United Airlines on Sept. 5 plans to remove Basic Economy
fares for domestic U.S. and short-haul Latin American flights from EDIFACT and
have that content offered only through its direct website or app, or New
Distribution Capability-enabled channels, according to a memo from United SVP
of worldwide sales Doreen Burse sent to corporate customers and travel
management company individuals who have subscribed to receive emails from sales
at United for Business.
“Basic Economy fares are designed to work in concert
with ancillary sales,” wrote Burse. “EDIFACT is not able to sell
ancillaries, therefore it is not an appropriate channel to offer our Basic
Economy content.”
United plans to offer informational webinars on the topic in
the coming weeks, “to keep lines of communication open and answer any
questions,” Burse wrote. In addition, the carrier has a new website
dedicated to its NDC offering.
“We think there will be a limited reaction from the
business travel space,” Burse told BTN.
Basic Economy fares are designed to work in concert with ancillary sales. EDIFACT is not able to sell ancillaries, therefore it is not an appropriate channel to offer our Basic Economy content.”
United Airlines’ Doreen Burse
“Basic Economy for our business customers is less than
one tenth of 1 percent of what they buy,” added United VP of sales
strategy and effectiveness Glenn Hollister. “It’s not really about
business travel. It really is about the leisure travel side.”
The United move will come about five
months after American Airlines in April began to pull up to 40 percent of
its content from EDIFACT and make it available only in direct or NDC-enabled
channels—a distribution change that came with much consternation from buyers
and particularly travel management companies. Many corporate customers and TMCs
have cited the lack of communication and collaboration from American prior to
that decision being made and carried out.
Burse hopes to avoid the same backlash. United met with both
its corporate advisory board and travel advisory council to discuss the planned
removal of Basic Economy from the EDIFACT channel. “The conversations were
very open and positive and specifically what we heard from both groups was
‘thank you for being transparent,’ ” Burse said. ” ‘Thank you for
continuing to meet with us, and thank you for continuing to keep us posted.’ This
is the way we work and collaborate with them in an ongoing basis. There were no
real surprises.”
“We’ve been involved with not only those groups but
also a lot of individual players for a couple of years,” Hollister said. “The
announcement really is the result of all that input over an extended period of
time.”
Burse also reiterated what was included in her memo: that
United’s objectives are to support an omni-channel approach to distribution and
to support all customers’ buying channels of choice, to have ongoing
“strong collaboration” with all parts of the value chain to align
distribution costs with value while reducing economic differences between
channels, and to continue “investment in modernizing buying options
including expanding NDC and direct channels’ capabilities.”
When asked what the endgame was for NDC and how long there
would be both EDIFACT and NDC channels, Burse reinforced that United has
“and omnichannel approach, and we that as the approach for at least the
foreseeable future,” she said. “As far as the near-term, as far as
removing everything from EDIFACT channels, that is not on the roadmap.”
Hollister agreed, but noted that “in the long-term,
maintaining both EDIFACT and NDC does not make sense,” he said.
“There are a lot of hidden costs in our business due to EDIFACT. I do
believe there will be an end-of-life someday for EDFIACT. That end-of-life will
happen after the great preponderance of our partners have moved to NDC. We are
not looking to create a cliff or something that creates a crisis for them. We
want them to move and will support them moving.”
