American Airlines has announced a new NDC Incentive Program that will pay travel agencies a $2 commission for booking American flights through a Qualified NDC Channel.
In a statement provided to Travel Agent a representative of the airline said that the commission will apply per flight segment when booked on an American-approved NDC connection that is Level 3 Certified by the International Air Transport Association (IATA). Currently, these include American’s own NDC API and the SPRK web application, although the airline said that it is working with several third parties to offer additional approved connections in the near future. NDC (new distribution capability) is a new IATA data standard that aims to make it easier to sell ancillary products, such as seat upgrades, to customers.
The move makes American Airlines the latest airline to attempt to encourage bookings through NDC connections, although other airlines have attempted to encourage NDC adoption by applying fees to other booking channels. American Airlines’ codeshare partner British Airways, as well as its fellow IAG airline Iberia, recently announced a fee for bookings made through Global Distribution Systems (GDS) that will take effect November 1. Later, the two airlines announced an NDC connection that would allow travel agents to avoid the fee that was developed in partnership with TPConnects.
Similarly, Lufthansa Group announced the first GDS gee back in 2015, arguing that the cost of distribution through GDS was higher than through other channels. In April, Ukraine International (UIA) also introduced a fee for non-partnered travel agents when booking tickets on behalf of their clients using a GDS.
American Airlines said that agencies using the new NDC Incentive Program will have access to the best published fares, as well as several ancillary products and services, corporate and sub-corporate bundling functionality, and API access to American’s Flex Fund program functionality. The program will initially be rolled out to American-approved travel agencies that meet requirements published in the airline’s Addendum to the Governing Travel Agency Agreement (GTAA). The incentive will apply to every eligible booking, with no minimum volume or cap on incentive earnings. It will also apply to all American marketed flight segments, but not to interline segments not marketed by American.
In terms of payment processing, the incentive will be a back-end payment settled through existing ARC/BSP Agency Credit Memo, the airline said. Travel agencies can also opt to develop an NDC connection using in-house resources instead of connecting through one of the approved third party connections or using American’s SPRK web-based tool.
The NDC will also support frequent flier numbers, flexible date shopping, special meals, commissions, special service requests, post-servicing and name changes prior to ticket issuance or 24 hours prior to flight departure. The creation of group PNRs is not supported, but a previously booked group PNR can be claimed and serviced.
“American sees NDC technology as instrumental to the future of airline distribution and as a long term journey that requires partnering with travel agencies to continue improving the products and services we provide to our mutual customers,” the airline said when talking about how long it intends for the program to be in place.