Budget airlines including Ryanair and Easyjet have never been on the old GDS buying platform ©PA Wire/PA Images
Budget airlines including Ryanair and Easyjet have never been on the old GDS buying platform ©PA Wire/PA Images

Why Red Bull changed its travel buying strategy

5 February 2018

Travel buyers should start talking to their travel management companies (TMCs) now about how changes to flight booking technologies could impact them, Red Bull’s head of procurement has said. 

The International Air Transport Association (IATA) is rolling out a new purchasing system called the New Distribution Capability (NDC). NDCpromises to give buyers more flexibility over what ancillary services are bought with plane tickets – allowing them to choose if they want to pay for services including hold luggage, meals or airport lounges. 

But not all TMCs are geared up for the change, said David Oliver, procurement manager at Red Bull.

Speaking to SM, Oliver said buyers need to ask themselves and their travel partners what the changes mean for them and whether it will be good for businesses. “Are [your TMCs] ready for it, what do they think about it, what’s their position on it, do they believe in it?

“Also the more you understand about it – if [TMCs] are saying it’s a flash in the pan or it won’t be around or, ‘We’re quite confident that GDSs [the old Global Distribution System] will give everything’ – you have to know for sure that the answers you’re getting are correct.”

GDS is still widely used but the industry is slowly changing. Some airlines have started applying surcharges for firms buying through the old GDS system and low-cost airlines including Easyjet and Ryanair have never had a presence on GDS, said Oliver, who will be speaking about NDC at the Business Travel Show later this month.

“People like Ryanair. You can only buy from Ryanair so they can bespoke their offering and I think the airlines have seen that the Easyjet and the Ryanair model is a good model and that works.”

At the heart of the issue is making sure your TMC is compatible with the services your business uses, and although neither Ryanair or Easyjet are on third-party services, Oliver said Red Bull’s TMC is compatible with both firms’ direct interfaces.

“It’s plugging different bits of software in to talk to other bits of software and if your TMC can’t do that then maybe your people complain that you’re not getting that rich content that your travellers, your internal customers need,” he said.

Red Bull switched TMC in 2015 to Click Travel, a smaller provider with a stronger tech-based offering, after realising their old provider wasn’t providing the service the firm’s predominantly younger workforce was expecting.

“Technology needs to make the whole thing a quick and easy experience. People are seeing with Expedia, and LateRooms and AirBnB that it doesn’t have to be difficult, and maybe some traditional TMCs who perhaps invested in certain solutions and technology and software are now coming to a point where they can’t update them to a level where the new entrants are coming in.”

It’s easy to get comfortable or complacent with your travel arrangements, said Oliver, but if your business changes your TMC might need to change too.

“I think if you have someone who’s responsible for indirect procurement and you have a large travel spend or you’re desiring to get greater control over it, then it’s an area that’s worthwhile assigning some time to,” he said.

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