It’s no secret that for many airlines’ profits come from their ancillary product sales.
According to the research paper conducted by IATA and WTAAA, NDC: Travel Agencies’ Enabler to Success, on average 76% of travel agencies book airline ancillary products.
TMCs are the most likely to book airline ancillaries for their travellers, with nearly nine in 10 doing so. TMCs’ primary audience, corporate travellers, may have travel policies that allow them to buy these products.
Airlines’ websites offer the most complete selection of ancillary products – no doubt the reason why agencies use them most to book ancillaries.
To do this, though, may require an agent to toggle between a GDS, where the agent books the flight, and an airline website, to book the ancillaries. The process is inefficient, reducing agent productivity, driving up agency costs, and frustrating travel agency executives – and, by extension, the travellers the agency serves.
Agency executives don’t like this fragmentation. Agencies view having to use multiple channels to book air and ancillary products as counterproductive, and aren’t pleased with the additional effort required to integrate non-GDS transactions into their mid- and back-office systems.
This is why the researchers believe in the critical nature of NDC to the global airline industry. With NDC, airlines can, at last, help evolve the traveller’s purchase decision in indirect channels from being based strictly on price, rendering airlines as substitutable commodities, to overall value based on factors such as airports, schedule, amenities, journey cost – not to mention the value of the brand. Price will always be a decision-making criteria, but it need no longer be the lead or sole criteria.
What to learn more about NDC? Visit IATA’s NDC page for details.