We're doing things a bit differently on the third installment of Zeno Live in 2022. Serko host and SVP of North America Tony D'Astolfo chats with United Airlines Regional Digital Sales Manager Mike Fitzgerald, who guides us through a presentation on the ABCs of NDC.
If you've ever had questions on or were confused about NDC, this is the Zeno Live for you as Tony interviews Mike throughout the presentation. From content to aggregators and everything in between, Tony and Mike provide an understandable breakdown of NDC. Also, learn how United segments its product, the problems created as the GDS repackages each and how NDC solves any of those issues.
At the conclusion of the presentation, Tony takes Mike into the Zeno Zone for some quick-hit get-to-know-you questions
Watch the recording or view the full transcript below.
Tony D'Astolfo: Hi, and welcome to Zeno Live, the new live video series from travel booking and expense management provider Serko where we feature subject matter experts on various topics across the corporate travel industry. I'm Tony D'Astolfo, today I'm joined by Mike Fitzgerald, Distribution Technology Sales Manager, Digital Sales at United Airlines. Mike, thanks for joining us.
Mike Fitzgerald: Glad to be here. Thanks for having me.
Tony D'Astolfo: Now, Mike, I'm an alumni, 20 years United Airlines and when I was there, we had corporate sales, we had agency sales, cargo sales, meeting sales. We did not have digital sales. How long has digital sales been a thing at United Airlines?
Mike Fitzgerald: Digital sales at United has been here for four years and I'm now just reaching my four-year anniversary with United.
Tony D'Astolfo: And how big is the team?
Mike Fitzgerald: The team today is about 20 people. We work on a number of different projects. In the lane that you and I are talking about there's about six people.
Tony D'Astolfo: Very good. All right. So our usual format at Zeno live is an interview, but today we're going to do something a little different. NDC has been a topic of interest for years, but for those not directly involved, particularly on the buyer side, I believe there's still a lack of understanding and some misconceptions of what it is or isn't.
Tony D'Astolfo: I was at an industry event probably a couple months back. I saw Mike do a presentation that I thought provided a really good practical overview of NDC. So I've asked Mike to join us today on Zeno live and to share that presentation with us. And then I'll pipe in with some my questions and/or color commentary as we go through it. So, Mike, you ready to rock on this?
Mike Fitzgerald: Let's go.
Tony D'Astolfo: All right, let's do it, over to you.
Mike Fitzgerald: Okay. So let's go to the next page and I'm going to go through something that I'm really required to read as we talk about NDC. We always want to make sure that there's not someone in the conversation who takes the wrong message away from the discussion. So keep in mind, required on my behalf, United is channel agnostic. We don't advocate or promote any one channel over another. We have content agreements in place with all three major GDSs. Now that used to save full content agreements, but those have expired offshore. Next, we don't provide incentives to a customer or a seller for choosing one channel over another. And we do believe that where a business consumed schedule price and inventory is a cultural decision that each customer needs to make on their own.
Mike Fitzgerald: So let's go to the next page here, a little bit more about digital sales. So like Tony was just mentioning, there are a number of different sales teams at United. We have the field sales team and the global sales teams that work with customers on what they buy from United. I work with them on how they buy it. Our mission statement is as a member of the digital sales team at United, I put United's most desired content in front of world class customers and sellers via the most efficient distribution systems.
Mike Fitzgerald: Okay. So here, lot of definitions on the page, but I'll go through a couple of them. In the category of content on the left, you see SPIM, schedules, prices, inventory, and merchandise. Those components can be sold through the different options that you see under that content category. Edifact, which is the legacy interchange structure that is used by the GDS systems, airline.com and also NDC. Within NDC United works closely with Farelogix on our ability to distribute that content. And-
Tony D'Astolfo: Real quick on that one, there are other outlets for that though, right? On the NDC part. There's a standard, but there's multiple ways to bring that standard to market. Am I right there?
Mike Fitzgerald: Absolutely.
Tony D'Astolfo: Okay, good.
Mike Fitzgerald: Okay. Next and I'll skip over to the category of alternate where you have the aggregators listed. That's the ability for a party other than that legacy system to provide content to your corporate travel program. And many of the names you'll find in that listing are familiar like Travelfusion or Atriis but we'll talk about those more in just a minute.
Mike Fitzgerald: All right, let's go on to the next page. I think the rest of the definitions, people are familiar with. All right, so a little bit more about the legacy air shopping process. Today United on the left hand side of the page, will take our product and divide it into three attributes, fares which are filed through at ATPCO, schedules through OAG and inventory through our passenger service systems. In turn, the GDS is going to repackage those attributes and make an offer to the traveler. The problem with that process is that United never knows who the traveler is in the shopping process. Therefore we can't extend to them their mileage plus entitlements like the economy plus seat for example, or if they're not entitled to those components of those products, we don't have the ability to understand that it's now time to make an offer to them, for them to potentially buy one of those products. NDC solves that. That's where we find the magic in this process.
Mike Fitzgerald: Oh, okay so here the role of the industry players, they are confusing. At the top of the page here, again United creates our content, schedules, price, inventory, merchandise. In the center of the screen you've got two different categories of companies that aggregate the content. On the left hand side of that box you see the Edifact channels, Travelport, Amadeus and Sabre, all of which are working on their own NDC solutions. And on the right hand side of that box, the XML API solutions, the NDC channels. These are the aggregators like Atriis, Travelfusion, Winding Tree and Duffel. There's actually quite a few other names on that list as well. In fact, United works with at this point 14 different aggregators, but my opinion, the magic happens in a company's corporate travel program with the players at the bottom. With such high adoption rates around the world these are the products that are bringing the content to the traveler when they make their reservation. And the capabilities of those products are probably one of the most powerful components of your corporate travel program.
Tony D'Astolfo: And for those products, there's the need to connect to both the left and the right hand side of the people above, right? To access the NDC content you're going to get your traditional content on the left hand side with the GDS, on the right hand side one or multiple content sources could be availed to make the NDC content available, right?
Mike Fitzgerald: Very much true.
Tony D'Astolfo: Okay. Let's keep going.
Mike Fitzgerald: Okay. So with that previous page, we have a number of different concerns that are often expressed in the conversation. Well, what about servicing of a booking? What about duty of care? Mid-office, back office routines, all of these different things that are very much entrenched in those legacy systems. The reality is there are options in the market place to accommodate those processes today. The options do exist and it's worth sitting down to have a discussion about them. And when those discussions take place, we at United always say it's very valuable to have your travel management company, your corporate travel manager, potentially your procurement people, just so that decisions aren't being made in a silo.
Tony D'Astolfo: And the one thing I will also point out for the audience is, and I think this is blindingly obvious, but just to make sure in the case of an OBT we are emulating in a TMC, a travel management company's environment. So they are the servicing agent where the booking portal and they are the servicing agent. So it's vital that you have those two components.
Mike Fitzgerald: Agreed, agreed.
Mike Fitzgerald: All right. This here is just really a snapshot, an example of one of the options that is out there in the marketplace. It's a product offered by Farelogix. It's called SPRK. It's an agency desktop tool. When we start to talk, and there's a number of those out there by the way, but this particular one, it can solve many more problems than I think the industry knows. SPRK for example, in addition to being that agent desktop tool that services in NDC booking for those companies that have a hybrid approach to their corporate travel program, for example, they let the travelers book on airline.com and through an online booking tool that they've enlisted like Zeno for their corporate travel program, the agent can actually tap into those bookings regardless of the source. So these products, probably a lot more emphasis should be put on them out there, but the reality is they solve a lot more problems than I think the industry is aware of.
Tony D'Astolfo: Yeah. And I think this comes again, back to the previous comment I made, where the servicing of the reservation once it's been made, right? As a booking tool, I am emulating, I am becoming basically a virtual travel agent in the TMC environment. If I pull in content and make a reservation, it flows seamlessly into their mid office and back office, they can service the reservation. In a non GDS content source, there's going be some, there's a gap, right? And so you're going to need something like SPRK. And I think one of the most prevalent solutions is just to create a passive segment, which enables the servicing, but also comes with some cost and some additional complexity. But this is a very important part of this, right? You need to consider the servicing component after an NDC booking is made.
Mike Fitzgerald: I 100% agree.
Tony D'Astolfo: Yep. Okay. All right. Let's keep going.
Mike Fitzgerald: All right. So here this screen may look somewhat familiar here. The travel manager of yesteryear was tasked with choosing a travel management company, an online booking tool, and a GDS to power their program. The reality is those choices now fall into are now digging through a catalog, a portfolio of many, many more players, because remember you've got airlines around the world who are taking content out of the GDS. As they take that content out of the GDS, I think they're recognizing that they're being very successful with that strategy. My guess, my prediction, they're not coming back to that legacy system. The reality is for the travel manager to get that content, they have to consider the options that are here on the front page.
Tony D'Astolfo: And tons of options. Again, this goes to the point of how do I avail the content? How do I get the post booking content into my workflow so I can service my client, right? And I can service my client wherever he buys that ticket.
Mike Fitzgerald: True. True. I've always, and you've heard me say this a number of times, Tony, that we're one of the... For the travel manager who has always been doing it the same way and is comfortable doing that way, it represents that phrase I've always used we're one of the few industries I can think of, that's still doing Christmas shopping in the Sears catalog, and it's time for things to modernize. All of these tools you see help with that process.
Tony D'Astolfo: Yep. Totally agree. But if you were shopping in the Sears catalog, and you were wrapping your Christmas gift at home, you have to consider that, right? If you bought it or if it came wrapped, right? Adding that service component, just a small little touch. I always like to remind people that the servicing component is the one that I think most people get challenged with.
Mike Fitzgerald: Very much agreed. And that's where I emphasize that point where I made earlier, that when it comes time to talk about and consider all of these new options, it's really, really important that you have your travel management partners sitting side by side with you, along with the appropriate decision makers at your corporation, because things will be different. Your agreements will look different moving forward.
Tony D'Astolfo: Yep. Okay. Now let's keep going.
Mike Fitzgerald: All right, we're going to start wrapping it up. So when we do talk about NDC with a corporate customer, with an agency, we talk about reasons for and against connecting to an NDC channel. In the for category on the left hand side for the company, there's more content. There are different channel choices. You've got companies out there who are indeed enabling a hybrid approach. They've got the opportunity to book through a direct channel, an NDC channel, a legacy channel. And with that, there's also cost avoidance. So if you think about all of the airlines around the world that have a strategy with continuous pricing today, the way we describe continuous pricing is that it's the publishing of pricing between those 26 traditional fair buckets. And with United, the prices that are published in a continuous pricing strategy will always be equal to or lower than a legacy system. That represents cost avoidance.
Mike Fitzgerald: For the traveler there's richer content, there's custom content. And I use the example here of let's pretend you work for a technology company in San Francisco, and you have a frequent amount of travel to Mumbai. The policy may not allow for that person to sit in the forward cabin, but you may as a travel manager may adjust your travel policy to allow, say an economy plus seat. Well, this custom content based on the blessing of the corporate travel manager can be something the traveler books in one shot rather than the disjointed process today that currently takes place. There's the efficiency of self-service changes. I would argue that most corporate travelers are self servicing anyway, and that at the bottom, the entitlement shopping that mileage plus status recognition.
Mike Fitzgerald: And on the right for the traveler seller, the agency is out there in their sales pitch is saying, "Hey, look, I do have full content." That definition of full content is much different than it was five or 10 years ago. Leakage in friction because of my capability of getting that content is reduced and we still have the control of an OBT to manage the overall process.
Mike Fitzgerald: Now on the next page, they are the reasons against connecting to an NDC channel. There will be an impact on TMC economics. Pricing will change, that price schedule will change. There'll be NDC partner fees. For example, if you're tapping into that NDC content through Travelfusion, there will be a premium on that booking. In the traveler category, it requires that push to self-service. Again, I argue it's probably happening already today. The TMC is going to need to adjust their workflows and tools. That becomes a very big part of the discussion. There's the communication challenge just as there is with anything that changes in a process that's been well established.
Mike Fitzgerald: And then content confusion. One system is saying, one thing on pricing, one system is saying another thing on pricing. Why does this put particular fare have such a great description as to what I'm buying, but in this other system it doesn't? On the right hand side in the travel seller category there's that degradation of the mid-office and back office routines. There are solutions, but it's a conversation that has to be had. And then the overall change management process. And I do believe the travel sellers are going to compete on that in the future. Who's doing it better, is going to attract the new customers to their portfolio.
Tony D'Astolfo: Michael, well done. Thank you for that really great overview. Hopefully it kind of clarified things for our audience. While we've been talking about NDC for a very long time, I still believe particularly on the business travel side, that we're at a relatively early stage. And so anytime we can bring information to our listeners out there, we love doing that. And I appreciate you spending some time with us to do it there.
Tony D'Astolfo: All right, Mike, and now listen, if you've ever seen Zeno Live, you know that I'm now going to put you into the Zeno Zone, right? We're going to switch it up a little bit.
Tony D'Astolfo: Are you ready for some quick hit questions?
Mike Fitzgerald: Absolutely.
Tony D'Astolfo: We'll have some fun and let us know a little bit more about Mike. All right, so here's number one. You have a major business decision to make, and you can make one phone call, who gets that phone call?
Mike Fitzgerald: If it's a United-based decision, I go to my fearless leader. His name is Anthony Todd. One of the smartest men you've ever encountered in the business world.
Tony D'Astolfo: I know Anthony can't go wrong. The only problem is you're probably going to go to his voicemail because he's always so busy. That's a great decision. All right, Mike Fitzgerald, you have three dinner guests, any dead, alive, whatever, three dinner guests, who's at Mike's table?
Mike Fitzgerald: Okay. The first one would be my grandfather. He passed away before I was born.
Tony D'Astolfo: Ah, okay.
Mike Fitzgerald: I never had that opportunity. From a business perspective, this is going to be a bit of a callback, I would choose Donald Burr, the founder, former CEO of PEOPLExpress. I thought that brand back in the day was fantastic.
Tony D'Astolfo: Very interesting.
Mike Fitzgerald: And really, yeah, I still to this day find it very, very, very interesting. And then from a celebrity point of view, I'm a New Jersey guy, Bruce Springsteen.
Tony D'Astolfo: I was going to say Bon Jovi, not Bruce Springsteen.
Mike Fitzgerald: No.
Tony D'Astolfo: Well, I'm glad to say Springsteen. All right. Now, was your grandfather around when PEOPLExpress was around?
Mike Fitzgerald: No, he passed away in the sixties.
Tony D'Astolfo: Ah, okay. So long time ago. So that'd be a very interesting conversation. All right. All right, I got you three guys. There's four of you now. Where are you going? You going to a dive bar or are you fine dining?
Mike Fitzgerald: It'll be the dive bar as my first choice and I'd need to lose some COVID weight before I go to the fine dining so.
Tony D'Astolfo: All right. Well, I think with, well, I don't know Burr, I think Springsteen comes off as a commoner, but I betcha he does a fine job in the fine dining.
Mike Fitzgerald: Back in the day. Springsteen would've flown PEOPLExpress.
Tony D'Astolfo: Exactly. All right. Finally, last thing, Mike, before we let you go, I'd like you to make a prediction, something that you think will happen in our industry in the next 12 months. And remember this is being recorded so we could go back and call you on this.
Mike Fitzgerald: Okay. I think that with the great resign underway, the discussion of content and everything that's happening on our industry, companies are going to make their corporate travel policies, particularly for the road warriors, more robust to retain and attract talent. And that makes this conversation that much more relevant.
Tony D'Astolfo: All right. Interesting. That's a good one. I like it. All right, Mike, listen, I want to thank you for being with us today. I thank you for sharing all that great information. I also like everyone else who joined us live, thank you for being here today. And I hope you'll join us again on the next installment of Zeno live. Until that time, this is Tony D. and Mike Fitzgerald signing off.