TBD

Well ... maybe. There are also plenty of examples of airlines trying to rock the industry only to reverse course.
These are both good examples for the US airline industry, though. AA has never been much of an industry leader. Delta is (was?).

I think the rest of your post is oversimplified, but I'll just add that Concur doesn't issue tickets. Online bookings go to the agency to complete.

seawolf

Agree Concur does not issue tickets. It's T&E software that some travels agents use as UI to enforce travel policy (among other things), reporting etc. However there is the potential for Concur to replace some of the corporate travel agency functionality without the travel agent in the picture. Architecturally Concur sits between user and legacy GDS (which issues the ticket). Overall architecture is User->Concur->GDS->airline systems.

What that also means architecturally is Concur can also be used to interface directly between user and airline system (and cutting out the GDS as airline will issue the ticket instead) resulting in User->Concur->airline systems. In theory NDC can allow for this since it is API based.

It would be interesting to hear why GDS/agencies have not adopt to NDC. Is it because they weren't given enough time? Or they are not really enthusiastic about it?

bocastephen

It's double the work - we need to create a reservation in the GDS graphic interface that many of us don't use, then queue it to AA to issue the ticket, then retrieve the ticketed booking from the GDS to send to the client. Any change needs to go back to AA.

The path of the least resistance is to just issue on the AA website and be done with it - AA cut almost all domestic commissions to zero, so it's not like we earn anything either way.

NYC Flyer

AA is trying to reduce its GDS distribution costs. I don't know if or how much AA will pay Sabre and other GDSs for displaying NDC content, but the goal is to shift as much of the costs away from the carrier as possible. GDS margins will suffer unless they cannot raise subscription/user fees.

Travel agents were pretty much cut out of domestic air commissions decades ago. Corporate agencies typically charge their clients transaction fees for the service provided (corporate contracted air and hotels are typically not commissionable). So travel agency service fee margins will suffer to the extent they cannot pass through the costs to clients, whether due to increased GDS/technology expense/investment or reduced productivity associated with booking and servicing NDC content vs existing infrastructure.

bocastephen

This is incorrect - we still earn commissions which can vary depending on fare class and route, and can be anywhere from 5% to 30%. AS, DL, HA and UA still pay commissions.

Only AA has cut off virtually all agencies from domestic non premium transcon commissions.

Dave Noble

If AA's terms / effort are too high, then don't book AA tickets - stick to ones that better serve you. If the agency customers are not bothered, then why worry? if the agency customers want to have AA as a choice then the agency may have to adjust

Agencies are not forced into selling AA tickets

NYC Flyer

I should have noted there are some exceptions. The routes and fares these contracts apply to are not exactly growing. There is a reason agencies charge generally service fees, while 20 years ago they did not.

.

Ultimately, everyone will adjust to serve their customers' needs. We are just in transition (and I say this with the current inability to put clients in the lowest 4-5 inventory buickets on AA).

seawolf

That’s my general understanding that the enthusiasm to adopt is not there. There is no carrot for the agency.

GDS has to make investments which I’m guessing would pass these cost to travel agencies. Increase cost and change in process in getting things done with NDC.

Airline not really offering agencies incentives (eg higher commissions) to adopt to as the primary driver is to lower distributions cost for airline not pay more.

Seems to me even if AA pushed the cutoff by a year we’ll still be in the very same situation as we are today a year from now.

NYC Flyer

To a large extent, yes, although if AA invested in its online platform to enable agencies to immediately service NDC tickets, educated the industry about its utility, and retained sufficient support staff to help in the transition, there might have been more enthusiasm.

TBD

That might work on personal travel, but doesn't seem practical for business.
The TMC should be working for their corporate client and not the airline (so commissions shouldn't be relevant ...but yea, I know they are).
Business travelers also know that AA flies from A to B at $x. If they can't book online** or see significant price differences, they'll get angry. The justification - everything we're talking about now - doesn't matter to them.

**via corporate booking tools

SNA_Flyer

I think you are both giving AA too much credit here. This is not a well run business, and that is reflected in their market capitalization. You don't just alienate a fairly large percentage of your customer base overnight and not end up with repercussions.

seawolf

Or it could what is driving them to take this position to lower distribution cost and they are basing their decision on their data. They are betting they will come out of the short-term hit with better long term cost structure.

There's simply no public available data to conclude whether this is a good bet or not. It could be that their largest contracts have moved to the "book corporate fares directly on aa.com" model and AA is only jeopardizing a small % of contracts. We simply don't know enough.

Only time will tell.

bocastephen

I'm not giving AA any credit - our internal organization communication (and very large TA and TMC) is pretty clear that AA continues to run into financial issues, and leadership is in disarray, grasping randomly at various straws to cut costs.

GDS or not, AA won't pay me anymore regardless, so this new change really doesn't matter as I can just do a web booking much faster and easier, and it's easier to make changes if needed and avoid the hold times for an AA agent. I'm not going to send my client's employees on an all day multi-connection hop on DL or UA just to avoid AA, but where I see an AA flight with an equivalent option for price and schedule on DL (which they prefer anyway) or UA, the ticket will not be going to AA since it becomes harder for me to manage more complex issues and I don't really have any agency priority handling with these tickets since we didn't issue them.

1kprem

I would be curious to see what the NDC AA API screen looks like to see if it is better than aa.com's. I mean, NDC was meant to assist agency's with selling airline ancillaries. I am not a fan of aa.com but it would be curious to see if the agent display provided by the airlines API is any different. For example, I see better results pricing on Expedia for AA bookings, than I get from aa.com.

Also, I assume the NDC process is still producing a PNR locator which, at the end of the day, is still ultimately housed in the old eidifact form in SABRE (if I am not mistaken).

Now, I know this last piece is going off topic, but one last curious thing on my mind is if airlines are still publishing "branded" fares or fare families through ATPCO. The TMC we used was trained on how to employ those fares in native SABRE pricing as they, essentially, were part of the airline's bundled fare program.

bocastephen

It will look the same as the GDS GUI interface depending on the GDS - there may be some auto scripting involved, but the interface will be whatever the GDS offers