American Airlines’ recent announcement to push 40 percent of its airfares through NDC via the GDS by April 1 has created quite a stir. The question for buyers is what does that mean for my company, my travelers and my travel management company? Is AA unfairly using its power to force TMCs to use a lower cost distribution channel that only benefits them? Or is it moving the industry forward with a more efficient, lower cost and robust distribution model? I’m thinking both.

Corporate buyers are heavily dependent on online booking tools and TMCs to provide full airline content—fares, amenities, negotiated discounts, etc. The current GDS distribution channel has been around for decades and hasn’t changed much.

Why? Lack of competition comes to mind. GDSs and TMCs want a standardized process that doesn’t change. Change causes work and work costs money. A switch to support NDC will take time and expense. Legacy solutions typically don’t evolve unless forced to by market pressures. AA is that pressure.

OBTs—particularly the most dominant market player among them—must adjust their shopping process and user interfaces. How do you present a mix of NDC and non-NDC content to the user without confusing the traveler? How do you clearly display bundles and what they contain? How do you architect the solution to stay nimble and support likely content changes in the future?

TMCs must modify their mid-office and back-office systems to manage ticketing differences, refunds and exchanges, ARC reporting, etc. It means updating processes that were built decades ago and have historically required little maintenance.

To date, most TMCs and OBTs haven’t done the real work. Whether due to Covid or lack of buyer need, it hasn’t been done. They’ve been caught out by the AA announcement and it’s a wakeup call to get going.

Can TMCs and OBTs get it done by April 1? Not a chance.

When April rolls around, one of three things will happen. Option one, travelers won’t be seeing the best fares available. Option two, AA will show the fares in both channels past April. Option three, things will stay the same. I’d lean toward the third option due to agency and OBT pressure.

Nevertheless, buyers should apply pressure now to make sure the required modifications are being made to avoid longer-term issues. Everyone has a lot of work to do. It’s time to see real progress.

At some point, AA will stop postponing the shift, which will make this an even bigger issue—especially when other airlines match AA’s approach. If the shift occurs and your OBT and TMC aren’t ready, travelers will only see select lower fares on airline-direct websites and will question the value of the TMC, the OBT and the corporate air program. We’ll see leakage increase to the level seen in the hotel category. And once a traveler is approved to go direct, it’s hard to get them back.

Is this change good for the industry? The current airline distribution solution has been in place for decades. It’s shocking it’s survived this long. Any change would be a step forward. We can’t continue to rely on technology and requirements established in the 70s and 80s.

The legacy solution is so firmly established, it’s become the No. 1 impediment to innovation.

We can’t support blockchain either because we can’t modify the existing process to support it or the change would be too expensive. Bundled fares, new amenities, detailed traveler information, inventory control, cost reduction, advanced APIs, etc. They’re all potential benefits from a new and more nimble distribution solution.

When was the last time the GDSs had a new competitor? Without competition, companies lack incentive to innovate or reduce costs. We’re starting to see a few new competitors less dependent upon the GDS.

If OBTs and TMCs don’t evolve due to pressure from the airlines, losing business to a new competitor may do the trick.