Traxo, Inc. the world's only provider of real-time corporate travel data capture today alerted the corporate travel industry of the risks posed by the expected increase in non-compliant and off-system flight bookings as the NDC will finally go mainstream in 2023.
Andrés Fabris, CEO and founder of Traxo, comments: "2023 will certainly be remembered as the year of NDC as it finally went mainstream. The looming April AA deadline poses some real risks for the AA sector." corporate travel, as a significant percentage of AA's NDC fares are expected to only be bookable directly through the airline or other NDC-ready travel intermediaries, which are often outside of approved corporate channels.
"This change is occurring, firstly, because the greater variety of NDC travel packages offered by airlines creates a greater temptation for business travelers to go outside the channel, and the options are apparently more personalized and, therefore, more more attractive. And secondly, because in 2023 we will see more airlines offering more content solely through their NDC channels, as American Airlines will do from April. These actions mean that corporate travelers will be forced to leave the system to book those fares.
These out-of-system bookings can pose significant challenges to TMCs and corporate travel managers, as this 'leakage' not only often translates into higher travel costs, but also reduces spend visibility and policy control. It also raises troubling issues for the employer. Too often, the problem of leaks goes unnoticed, as most companies simply don't have the data tools to track bookings outside of the system. As a result, they are unaware of the true scope of the problem and may not realize the magnitude of this new challenge.
"Other major US airlines such as Delta and United are watching with great interest how the industry reacts to the AA deadline. If companies and agencies fail to set aside AA bookings, and AA's direct market share remains neutral or moves to positive, it is very likely that other airlines will soon follow with their own NDC mandates and deadlines.
"Given the time and effort it takes for companies to select and launch a new TMC, it is unlikely that companies will be able to quickly shift gears and start using a new travel agency that is NDC-ready. Not only These decisions take time to make, but most entertainment agencies are not equipped to pass the companies' rigorous information security reviews, nor to manage the various HR, procurement and back-office processes that demanded by large corporations."
To understand the potential threat this poses and respond to this challenge, Traxo recommends that TMCs and corporate travel managers immediately take the following actions:
Find a way to collect data on ALL travel purchases being made, including both official channel bookings and non-compliant off-channel bookings.
Analyze the airline mix of all current air bookings to see how many of them are held by airlines committed to developing their own NDC solutions – the higher the volume, the bigger the problem.
Use this holistic data inside and outside the platform to optimize negotiations with airline suppliers. In particular, when searching for better fares through an airline's dot com site may be the cause of bookings outside the system.
The NDC has promised travelers more personalized and differentiated products and services, which will tempt them to book outside the system if they find traditional channels too inflexible. Any new approach must reflect the modern reality that corporate travelers are likely to book that trip one way or another, the question is whether or not they book through official channels.