ARC Backs IATA’s Distribution Plan, Citing Benefits to Agents

by Michèle McDonald
ARC Backs IATA’s Distribution Plan, Citing Benefits to Agents

The Airlines Reporting Corp. has lent its support to IATA’s New Distribution Capability, saying that NDC will benefit both travel agents and their customers.

ARC made its comments in a response to IATA’s request for Transportation Department approval of Resolution 787, which lays out the framework for NDC.

“Based on our business experience, ARC confirms IATA’s position that Resolution 787 will provide air carriers with the technical ability to present their sales offerings — and they will include offerings that are more uniquely suited to the end user –– to travel agents who, in turn, will present them to their customers,” ARC said in a response signed by president Mike Premo.

“As these offerings, e.g., onboard Wi-Fi, are not conveniently available through this sales channel today, adoption of the new XML standard will provide the foundation for such offerings. This will improve the competitive nature of this sales channel and will be of obvious benefit to both travel agents and their customers.”

ARC: Flexibility is key
Premo also addressed some of the objections that opponents to NDC have raised. “The flexibility contained in the Resolution is important,” he said. “XML messaging is not proposed to replace Edifact messaging, but to supplement and improve upon it.”

In addition, he said, “ARC also notes that the Resolution addresses the importance of protecting individual privacy, and, given ARC’s work in the data area, we strongly support the recognition of privacy concerns in any standards. This is an important feature of the Resolution.”

Premo also said ARC would advocate for the development of systems that use the NDC standard to accommodate continued financial settlement by ARC on neutral electronic forms.

Open Allies takes contrary view
The Open Allies for Airfare Transparency, a group initially formed in 2011 to combat airlines’ direct-connect strategies, also commented on IATA’s request for approval.

The group, consisting of distributors and sellers of air travel, corporate travel departments and travel trade and consumer associations, the three GDS companies, ASTA and the Business Travel Coalition, continues to insist that Resolution 787 is binding. IATA says the technical standard is binding only if an individual airline chooses to adopt XML as its means of connecting with distributors.

In its response, Open Allies said it is “the first time that airlines have acted as a group through IATA to distribute fares pursuant to an agreed system.”

“There is ample reason to believe that the purpose of Resolution 787 is (and the effect would be) to terminate the current system of publicly posted prices that any consumer can comparison shop anonymously and efficiently,” it said.

Open Allies called for IATA to submit all documents related to NDC, including notes and minutes taken at all meetings. It also asked that the comment period be extended from 21 to 45 days. IATA said it would not oppose such an extension, given the “apparent misunderstanding” that the resolution has generated.

Delta dumps on GDSs
Delta Air Lines’ also commented, delivering a scathing assessment of GDS systems. Delta said that although GDSs served their role well in previous decades, the model “reinforced a commodity-based sales model by differentiating carriers only by their two-letter airline code and price.”

“The GDS technology distributing content to travel agencies did not evolve at the same pace” as sales innovations on airline websites,” Delta said.

“Airline products and services continue to be sold in the same commoditized manner through most of the traditional GDS/travel agent distribution network. In other words, a seat is just a seat.

“A customer shopping for a first class ticket from JFK to LAX using outdated GDS technology would have no way of knowing that the Delta flight has lie-flat seats, in-seat video and Wi-Fi.” The agent would not know that a competing flight a has inferior upright seats and no amenities, it said.

‘Enhanced shopping environment’
Delta said the IATA Resolution will provide multiple benefits to the industry and to customers who purchase tickets through travel agencies. “The functionality enabled by Resolution 787 will provide travel agent outlets the ability to offer the type of enhanced shopping environment currently available only on airline direct websites,” it said.

The carrier also stressed that the resolution does not mean the end of anonymous shopping. “Rather it provides a path forward to develop new alternatives,” Delta said.

“GDS and travel agencies may determine that the current model works for their business needs and will continue to exist in that environment. Others will migrate to this new platform to provide the increased level of more personalized service for those customers who demand it.”

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