New York — United Airlines is fully certified and testing “phase one” of its New Distribution Capability program.
At an International Air Transport Association event here this month, United director of distribution Tye Radcliffe said the carrier soon would move on to “robust” servicing. This includes “the types of things TMCs need to do to service their customers with NDC. That is coming this year as well.”
He said United was working with Farelogix to plug in the NDC standard and consistently communicate inventory, fares and ancillaries to distributors. “Once we have people talking to us through that interface, maybe we can get rid of tickets,” Radcliffe added. “Maybe it’s an invoice.” He referenced a hotel folio that details all charges a guest incurred. “That’s not the experience on the airline.”
Radcliffe also shared a vision in which a traveler tells his or her voice-activated assistant about an upcoming trip. The assistant asks if it is leisure or business. If the latter, it would access the traveler’s calendar, apply corporate policies and preferred rates, present that info to the traveler and send it to the expense system. “That’s going happen,” Radcliffe said, “but not until we get these APIs ready to go. That’s really where we are focusing our attention.”
Also speaking at the event, Datalex CEO Aidan Brogan said one challenge to NDC adoption was getting all internal airline groups on the same page. “You can’t target customers in a certain way when you still have an organization that talks about direct sales versus indirect sales, that’s got an e-commerce department, that’s got a director of ancillaries, that’s got a revenue management department, pricing people and sales people who don’t work together,” Brogan said. “It’s not just about technology and sales strategy. It’s also about realigning internal organizations.”
Radcliffe works in revenue management, and said getting revenue accounting onboard “didn’t happen overnight. It took pushing and educating, and meeting with sales folks to explain what it is. It is an ongoing cycle.”
Meanwhile, at least some on Wall Street are paying attention to airline distribution strategies. Here’s Hunter Keay, an analyst at Wolfe Research, also speaking during the IATA event:
The way airlines sell tickets is very outdated. It is very impersonal. There is a perception that airfare is commoditized. It’s the airlines’ own fault. It’s how they sell tickets. They stack them up on Kayak and if you are five cents higher you are on page three. They have to get that content back. NDC, direct connects, these things that AMR tried before. … The best ideas are bad before they are good, it was just too early. Airlines spend billions of dollars paying other companies to sell their tickets and all those other companies do is make them a faceless commodity. That perpetuates the perception that airfares are commodities. Delta investing in biometrics matters less if Kayak is going to aggregate that fare and sell it next to another fare at the same price. I believe passionately that distribution is worth three to one whatever they are going to put into it. I would pour a lot of what I have into being differentiated in distribution so as to not commoditize myself.