Growing Support for Standards to Enable Shopping, Sale of Ancillary Products across Distribution Channels

Some of the industry’s leading travel management companies, online agencies, and global distribution systems (GDSs) have confirmed their support for plans to implement recently developed, industry-wide technology standards which enable shopping, booking, payment, and reporting of ancillary services.

American Express Business Travel, BCD Travel, Carlson Wagonlit Travel, Despegar, Expedia, Egencia, HRG, Opodo, Orbitz, Orbitz for Business, Travelocity, Travelocity Business, Amadeus, Sabre Travel Network and Travelport have all agreed to support common technology approaches for the merchandising of airline ancillary services.

British Airways, Delta Air Lines, LAN and WestJet are also in support of the development of this capability as an option for distributing new products and services. Additionally, Air New Zealand has confirmed that it is mobilizing OC and EMD projects.

By combining ATPCO’s (Airline Tariff Publishing Company) category for optional services “OC” fare filing capabilities with soon-to-be-enabled Electronic Miscellaneous Documents (EMD), airlines will be able to quickly introduce their revenue-building ancillaries to the broadest travel audience through both indirect and direct distribution channels.

The group of travel industry buyers also endorses the development of common messaging standards for direct API solutions for those airlines that wish to manage the ancillary data directly with a GDS, enabling the easy and efficient shopping, selling, payment and reporting of ancillaries.

Over the past year, many airlines have evolved their business model in an effort to generate incremental revenue by either creating product bundles that differentiate their offerings or by bundling and unbundling various products and services, such as premium seating or baggage fees.

Many capabilities enabling the sales of ancillary services already exist within the GDS environments. Airlines that adopt industry technology standards are expected to plan how to best leverage it this year. The GDSs plan to provide corporations and travel agencies the ability to shop, book and fulfill airline ancillary services to travelers by late 2010.

“Convinced that merchandising and ancillary revenues are an effective way to differentiate and diversify in an industry highly pushed towards commoditization, LAN initiated a couple of years ago an important effort in order to actively participate in these business streams,” said Sergio Mendoza, vice president, Distribution and Revenue Management at LAN. “A multichannel strategy definitely helps us better serve our customers and represents a competitive advantage. On the other hand, standards are necessary in order to simplify and make the multichannel distribution feasible and efficient. We have a huge challenge defining those standards for a business model that is being created as we speak, but that is what makes all this so much fun.”

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