2023-04-21 14:57:30
- Avavit highlighted that the implementation of this program reduces the independent distribution chain, since it limits access to the reservation systems used by travel agencies.
The Venezuelan Association of Travel and Tourism Agencies (Avavit) rejected the implementation of the New Distribution Capability (NDC) system that the International Air Transport Association (IATA) wants to assign in the market for the purchase of tickets.
In a statement, Avavit reported that, as a member of the Latin American Tourism Forum (Folatur) and the Confederation of Latin American Tourism Organizations (Cotal), it adheres to the official pronouncement of these organizations.
“The Latin American Tourism Forum, which brings together the main chambers of travel and tourism agencies, (…) condemned the new measure imposed by IATA that would profoundly affect the important role of travel and tourism agencies with the implementation of the reserves”, reads the Avavit statement.
The association pointed out that with the implementation of the NDC the independent distribution chain is reduced, by limiting the access of the ticket reservation systems used by travel and tourism agencies to the content of the airlines and charging extra for the alternative use of Global Distribution Systems (GDS).
In his opinion, this fact fosters artificial ways to generate a cost differential that will end up destroying the independent distribution channel.
The JTB Business Travel company portal explains that the NDC will give airlines more power to implement dynamic prices, “which does not always mean better prices for passengers” and for companies that pay the travel bill.
What is the NDC?
IATA details on its website that the NDC is a program for the development and adoption in the market of a new data transmission standard based on XML (NDC Standard), which allows the creation of sales opportunities through the indirect channel, the Global Distribution System (GDS) and travel agencies.
In August 2014, the United States Department of Transportation (US DOT) approved IATA Resolution 787 that gave rise to the NDC.
“Standards need to be improved to allow airlines to move to a dynamic content delivery model. This model recognizes that airlines and their customers need more real-time dynamic interaction between all parties: airlines, distributors and travel agents so that they can offer an intelligent response to all products based on who asks, ”says the resolution.
IATA specifies that this resolution recognizes that a standard process is required for airlines to create their own product offers within their systems, that is, to assemble fares, schedules and availability, which will be provided directly by the airline.
However, in a recent statement, Folatur indicated that although in its most important principles IATA maintained that the NDC “would facilitate a transparent display of the products offered and their comparison, benefiting the consumer”, its progressive implementation has been systematically violating “the letter and spirit” of that approval.
What do the organizations say?
Folatur, the main regional organization that brings together the main associations of travel agencies and tour operators in Latin America, highlighted that the intermediary role of travel and tourism agencies in Latin America is put at risk with the implementation of the reservation system.
This position was ratified by Cotal. Avavit stressed that the confederation considers that “these conducts of IATA members cover all major international markets, discriminating against the independent distribution channel to the detriment of consumers.”
The organizations maintain that technological advances have facilitated the direct distribution of tickets in air transport by travel and tourism agencies that have made it possible to add “efficiently” the widest offer of tickets in a single instance, independent of the airlines and for the benefit of the final consumer.
However, they view with concern that with the implementation of the NDC, the questioned pattern of conduct of the large airlines has been manifesting itself again.
Instead of making the market deeper and broader through the NDC, we are now trying to use this new tool to fragment the markets and dramatically reduce the pro-competitive role that indirect distribution represents,” added Forlatur.
“End the competition without competing”
Folatur recalled that IATA Resolution 787 refers to a “process to develop a technical standard for the exchange of data in the marketplace using XML”, however, he indicated that in practice what is being developed is not a single marketplace , but several separated from each other and simultaneously privileged.
“Therein then lies the central problem that consumers and independent distribution chains face today: they seek to artificially separate the markets and thus increase the dominance of already consolidated existing networks, putting an end to independent distribution,” he said.
The forum questioned the purpose of a distribution channel that cannot access all the airlines’ inventory, which “discriminates by charging fees for using global GDS” and that does not technologically allow the delivery of post-sale services for air tickets under the wing of the NDC. .
“Thus, you do not compete on a level playing field with independent distribution, but through all these competitively irregular paths the established airlines seek to annul it. They end the competition without really competing”, asserted Folatur.
The tourism forum emphasized that the “anti-competitive” objective of all these behaviors by IATA members discriminates against the independent distribution channel, which also harms consumers.
He pointed out that by fragmenting the markets and punishing independent distribution for the use of open GDS platforms, in which consumers can compare all the alternatives and perfect their purchases in real time, the range of possibilities that existed for this is reduced and “it increases the market power of the incumbent.
“The competition authorities are going to have to review the entire scenario of the domestic and international air markets, including eventually the cancellation of past authorizations of Joint Commercial Agreements (JBAs) and distribution technologies,” concluded the Folatur.
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