NDC - is it helping or hindering recovery in the travel industry?

Transcript

Will Owen Hughes:

So good morning, good afternoon, good evening, everyone. And welcome to our session right now on NDC, and is it helping or hindering the recovery? And I'm delighted to be joined today by Nadine Dawood Morgan, who is Qantas' head of distribution. Good evening, Nadine.

Nadine Dawood Morgan:

Good evening, thanks Will.

Will Owen Hughes:

[inaudible 00:00:37], thanks very much. Thanks very much for joining us. So look, obviously the industry is continuing to operate in hugely challenging conditions. I mean, [inaudible 00:00:49] got the positives that the vaccines are on the way. But with new variants, just in the UK here, we've seen the introduction of new quarantine measures really making it tricky for the travel industry. I guess first up, Nadine, if we maybe want to just have a little bit of a reflection on what the experience of 2020 was for Qantas. And really where is Qantas at the moment in terms of the recovery curve?

Nadine Dawood Morgan:

Well, I think 2020 was pretty shocking for everyone, to be honest, and we were no exception. It was absolutely not the year that we thought it was going to be. We were actually all set to celebrate our centenary. So we were about to celebrate the fact that we were one of the oldest-serving airlines in the world, and we never expected to do that with the backdrop of a pandemic. So it's been hugely impactful, just absolutely incredible. And I know that most airlines are in the same position, and the whole travel industry has had this massive, very long shock, really. I think from a Qantas perspective, there's been two parts of it for us. Because we actually haven't flown internationally for nearly a year now, because of our border restrictions. So the Australian borders are quite firmly closed. We've done a few repatriation flights, we've been supporting in that way, but commercially we've not really been flying internationally. And domestically it's been really challenging, because the borders have opened and shut quite quickly. So it's been quite volatile.

Nadine Dawood Morgan:

So for those of you who aren't aware that we've been quite conservative round how we managed that. And so when there has been cases, the borders have shut. So that's been quite difficult to manage, and from an airline point of view, it's meant a lot of change, and we've had to pivot really quickly. And I mean, it's been an incredible learning, really, in some ways. We were actually founded off the back of the First World War, and off the back of another pandemic. And so we're quite resilient at Qantas, and we've weathered a few storms, and this is no exception. Obviously it's huge, but yeah, it's been a huge challenge. Recovery-wise, we're starting to see the light at the end of the tunnel. We're still in a volatile environment, but domestically, we got back to about two thirds of our capacity, and we're hoping to get to about 80% by June. So we're hoping to get back on track, but it's obviously had a huge impact.

Will Owen Hughes:

[crosstalk 00:03:29]

Nadine Dawood Morgan:

[inaudible 00:03:30] we are in a transformation now with our business is changing rapidly, and it's been hugely impactful for the country, for the business, for all airlines really.

Will Owen Hughes:

[crosstalk 00:03:41] yeah, I guess you're in a bit of a different position to a number of airlines out there. You've got a huge domestic market and [inaudible 00:03:51] move more into NDC now. And if you look at where your NDC initiative was going, are COVID, and the impact of COVID in 2020, has that changed any of your plans with NDC? I mean, it probably had some near-term impacts, but did it change anything?

Nadine Dawood Morgan:

Do you know what? It's been such an interesting journey, because when it all started, when COVID, when the impact really hit, it obviously had a big shock. And we had a lot of momentum already going, and there was a pause, really, across the industry. And I think there were some of our partners that were just in survival mode. Some took a deep breath and went, "Okay, well maybe this is an opportunity to double down." And so we definitely slowed down, we didn't actually stop, though. And we had our production environment open, and we kept going. And it was quite short-lived, that pause, because we kept going. And we actually got up and running again, and some of our partners really wanted to accelerate. So even though it slowed, and I think it slowed across the whole industry, and it's really not back to where it was yet. There is definitely partners who have accelerated, and we doubled down, and we've gone back to very regular, really, cycles of every six weeks. We've got our team back on deck, and yeah, we've got quite a lot happening.

Nadine Dawood Morgan:

In terms of roadmap, it didn't really change the roadmap. Because our strategy was very long-term, and we were very focused on modernizing that shopping, and booking, and servicing experience. And I think the servicing piece had always been really important for us. And we work really closely with our agency partners, and it's crucial for adoption for us, for the adoption of QDP, that the servicing is really solid, and better than what we have today. And so that's always been a big thing. And I think that COVID has been one of those, because there's been so much change, and customers had to change [inaudible 00:06:12] bookings. There's been involuntary changes as well as voluntary changes, that servicing piece has become really, really important. But it was always a big deal for us.

Will Owen Hughes:

[inaudible 00:06:21] yeah, [crosstalk 00:06:23]

Nadine Dawood Morgan:

I think we talk a lot about content with NDC, and how exciting it is, and we're super excited about that. But we know that without the servicing capability being amazing, we won't have the volumes there for content.

Will Owen Hughes:

Yeah, yeah, yeah. And I think at Travelport, when we take a look back at what's going on across the industry, I think you're exactly right. I think maybe there was a little bit of slowing up at the height of some of [inaudible 00:06:51] COVID impacts. And sure, we've probably seen some airlines pause some of their plans while we get through this period. But actually, probably most of the airlines who were already invested in NDC, like Qantas, have been doubling down on that. And that's certainly where we're at actually, Travelport, we recognize that there's still a real desire to improve that whole retailing proposition. And we've doubled up our investment to make sure we can deliver on that, and do some of the catch-up on this, right?

Nadine Dawood Morgan:

[inaudible 00:07:29].

Will Owen Hughes:

To get all of that important stuff you just talked about, the servicing and whatnot out there. [crosstalk 00:07:36]

Nadine Dawood Morgan:

I think that's right, I think we've had some partners that have had to slow down a bit, but then we've had others that have accelerated. So there's an inconsistency across the industry, which in some ways it's good, because it means it's keeping moving. Which is fantastic for us, because we want it to go in that way. And it is long-term, it's a long-term strategy.

Will Owen Hughes:

Yeah. Yeah. So we touched on the fact that you're seeing the business coming back on the domestic side. And if I think back to pre-COVID, we heard a lot of discussion across the industry, and across airlines, around how NDC was going to be implemented within the corporate community. So looking at special offers and whatnot. But given the recovery is likely to come from the leisure side, and domestic at that, have any of those trends changed your thinking in how Qantas are going to come to market with NDC? I know you referenced the baseline remains the same, but has that changed anything?

Nadine Dawood Morgan:

Yeah. I think the volumes are going to be a bit different, the mix is definitely going to be a bit different, because we have a strong corporate market. But we're really quite confident the corporate market will come back, and we've been quite quick to adapt to what the leisure market looks like. So we've added a few new routes, we know that there's demand, both leisure and corporate. And it might be that the leisure comes back a bit faster, and the volumes that come through QDP and through our NDC channel are more in the way of leisure. But I think our strategy, it was never for a particular segment. And from a Qantas perspective, we have 13 million Qantas frequent flyers, and many of them are corporate and leisure customers, and they do both.

Nadine Dawood Morgan:

So I think we've not built our strategy around one segment, it's been about all. And it's probably more about the customers themselves. And so we've got the flexibility to be able to play in either space, and make the most of that, really. So I don't think it's changed it. Yeah, I don't think it's changed it massively. I think when we're thinking about the content pieces, and the new offers, and that kind of thing that we'll be releasing in terms of capability, a lot of that will be focused around our Qantas frequent flyers. And that is enduring whether it's corporate or leisure.

Will Owen Hughes:

Yeah. Sorry about that, technical problem on my side.

Nadine Dawood Morgan:

[inaudible 00:10:12].

Will Owen Hughes:

Yeah. Actually somebody tried to call me.

Nadine Dawood Morgan:

Oh, [inaudible 00:10:18]. Sorry.

Will Owen Hughes:

And that in itself is an interesting area, because I think, you talk about some of the content initiatives. And if we look, say, in Europe, there's a sentiment out there that all the NDC is doing, all the initiatives [inaudible 00:10:46] airlines is to remove fares that were previously available in the EDIFACT, ATPCO world. And only make them available in NDC. And so when we get to the end consumer proposition, they're struggling to find, "What is the value add? Where are we enhancing that experience?" What's your perspective on that? Because I'm sure you've got some plans for 2021 and ahead.

Nadine Dawood Morgan:

Yeah. We do, we absolutely do. We've got lots of plans, we're very excited. So I mentioned our frequent flyer program earlier, and I think when we've been building out our plans for NDC with, we've got a few different audiences in mind, really. And our agent community is obviously core, and we want to create, and modernize that booking and shopping experience, and servicing, obviously. But we want to create a better experience for our customers as well. Because we know that at the moment they can buy some products in the indirect space, and they can't service them, or they can't add on another product. And so it, for us, is definitely about making a better experience for our customers. As well as creating new tools for agents to be able to sell more Qantas, and be able to service their customers [inaudible 00:12:05]. So, yeah, it's definitely, the content is a big part of that. And making sure that we've got benefits for the customers, and the customers have a better experience. And whether that's because they've got access to more content, or a more seamless servicing experience, then there should be a better experience.

Will Owen Hughes:

Yeah. [inaudible 00:12:26] I think you recently announced some new frequent flyer capabilities to the marketplace. Can you elaborate a bit more on some of that?

Nadine Dawood Morgan:

Yes, we did. So one of the content features that we launched recently, probably in the last four weeks, was the ability to provide discounts for frequent flyers in the indirect space.

Will Owen Hughes:

Right.

Nadine Dawood Morgan:

And we've never been able to do that before, so that's very new. And given our program, and the strength of the program in this market, that's going to be really core. I think it is a really great opportunity, and it's a great opportunity for the trade as well. It's not something that we've ever been able to do before. And I think that talks to that direct benefit to a customer, and to our corporate customers as well, it spreads across all segments.

Will Owen Hughes:

Yeah. And I mean, that's a great example, actually, I would say, of where we are moving the narrative on with NDC beyond, as I say, just making certain fares only available in the NDC channel. That ability to, I guess, to a degree, it's personalize if you will, but have that frequent flyer qualification at shop. And so you can bring up particular options based on your frequent flyer membership. That's something we haven't been able to do before in the industry.

Nadine Dawood Morgan:

No.

Will Owen Hughes:

So that is [inaudible 00:13:54] and I think that's [crosstalk 00:13:57].

Nadine Dawood Morgan:

It is, it's really exciting. And I think for us as Qantas, we're a premium carrier, and it's not just about price for us, and it would never be just about price for us. So we want there to be a better experience. And some of the features that we are building, and the capability that we're building, is not about price at all. It's about value add for the customers, and value add for the trade as well, for the agents to be able to get more information. And it might be that there's richer content, or it might be, another one of the features that we've released in the last few months is the ability for customers to purchase carbon offsets. And reduce their carbon emissions when they fly with Qantas.

Nadine Dawood Morgan:

Now, this is a program that we've had running on qantas.com for a number of years, and it's really successful, and about 10% of our customers choose that. So we know it's important for our customers, it's definitely important for us as Qantas. And so that's something that's not price related, it's a benefit for customers, and for the agents that can actually provide that to our customers. That has never been available in the indirect channel before. So it's really exciting, and I don't know that anybody else is doing that, actually.

Will Owen Hughes:

Yeah, no, look, the green credentials piece was, I guess pre COVID hitting, it was the main talk in the town really.

Nadine Dawood Morgan:

Yeah, absolutely.

Will Owen Hughes:

So I know there probably are a number of airlines thinking about similar things, but I'm not sure they've actually implemented them as you guys at Qantas have done. And I can see there are, and that's a good point to remind people, you are able to submit questions. And I can see some coming up in the chat panel, which we can, actually, let's see what this one is.

Nadine Dawood Morgan:

That's a good question.

Will Owen Hughes:

Yeah. So just for the audience, "Do you think NDC could help airlines deliver safety information and protocols directly to agencies and customers?"

Nadine Dawood Morgan:

Yeah.

Will Owen Hughes:

Obviously it's becoming hugely relevant in the current climate. There's the making sure people are aware, because the regulations are very different in all the different territories. I know in Australia, for example, there's now a, I think is it a requirement that you have to pass the postcode information of the passenger to some of the authorities?

Nadine Dawood Morgan:

We do, yeah, [inaudible 00:16:30]. That's absolutely right, so we have to make sure that we are able to contact and trace a customer. So we need that postcode, and their email address, and their phone number as well, I think. But it's a really great question, because we've got two programs running as a result of COVID. One of them is Fly Well, which is all about wellness, and explaining to our customers all the steps that we're taking to make sure that they have peace of mind when they fly with us. And the other one is fly flex, which is explaining what our flexibility policy is. Because we've had so much volatility in borders opening and shutting, and people have had to change plans at the last minute. So those two programs have been really important for us in the last year, to explain to our customers what we're doing.

Nadine Dawood Morgan:

And NDC absolutely can help that, because you've got the ability to do rich content, and to be able to serve rich content to an agent. So if we think of the old world where the information that we're able to send to an agent was about fares, availability, and scheduling. We are now able to say, "Well, this is [inaudible 00:17:31] program, and this is what you can talk to your customer about. And this is going to help them make a decision about who they choose, or when they fly, or what they do." So I think that's a really great question, and it's an important point to touch on. Because it's just more information being able to be served from an airline to an agent.

Will Owen Hughes:

Yeah. And I think this is one where [inaudible 00:17:53] from our perspective, we're looking at building in that kind of attribute information up front. Both in the shopping experience, but also, we've got various resources for agents to go and check in for [inaudible 00:18:11]. This the next question I can see coming up, vaccine information [inaudible 00:18:14] what the process is. So we are working with airlines across the world to make sure we keep that information refreshed in our systems. Are there any initiatives, are you pushing out that information, the vaccine requirements from a Qantas perspective? Because I guess, I suppose at the moment, with most of your operation domestically, that's probably easier to manage than if you were laying back on the international services, where there could be lots of different policies and [crosstalk 00:18:44]

Nadine Dawood Morgan:

Yeah, we're in a slightly different position to some of the other countries. Because I think the need for the vaccines in certain countries is very different to the need for vaccines here. And so the speed at which they're rolling out is different. So at the moment, domestically traveling, you don't need a vaccine, but you do need contact details and contact tracing. I think that vaccine piece [inaudible 00:19:08] going to be so crucial as we move forward, because it will be the piece that helps us all be able to travel round the world again. Because, I mean, nobody is really able to travel at the moment, and I think everybody, this industry is waiting for the vaccine. So that information is going to be really important, and it's not impossible. That is the beauty of NDC, it's about pumping information, and being able to get information to agents, and to our customers. And so I'm sure that's doable.

Will Owen Hughes:

I know, yeah.

Nadine Dawood Morgan:

We're not doing it right now, but we're going to need to probably.

Will Owen Hughes:

Yeah, to be international, to bring back international 100%. And I know we are at the moment trying to, again, at Travelport, we've got several different programs out there, vaccine passport initiatives. And we're trying to work across them all, because it's a global initiative. And so we're trying to just make sure it isn't hugely complex. Okay, so I guess one of the areas which you've alluded to a few times, Nadine, is on the servicing proposition. And I might just reference back, and you were obviously part of one of our recent leadership councils where this topic was brought up. And the council is a cross section of 20 plus top industry players, airlines, corporations, agencies. And we were going through the challenges around servicing.

Will Owen Hughes:

And I think one of the things that that came through was, and I think you've already said this, Nadine, right? For all the benefits of the improved retailing experience, the new things you can do with NDC on the whole shopping and selling experience. It means little if you can't manage and service those bookings, so getting a robust serving solution is key to see NDC scale. And I think the findings from that, and I know you guys at Qantas were broadly in agreement with this, was those core capabilities. The refunds, the exchanges, the schedule changes, that type of stuff, you absolutely have to have that. But then what was interesting, I think, from that session, was then as you got into nuances between servicing ancillaries, or managing multi-passenger bookings, which would be probably more leisure-focused. Or indeed the ability to handle unused tickets, which is a bit similar to vouchers, right?

Nadine Dawood Morgan:

Yeah.

Will Owen Hughes:

Which is very focus now we're in these challenging times of COVID. But [inaudible 00:21:52] interested just to hear your perspective as you dial down through, because it is like an onion, servicing, right? You peel back one piece of key functionality, and it goes deeper and deeper. And I suppose if that's one area where NDC has faced a bit of a friction and challenge from the marketplace, is just how complex some of that stuff is, right? But where are you guys at with-

Nadine Dawood Morgan:

It's so complex.

Will Owen Hughes:

Yeah, [inaudible 00:22:20].

Nadine Dawood Morgan:

Yeah, so we are so passionate about it, that even when we're talking about roadmaps internally, we have [inaudible 00:22:28] content and servicing. And servicing is just so important to us, I can't even tell you. With the complexity that's in the servicing, and that level of detail, I think everybody who's on our NDC team are incredible, and they are absolutely in the detail. But when we're explaining it to other parts of the business, it's always really interesting. Because we're like, "Oh, [inaudible 00:22:47] we have to get [inaudible 00:22:48], and we build that." And they're like, "What is that?" So very complex, but it's crucial. We know, and we talk to our partners all the time, and they're like, "There's no way that the adoption will happen unless we've got that not just solid, but better than what it is today."

Nadine Dawood Morgan:

And that's the ambition really, make it [inaudible 00:23:08]. Because there's gaps, and we want to make sure that that servicing is amazing. And so we've actually, in terms of our process, when we've got a tech partner connecting, we are not allowing bookings until the servicing capability is there, and that it's all connected, and all working. So that's how important it is to us that it's working as well as it possibly can. And I think the other thing for us is that it will never be finished. Because you're right, it's an onion, as soon as you start building.

Will Owen Hughes:

[inaudible 00:23:41].

Nadine Dawood Morgan:

And the more that you learn, and the more [inaudible 00:23:43] put, and there's external factors. Like we will all have learned about new servicing things that need to be done as a result of COVID, like being able to [inaudible 00:23:51] postcode. That's never-ending, it's always going to evolve. And as a business, we're always going to strive to make sure that we are giving our customers the absolute best service in whatever channel. And so we're always going to be building on that, always. So it's going to be a job that's never done, and it has to always be a really huge focus for us.

Will Owen Hughes:

Yeah, and I don't mean to be divisive, but do you see any differences between leisure and business travel needs there? Or is it [crosstalk 00:24:26]

Nadine Dawood Morgan:

Yeah, there is a difference. And I think COVID has been really interesting, because it's really shone a light on it. Because we're very used to our corporate customers having to change things. Because [inaudible 00:24:38] meeting changes, they need to change things. And we're very used to that, and we're quite comfortable. Leisure bookings are a bit different, and they don't change as much. But I think with the situation that we're in with COVID, there's been so much change, and people have had to change all the time. So it's great that we've got that experience, and we've been able to learn it, and we'll be able to apply it [inaudible 00:25:05].

Will Owen Hughes:

Yeah. And I think that's, if anything, the involuntary changes, the schedule changes as a result of regulations changing, that's just so crucial. We saw that, the impact of all of those changes coming in, and people really having to work all hours of the day to manage through that stuff. You have to have that in place to have a successful NDC [inaudible 00:25:33]. Looks like there's a question coming in for you here, "Did Nadine say [inaudible 00:25:40]." I'm not sure what the context [inaudible 00:25:44], "Tech partners can complete bookings on QDP now as servicing is incomplete?"

Nadine Dawood Morgan:

I think maybe that means, maybe the person is asking, "Can they not?" So to be clear about that, so it's a requirement of our tech partners to be able to service bookings independently. And to have all the right tech to be able to service a customer to the level that we have set, before they can start completing bookings. [crosstalk 00:26:14]

Will Owen Hughes:

Yeah, and we know that well, because obviously we're integrating with you. And we agree with it, to be honest, as do our alpha customers. Because the feedback they've given is we need to have that baseline of servicing in place before we can confidently scale, and service passengers. So I think we all agree with that sentiment, and working hard to deliver on that.

Nadine Dawood Morgan:

Yeah, we want everyone to be having a better experience. And so we don't want agents to book something in QDP and then not be able to service it. And then have to ring someone, or do a work-around. And we know, and we talked about it the other day on the call, there is work-arounds in some of these instances. But that's not our ambition, and we will strive beyond that.

Will Owen Hughes:

Yeah. Yeah, definitely. Work-arounds don't work if you want to scale, for sure.

Nadine Dawood Morgan:

Yeah. Yeah, we want it to be excellent.

Will Owen Hughes:

So I guess we're coming up to the top of the slot. I guess just one thing is, and obviously you've given us an update on the frequent flyer side. Are there any other things you can, I mean, appreciate it may be commercially confidential at the moment. Are there any other things you can allude to that are coming in 2021, that are going to excite with Qantas' NDC plans?

Nadine Dawood Morgan:

Yes. So I can't go into too much detail, but we do have, as I said, our servicing roadmap is still very robust, and we still will continue to focus on that. From a content point of view, there is a lot of value add stuff that we've got on our roadmap. And I think one of the pieces that we haven't talked about a lot here, and it's probably a whole topic in itself, is ancillaries. And from a Qantas perspective, we are a full service airline. But we have a number of ancillary products that we know are really important to our customers, that can't be sold at the moment through the indirect channel, or have servicing elements that need changing.

Nadine Dawood Morgan:

So ancillaries is going to be important for us this year, which I look after as well. So selfishly, I'm dying to get all the ancillaries into QDP. So yes, there's definitely going to be lots of fantastic content in the months ahead, and we're releasing things really quickly. And it's great to see, it's really positive. We've got some great momentum, and that's a real [inaudible 00:28:52] in what has been a very challenging year.

Will Owen Hughes:

Yeah. So, I think this is going to be a year of hopefully moving away from just getting the plumbing in place.

Nadine Dawood Morgan:

I hope so.

Will Owen Hughes:

As we've talked around a lot in the industry, and getting some real added value going through the whole NDC initiative. So that's brilliant. Well, look, Nadine, really, thanks so much for joining us so late at night for you down in Sydney.

Nadine Dawood Morgan:

[crosstalk 00:29:18]

Will Owen Hughes:

Really informative session today, brilliant. Thanks a million, thanks everyone.

Nadine Dawood Morgan:

Thank you so much, Will. Thank you everybody, thanks for the great questions.

Copyright policy: All transcripts on this site are the copyright of CAPA - Centre for Aviation. Our reproduction policy is as follows: you may quote up to 400 words of any transcript on the condition that you attribute the transcript to CAPA - Centre for Aviation and link to the original video page. All other use is prohibited. While we aim for 100% accuracy in the transcript, there may be some minor transcribing errors.