TO NDC OR NOT TO NDC? THAT REALLY IS THE QUESTION

Not since APD has a three letter acronym caused such a stir in the business travel industry. And those three letters? N, D and C, of course.

New Distribution Capability is a new business model proposed by IATA member airlines that – if approved by the US Department of Transport – will allow greater visibility of the airlines’ products at point of sale. Seats will no longer be distinguishable purely by price and carrier alone. Consumers will be able to compare class, seat type, service levels and ancillary costs, as well, in the same way that hotels are sourced and booked.   

The introduction of greater visibility means that airlines will no longer compete on price and brand awareness, but rather on a more accurate like-for-like product basis. The travel industry understands the need for this change and agrees it is a good thing for the airline industry, the manager and the consumer.

However, the NDC proposition is also stirring up a cloud of controversy in the travel industry. Why? For two reasons. Firstly, IATA has excluded travel managers, travel agencies and trade organisations from strategy meetings. And secondly, because the new technology gives airlines the capability to ask buyers to input demographic passenger profiles pre-search.

All airlines already hold extensive amounts of passenger data, which is used in targeted marketing campaigns, competitive intelligence and to establish the viability of new routes, which is essential for opening up emerging markets.

But none asks for that information pre-search. Doing this means the airlines could – note, not would – discriminate based on the pre-search data, raise prices artificially and charge higher prices to those travellers they feel are able to pay more: corporates. And in a time when managing costs is still very high on the travel managers’ agenda, the possibility of paying more – and artificially so – is understandably grating.

By David Chapple

David Chapple is event director of the Business Travel Show, which takes place each February in London. Find out more at www.businesstravelshow.com. Comment on this blog below, or contact David on Twitter @btshowlondon 

THE HEATHROW DEBATE - WHAT'S THE ANSWER?

We posted a news story on our LinkedIn page yesterday about business travellers wanting another runway at Heathrow Airport. Richard Charman, research manager at HRG, posted a reply. See below. Food for thought, isn't it? We'd love to hear what you think - @btshowlondon or Business Travel Show group on LinkedIn. 

If you look at the IoD's own member research - it shows a significant regional split on where expansion should be focused. Having read numerous submissions my gut feeling is that Gatwick may be given an additional runway, Manchester Airport will get an additional runway, Birmingham Airport will have a significantly expanded runway by the end of 2014, Boris Island or similar will be promoted as a long term alternative to Heathrow, by the Government, whilst expansion at a number of other airports will also be permitted. It is already happening at Llydd Airport.  Personally, I would like Heathrow Airport expanded to accommodate two more runways but, I do not see how the Government can get that through Parliament or the courts because of the environmental impact. The promotion of one additional runway might be acceptable - but some argue that is only an interim not, a long-term solution. The likely outcome of the Davis Commission exercise is an attempt to direct development to a number of airports around the country to try and encourage balanced airport expansion because this implies balanced economic development - such simplistic logic ignores failed attempts to get airlines to use Stansted which is currently a white elephant used many by low cost airlines. Such a scenario could do a great deal of harm to UK earnings from aviation and encourage expansion at airports outside the UK. We are already suffering significant political and economic damage as a result of the imposition of Air Passenger Duty which should be abolished or as a minimum reduced significantly.

By Richard Charman