Ever since American backed off its draconian implementation of New Distribution Capability (NDC) for travel agents, there’s been a whole lot less to write about. But I talked to Mark Nasr, Air Canada’s EVP of Marketing and Digital, back in April 2023 about the airline’s kinder/gentler move into the space.
Much has changed in the last year and a half, so we decided to have a catch-up call. And this time, instead of an audio interview, I decided to go old school and do a traditional Across the Aisle interview, edited for length and clarity for your reading pleasure….
Brett Snyder, Cranky Flier: It’s been a year and a half since we last talked. You were beginning the public side of the NDC journey and talked about how it was really about change management. So I’d be curious to hear how you think it’s been going for the last year and a half as you’ve been working through this.
Mark Nasr, Air Canada EVP Marketing and Digital: For sure. So what’s going great, what’s going okay, and what’s going poorly…
What’s going great? The reaction from the agency community has been supportive. Obviously, some agents are happier than others, but we haven’t had relationship issues. Everything’s been managed in such a way that they understand that we’re not trying to disintermediate. We’re trying to shift the technology paradigm and with that, we can start to change our product offering. We actually just launched continuous pricing, there’s a whole bunch of stuff coming with ancillaries next year that we couldn’t do.
I’d say the second thing that’s been going great is our tech platform itself. We’ve never been a technology provider to technology providers. And if you think about, for example, our relationship with Expedia… we are now a SaaS [Software as a Service] provider to a tech company and you know, airlines aren’t necessarily famous for being great technology shops. But the system’s been just as stable as our GDS [Global Distribution System] connections usually are, similar amount of downtime. So we’ve been happy with that.
What’s been going ok? Take up. We’re just over 20 percent now.
Cranky: Twenty percent of agency bookings?
Mark: Yeah, 20 percent of agency bookings are NDC. It could be stronger, but that’s aligned with where we thought we would be. Actually, candidly, just about a point and a half shy.
I’d say communications with corporates has been going okay. There hasn’t been a bad reaction because, again, we didn’t remove content. We didn’t hold a gun to anyone’s head. It was really focused on, “Here’s what we’re trying to do, and why.” But where corporates have really challenged us is to say, “Okay great. Our relationship is good, you’re not hurting us, but what are you doing for us? Why am I interested in this? Why do I want to have a change?”
And that pressure has really caused us to think about creating a corporate dedicated value proposition, so we’ve started to do it now. We have a set of content that’s available on NDC for corporates that addresses some of the key things they like. You know, we still have change fees in the rest of the world unlike domestic US, so we’re doing things like waiving change fees for bookings under corporate contracted revenue under NDC. And there are other features and benefits that we’re looking at from a content and from a tech capability perspective.
What hasn’t gone as well, what’s not going well? The GDS integrations have taken longer than we wanted them to take. Now, there’s a good and a bad story here, because they’re not taking longer just because they’re slower. They’re taking longer because scope is changing as we’re going through the limitations. And the reason why scope is changing is we want to make sure that if you’re in a GDS and you’re booking in NDC, the experience is just as capable and as efficient for the agency, efficient for the agent, as it is if you are booking on EDIFACT.
Cranky: I was just thinking about that because we, on the Cranky Concierge side of the business here, we use Sabre. We actually have liked some of the increasing functionality they’ve added, but what we have run into is such a wide variety of “ability to function” depending on the airline. And so I’m curious if you’re seeing there’s sort of a minimum threshold of where you need to be. And is that why the GDS integration was delayed? It just wasn’t good enough?
Mark: Exactly. Yeah. Look, we started out and these GDS negotiations, particularly with Sabre, were cooperative and they were future-oriented. They’re going to have to integrate NDC, but when we kicked off the program, we brought our product people on both sides of the table and we said, “okay, what makes for a great experience that we can be proud of that’s as good as what you’re offering today?”
Gaps were identified. There were, for example, gaps in how seats function. There were gaps in how ticket extras work. There was one particular gap I remember where if there’s a schedule change, the ability for the agent in their desktop to get a notification proactively on a push basis instead of needing to go and examine PNRs. That might sound obvious but as an airline, we had built a whole set of orchestration and messaging around that stuff that wasn’t native to the booking. So we had to build something called “order change notification.”
Cranky: What were some of the other pain points you discovered when you’re talking to your product team? I mean, I think about from my perspective, it’s schedule change/irregular operations (IROPS), and it’s just general availability of the options. Those are probably the first two things that come to mind, but I’m curious what stands out to you.
Mark: God, this is gonna sound so trite but I can’t emphasize how much I mean it. The biggest shock to the system has been we need to think like the travel agent. Let me give you a profoundly simple example. Today, the travel agent is sitting in front of a GDS with 300 airlines, and if they want to do Air Canada on the way out and Delta on the way back, they can do it. And whatever they need to do it in separate tickets or not because of some tariff rule, or whatever they can fundamentally do it, right?
But our website, for example, doesn’t offer Delta on the way back and the content that we were providing in NDC after we first launched was precisely what shows up on our website, nothing more, nothing less. Agencies are smart and they have other ways of getting at the information and unless we’re willing to give agencies what they could otherwise get, and it’s yes it’s a little uncomfortable for some [at Air Canada] that say “we gotta sell our own product” or “we gotta sell our own [joint ventures].” So that’s been the biggest mindset change.
Brett: I’m sure things have changed from when you first implemented. The one thing I know for sure is how you’ve implemented the distribution cost recovery fee [for bookings made via EDIFACT]. Can you talk about why you made that change? Because if I’m remembering this right, you changed it so that it now only applies on the lowest fares, not the full suite of fares.
Mark: Yeah, we’ve done a few changes over time. We’ve looked at types of traffic, you know, consolidators, group traffic, corporate negotiated traffic. We’ve looked at different points of sale and different tactics. We’ve looked at different RBDs or fare levels, cabins, etc. And we’ve changed. I’d say we’re probably now in our third or fourth iteration, depending on how you measure that program, and it will change again.
Cranky: What was the rationale for getting rid of the the fee on the higher fares? What did you see that was happening that made you make the change?
Mark: Being responsive to the agency community. We were delayed on the GDS implementations. We had promised a certain timeline and those were delayed, and there were several agencies that said, “look, it just doesn’t make sense for me to integrate with you directly, because we don’t do enough business with you or we have to do all these other airlines even though we might be a very big partner of yours.”
Brett: Around schedule change and IROPS, how are you approaching that? Because that’s always one of the things that with EDIFACT is so great, you can just sell something in and you can reissue the ticket and you’re done. And what I’ve seen is just an inability to find exactly what you need in NDC where you can’t request a change or it doesn’t come back with what you need. And then some airlines don’t have the waivers implemented, so you still can’t even do the work there and you need to contact someone. So, where are you guys on that path? And where do you want to be with it?
Mark: I particularly love that question. So, three independent things have come together to put us in a strong position on this front. First, our NDC roadmap, and this is obviously a functionality that’s important. We had all sorts of things related to IROPS and rebooking and also processing refunds where there are waivers applicable, issuing credit, that whole ecosystem.
Number two is the main focus of investment from a customer self-service perspective right now. There’s a set of tools and capabilities existing and coming online because of that.
But number three, very interestingly, we came very close to having a strike with our pilots in October. Luckily we reached a deal and avoided disruption. But in the run-up to that, because of how impactful a strike would have been, we re-looked at all of our policies and procedures as it related to rebooking. And we actually automated every one of our [other airline] reprotection agreements other than one carrier which just simply doesn’t distribute its availability in Amadeus. And as a result of looking at those procedures, we cleaned up a lot of things, we optimized, and we now have the ability to offer any of those OALs, competitor and partner alike, fully automated, via our rebooking systems and via the self-service tools which is the same content that leads into the NDC-rebooking capabilities. Those three things have combined to give us a step change of capability in that regard.
Air Canada’s approach to NDC adoption has been markedly different from American’s. That’s a good thing. Eventually, this is what agencies will use for nearly everything, but it is very much a work in progress.
