ARC Chief: Some NDC Backers Don’t Understand Agency Business
by Michele McDonald /While IATA chief Tony Tyler is understandably enthusiastic about the New Distribution Capability, Mike Premo, president of the Airlines Reporting Corp., takes a more measured view of its future.
“The implementation of a standard is the tip of the iceberg,” he said.
“There are tons of business processes that have to be considered when products are sold, settled, accounted for, delivered,” not to mention irregular operations, he said.
Among some NDC backers, “there is a lack of knowledge of what agencies require to run their businesses. There’s lots of confusion,” Premo said.
ARC’s point of view
In a recent interview with Travel Market Report at ARC’s headquarters, Premo said ARC is uniquely positioned to see how things work.
“We are mega industry geeks here,” he said. “We are downstream from the sexy point-of-sale stuff, and it all hits us.”
Even if someone – an airline, a GDS company or another third party – builds a system to NDC standards, there is no guarantee that it will achieve widespread adoption, he suggested.
The EMD saga
Premo noted that the Electronic Miscellaneous Document, designed to facilitate the sale and fulfillment of ancillary products, still sees just “a trickle of activity,” even though it’s been several years since it was introduced in the U.S.
Adoption of EMDs has been more widespread in Europe. Premo believes that is because Amadeus, a dominant force in Europe, has led the charge.
But in the U.S., it’s not clear how far the GDSs have gotten with EMD, he said. “Are the back offices ready for them?”
NDC will take time
As for NDC, Premo said that, although it will take time, in the end “the industry will coalesce around the standards.”
“Carriers need to work together,” Premo said. Those that already do – interline partners, joint ventures and alliances – will drive development and adoption.
While the initial opponents of NDC – including the GDS companies and entities that claim to represent the business travel community and consumer travelers – have dropped their pitched battle, many travel agents still seem to view NDC with trepidation.
Agents “are looking for the least disruptive way” to sell ancillary products, Premo said.
Sees both sides
On the one hand, he said, they make a legitimate point: If a large percentage of customers are self-booking, anything that disrupts that is going to break the system.
But on the other hand, airlines are hell-bent on selling and merchandising new products and services, and it would not be good for agents if the only way a customer can get that experience is on airline.com.
“I don’t think sending customers to supplier sites is good business,” Premo said.
The good news is that if and when NDC takes hold, there will be standards, he said. “It won’t be hitting the industry completely unprepared.”