detailed information about their flights and ancillary products on global distributions systems, and to allow customers to search for flights using a range of criteria, not just price.

IATA, which is developing NDC with four airlines, said it would enable third parties to compare fares from all carriers, not just those signed up to GDSs, and it would enable the airlines to sell all their ancillary products in one place.

"We are trying to modernize a system which is 40 years old," said IATA’s head of business development Yanik Hoyles, who joined Grintchenko to speak at a session called NDC – Understanding the Distribution Model of the Future.

NDC is not a system but a standard that will allow airlines to sell via GDS in the same way that they sell on their websites.

Hoyles said it would be "pro-competition and pro-consumer," as customers would have more choice, which would lead to lower fares.

Controversially, it will also allow airlines to tailor offers to passengers. But agents are concerned this will mean they have to provide more information about their customers than they do at the moment.

Advantage vice-chairman Ken McNab told IATA: "We have worked hard to accumulate data and to protect our customers and you are opening up the door to doing God knows what with that data."

McNab told TravelMole he was uncomfortable with the idea of a centrally controlled system with information available to all users.

"How do we know that rival agents won’t be able to see the information we put in and they could use that information to compete for our businesses?" he said, adding that IATA and the airlines had kept NDC shrouded in a cloak of mystery.

"We need them to say "here is the Bible for this process". At the moment we don’t know what this system is, they have told us nothing for two years and suddenly they want to rush it out by 2015. We need to proceed cautiously."

U.S travel agent Peter Vlitas, of Pro-Travel in New York, said the American Society of Travel Agents was opposed to NDC due to a lack of information about the proposals, as well as privacy concerns.

"This will change the livelihood of the industry worldwide," he said, while also asking Advantage corporate director Ken McLeod why ASTA had not been invited to speak at the conference to provide a counter-view to IATA.

McLeod said Advantage could "make their own minds up", adding later that the US market, which is largely domestic flights, was very different to the UK.

Susan Hopley of The Data Exchange, who also spoke at the conference, emphasised to agents the hidden value of data. "Data is the new oil." she said. "You are rich with the data you have.

"Agents should not give data away for nothing."

She suggested that the vast amount of data Advantage members hold collectively was a commodity in itself, which could be sold to businesses, such as those looking for investment opportunities.

"You know where people are travelling, which companies are doing better than their competitors, this information is valuable to others," she said.

While the value of transactions is going down, Hopley said the value of the information provided during the transaction was going up. She said it could provide revenue "unimagined in the early days".

"We should understand the value of the data, how it should be controlled, how it should be protected," she said.

Hoyles said NDC would only work if it had the support of agents as well as the GDSs, but representatives from Sabre, Travelport and Amadeus who attended the conference all said they had reservations about NDC and none of them believed it was necessary to develop a common standard.

At the end of the session, business travel agent Alasdair Chalmers, MD of Dundee-based DP&L Travel said that far from "understanding the distribution model of the future," it had left him confused.

"I’ve got more questions than answers," he said.

By Linsey McNeil, TravelMole UK