It's a fascinating question whether airlines and travel agencies will be able to keep pushing forward on modernizing the sector's tech. But Amadeus aims to press on with its part in the process.
Amadeus believes a new approach to airline distribution will move from an intriguing experiment to an everyday tool for some travel agencies next year.
The travel technology giant aims to widen the industrial adoption of new ways to send data, new workflows for travel agents, and new commercial terms for ticketing. It will test the effort with some agencies in Asia Pacific this year, with a plan to speed up a worldwide rollout in 2021.
Some industry dissenters have said these new distribution approaches haven’t measured up to their promise for agencies yet. Others have suggested that furloughs and revenue cuts due to the pandemic will delay progress.
Airlines have lobbied for years for the creation of the new standards for how industry computers talk to one another, which they have said would enhance airline abilities to sell rich content and ancillaries to agencies and travelers. But finger-pointing over who should pay for the necessary investment and other restraints have hindered progress. Now the pandemic may have tossed the game board up in the air, as airlines and agencies furlough many of the workers needed to make the changes.
Madrid-based Amadeus said Wednesday that it continued to press ahead in adopting the so-called New Distribution Capability (NDC).
“For the rollout at a market level, we will start, in the second half of this year, to make NDC content available in our Selling Platform Connect in selected markets in Asia-Pacific,” said Ludo Verheggen, director of air content acceleration, travel channels.
Amadeus is also about to pilot offering the new content via its Cytric corporate booking tool.
“By the end of the year, we expect we can start making it available to more and more corporations,” Verheggen said. “We may be the only provider that will have end-to-end servicing of a booking [based on the new content].”
Changes for Travel Agencies Coming
At the big-picture level, Amadeus said it has already deployed tools that work for agencies for shopping for new and traditional content in a single workflow. It has been adding tools for basic servicing, in cases where agents need to change tickets. The goal is for thousands of agencies to be able to make bookings routinely and without glitches.
“By next year, we feel we’ll be fully ready to support production at scale,” Verheggen said.
Agencies will want further fixes before they find the systems ready for prime time.
“Our goal is to make sure we can get all of the relevant content to our customers regardless of how it’s booked,” said Nicola Ping, manager, air content and distribution at Flight Centre Travel Group, whose corporate travel business arm FCM Travel Solutions has been working with Amadeus.
Amadeus has been working on a variety of details. It recently added the ability for agencies to markup the cost of the new content they sell. The company also said it is finishing the development of letting agencies handle credit cards and related issuer fees for the new content.
Amadeus recently debuted an interactive seat map in many of its reservation systems. That lets agencies select and pay for a seat rather than leave it to a traveler to have to do that via an airline mobile app. The map also lets agents upsell customers on roomier seats based on the new types of fares.
American Airlines is the first carrier to offer its chargeable seats and ancillaries through this map, with bundled fares of the kind available on American’s site and app “coming soon.”
Agencies will need to take steps of their own. One example on the technical side is that they will need to access Amadeus’s content via its web services and put in place its new data exchange service, called Travel API (short for application programming interface) or else they’ll need to use its cloud-based Selling Platform Connect solution and preferably its new All Fares booking interface.
Some speculate that the pandemic has knee-capped many agencies’ ability to handle tech revamps. But others take a more optimistic view.
“It’s important to highlight that all of our partners have tried ring-fence resources to try not to stop the progress that’s been achieved until now,” said Paul de Villiers, senior vice president, airlines distribution sales, noting that none of the agencies Amadeus has worked with has dropped out.
“Because of the reset effect on total volumes, it’s maybe the right moment to make the jump,” de Villiers said.
Airline Distribution in Flux
In April, the company made Mark Ridley head of airline distribution solutions and its NDC [X] program. Ridley handles defining the company’s distribution strategy and investment plan and following through its execution. Ridley said he’s putting a strong emphasis on leading the Amadeus NDC [X] Program. Amadeus created the program in 2018 to bring together experts from across its units in a coordinated approach.
Ridley noted that airlines also need to do work on their end to keep progress moving, which the pandemic has slowed.
“Some of our airline staff are on furlough and only working one or two days a week,” Ridley said. “Even though they may not be as responsive to our questions or testing deadlines than they were previously, we’re all moving in the same direction, with everyone seeing this as a great long-term strategy and solution for the industry.”
As Skift noted in October, many industry experts had worried the effort was stalling. About 20 airlines pledged to transmit about a fifth of their sales via the new data standards by the end of this year. But the International Air Transportation Association (IATA) has
since removed that pledge from its website.
Correction: IATA moved the NDC leaderboard page to here.
In April, the airline lobby IATA told Skift its short-term focus was helping carriers with market restoration and stimulation but that it expected the new world of retailing would be an integral part of many airlines’ commercial strategies.
Earlier this month, Singapore Airlines became the latest carrier to add fees for bookings made via processes that don’t use NDC. Lufthansa Group pioneered the charges in 2017, and other airlines, such as Qantas, Air France/KLM, and International Airlines Group, have since added surcharges.
The fees penalize bookings made via older processes used by Amadeus and its peer companies Sabre and Travelport.
American Airlines, Finnair, Qantas, Singapore Airlines, Air Canada, Japan Airlines, and United Airlines are among the airlines working with Amadeus on the modernized distribution effort.
“We need to drive content via NDC that is unique, that gives customers a reason to want to hook in, whether that’s a bundle or continuous pricing or whatever may come next,” said Neil Geurin, director of sales and distribution strategy at American Airlines. “The more we can do to help our customers have the same experience when they come directly to us or come to one of our agency partners, the better we will all be in the long run.”
But airlines need to do work to support such efforts.
“If we look at the challenges we face, probably the biggest one has been around standardization,” Ridley said. “Some of today’s standards are somewhat open to interpretation, and what we see is some airlines interpret them slightly differently.”
“It could be different types of data in a message or different flows of things for exchanges,” Ridley said. “What we’re trying to do at Amadeus is to normalize that data as much as possible so that our travel agency customers see just one flow.”
Airlines need to make investments and coordinate on details to ensures a successful effort, Amadeus’s executives said. Some airlines have adopted different versions of industry standards.
“There are six different NDC versions used by airlines,” Verheggen said.
That can cause problems for agencies.
“The Flight Centre strategy is to be able to get all of the content our customers need to them but to ensure it works end-to-end so that things our customers need like servicing and reporting aren’t impacted just because the content is coming a different way,” Ping said. “The key challenge is that we see different capabilities being built in different ways by different airlines, and if we’re truly aiming to scale this up, standardization has to come.”
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Tags: airline retail, airlines, amadeus, iata, new distribution capability, travel agents
Photo credit: Young Asian traveler with mask socially distancing at an airport. Adobe