Friday, June 24, 2022

There’s light at the end of the distribution tunnel for travel agents

Last month, Emirates severed all ties with Sabre, its GDS partner of many years, as the airline moved to provide rich content directly on its NDC-enabled direct connect platform, Emirates Gateway. 

While the airline had been in talks with Sabre for several weeks prior to the decision, the move came as a sign of things to come. Emirates is now focused on making distribution more cost effective while moving away from a marketplace treating its content like a commodity. Its NDC-backed portal now provides ‘a suite of connectivity options’ for agencies which means access to rich content including exclusive products and offers for travel agents.

But, what does this move mean for travel agents who are heavily invested with the Sabre GDS and now have to step out of their comfort zone? The airline has assured its trade partners that they will continue to work to bring them onboard the Emirates Gateway and help boost ticket sales, so that the end game will be beneficial to all.  

However, agencies not signed up to the Emirates Gateway can continue to access Emirates’ EDIFACT – legacy content through the airline’s GDS partners at a distribution surcharge ranging between $14 and $25 per ticket, depending on sector length.

With its announcement, Emirates joins predecessors like Lufthansa Group, Air France-KLM Group, International Airlines Group, Singapore Airlines, Aegean, and Qantas to introduce surcharges. While the airline may have been a late entrant into unbundling, its new portal will now offer products such as promotional fares, seat upgrades and the ability to pay excess baggage fees, ancillary sales and more, previously available only on its consumer site- Emirates.com, to participating travel agencies and other partners.

New Distribution Capability or NDC is IATA’s new standard that is here to enhance communications between airlines and travel agents. Coming out of a global pandemic, NDC promises to be the means to help speed up recovery in the travel industry because a distribution system that allows one to adapt quickly to what is happening around, is what will allow the industry to stay afloat.

The way today’s global traveler searches, plans and buys air travel, further fueled by a post-pandemic concerns, has changed forever. Digital technology has further altered airline distribution. A travel agent needs to look beyond routes and schedules or the airline’s “Branded Fares” to help travelers find the value they seek. Airlines’ ancillary products give them choice and the growth of the LCC-model will vouch for this. Today more than ever, customers want choice and flexibility and they want it immediately. NDC will bring this transparent and dynamic retailing offering on the table.

Agencies too want better access to airlines’ fare deals and offers and they understand that NDC-enabled processes will help them achieve this.

After all, this is the objective of NDC too – to help travel agencies across all segments – including retail leisure agencies, TMCs, OTAs – become more competitive with airline direct channels.

What challenges them are largely the costs involved to support NDC implementation, employee training and other complexity associated with using these processes as well as product updates and technology support. While much of NDC will operate on the back-end, agencies need the support of the NDC provider community to ensure they are equipped with the tools and training needed to use NDC effectively and wholly.

This has seen agents reach out to certified consolidators or aggregators, who can provide them with this expertise and support, usually on a subscription basis.  These partners will allow agents to use their own NDC airline and GDS online credentials, allowing them to earn their GDS incentives while avoiding the surcharges.

Dubai-based IT provider TPConnects was an early adaptor to the NDC schema and introduced a subscription‐based global marketplace connecting airlines and travel sellers, called the NDCmarketplace.com. The platform allows travel agents a way to search, compare, book airline tickets, ancillaries and related services on NDC‐certified low‐cost and full‐service airlines, from one central location without losing their GDS incentives or incurring GDS surcharges. The marketplace also allows agencies to create sub agents, access staff and create role permissions, and add markups using multiple currencies. Clients can also set credit limits for sub agencies, generate ticketing and transaction reports, issue cancellations and refunds, and select from a broad range of ancillary services.

Participating airlines on the other side can use this space to create and distribute dynamic, tailored offers through travel agents as they receive specific information during shopping time.

The aim of such a marketplace was to overcome the challenges in the slow adoption of NDC faced by agents with the multiple NDC portals rolled out by individual airlines or the APIs with various schemas and versions deployed by NDC certified airlines, in addition to the low‐cost carrier’s already existing store fronts.

According to Rajendran Vellapalath, CEO of TPConnects, the NDCMarketplace.com will be a game changer for the industry, bringing content from both the traditional channel as well as the NDC and LCC channels in to one screen, combined with rich content from Routehappy and enabling the travel agents to leverage all the benefits.

While the lights went out for Sabre and Emirates, Travelport was able to come to a commercial agreement with the airline, allowing subscribers continued access to the airline’s content without incurring any surcharge . Travelport’s partners will automatically be upgraded to a dedicated channel that provides access to the Emirates content.  For an industry that has predominantly seen negligible margins on returns, the dependence on distribution systems that contribute a certain amount of revenue and leave a direct impact on the bottom line, continues to hold value. While the GDS may still be dominating in terms of volume, it is only a matter of time before demand for NDC, GDS and LCC on a single platform, offering the widest range of content to travel agents, take over.

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