27 Apr 2017

Is NDC bringing some order as Lufthansa connects travel management firms?

Airlines that are implementing flavours of the IATA New Distribution Capability standard are, ironically, adding complexity to air distribution.

And, so far, this goes against initial claims that NDC would simplify distribution.

Bosses from large travel management firms would like to be able to easily add more airlines but the carriers have been developing NDC-capable or compatible solutions as opposed to a wholesale adoption of the standard.

Lufthansa Group this week unveiled its first NDC-enabled direct-connect solutions with travel management companies Click Travel and Portman Clarity.

During a UK distribution update from Lufthansa, Click Travel chairman Simon McLean acknowledged that there is more complexity but says IATA is “encouraging airlines to adopt the standard by the book”.

So far, an NDC-compatible solution has been announced by Emirates while British Airways describes its own initiative as the “British Airways NDC”.

McLean says the TMC would love to be able to use the same technology for different airlines but it’s not that simple and adds:

“NDC is very early days. It has been around for a long time but implementations haven’t been. Everyone will pull towards a common standard some time in the future.”

Although McLean sees direct connects as the future and Click Travel has another airline lined up to follow Lufthansa with NDC connection, he describes it as “positive progress, but disappointingly slow”.

Portman Clarity boss Pat McDonogh adds that “there is a danger of more complexity” but that it’s up to TMCs to manage it. He says:

“Ultimately it will shake out and we’ll find efficient ways of doing things.”

McDonogh also believes there will be different challenges as more airlines come in.

However, both TMC bosses believe revenue streams are going to change in the industry and that TMCs need to be more efficient.

Andreas Koester, Lufthansa Group senior director of sales for the UK, Ireland and Iceland, also acknowledges the complexity saying:

“None of us deny that it is getting more complex but the customer wants choice and individual answers and the task it how we manage it.”

Lufthansa Group‘s direct connect solutions with the UK TMCs mean business travellers will get access to “exclusive” content from the Group’s airlines including Swiss, Brussels and Austrian Airlines, which would otherwise only be available via its direct channels.

Koester describes the move as “catching up with the significant development in our home market”.

He adds that partners who have implemented a direct connect solution will have access to “differentiated offers” and avoid the €16 surcharge Lufthansa introduced in September 2015 for GDS bookings.

Koester also says “corporate bundles” with fast-track security and wifi are coming soon as well as similar packages for leisure and that eventually the group wants to deliver real-time offers.

It’s an interesting move in the UK following Lufthansa’s direct connect initiatives with Siemens, Volkswagen and TUI in its home market.

Koester says Lufthansa Group attracted the big corporates because of the high-volume of business it does with them while in the UK it was not such a big airline and it could not implement the same solutions because of a “complex IT infrastructure”.

McLean says “access to content as well as product and price parity” were a critical element for his company pursuing the direct connect partnership. He claims the GDS only show three options for the London to Munich route while the direct connect presents eight.

Testing with the TMCs was carried over March and April with the deal being implemented on May 1.

Koester says the group is talking to more TMCs including HRG, which it announced it was working with about a year ago.

NB: Lufthansa pic via Pixabay.

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