Sean Menke, president and CEO of global travel technology leader Sabre Corporation (NASDAQ: SABR), told senior executives gathered at an industry conference in Dallas that the continued growth of low cost carriers (LCCs) and downward pressure on airline pricing are driving factors of the new technology landscape. Menke emphasized that Sabre is committed to leading on the development of next generation distribution and retailing solutions that leverage the International Air Transport Association’s (IATA) New Distribution Capability (NDC) in ways that will benefit airlines, travel retailers and consumers.
Menke said that the development of NDC standards was just the first step in a series of changes that will impact the way airlines market their services and how travel agencies retail those services to consumers. But there are a host of other implications, including airline revenue management, ticketing fulfilment and servicing and other back-office functions that travel agencies provide in support of airlines – most especially travel management companies that support business travellers. “Sabre has a history of bringing together the interests of travel suppliers and travel retailers and finding ways for technology to move the industry forward. The conversations we have today with airlines and agencies are very different from our discussions even a few years ago. The forward-thinking people are focused on driving value creation for airlines and agencies alike. That’s how we will make NDC work. Over the coming months, we’ll be talking more about how we will bring this to market, but we have no intention of giving up the technology leadership role we have played historically,” said Menke.
Menke observed that while there is a perception of airline industry consolidation steering airline financial results, “the real impact on airline economics has been the explosive growth of low cost carriers, impressively moving beyond the leisure travel market and successfully driving pricing and competition across both the business and leisure travel segments,” said Menke. “These factors – which we see at various levels in all regions of the globe – require traditional carriers to differentiate their offerings and find new ways to drive revenue growth while still competing for the price-conscious traveller.”
Menke spoke at The Beat Live, an annual gathering of travel industry executives who represent airlines, hotels and travel management companies. He reiterated Sabre’s commitment to NDC standards, saying that the company is already Level 1 compliant with a roadmap to become Level 2 and Level 3 compliant in 2018.
“NDC started the public conversation about building out a new level of technology standards that enable airlines to offer more customized products and services, indicative of the branded fares, ancillary services and digital retailing trends that characterize air travel today,” said Menke. “We are fully committed not only to incorporating NDC standards, but giving them broader application so that airlines, agencies and consumers will get the full benefit of what NDC intends to accomplish.”
