Mastering NDC: Advanced Strategies, Cost Considerations, and Market Comparison

New Distribution Capability (NDC) is revolutionizing airline retailing, allowing travel sellers to access richer, more personalized content directly from airlines. While foundational strategies exist, this article delves deeper into why NDC is crucial, its cost implications, expected integration timelines, common challenges, and a quick comparison of leading solutions.

Why NDC? The Case for Adoption

The Shift from Legacy Systems

Traditional Global Distribution Systems (GDS) have long dominated airline sales, but they come with limitations—restricted fare types, lack of personalized offers, and heavy reliance on intermediaries. NDC allows airlines to take greater control of their distribution and merchandising strategies, leading to:

• Dynamic Pricing & Personalized Offers – Airlines can present unique fare bundles based on traveler preferences.
• Direct Engagement with Travel Sellers – Eliminates middleman restrictions and increases content visibility.
• Better Ancillary Revenue Management – More control over add-ons like baggage, seat selection, and in-flight services.

Market Trends Driving NDC

• Growing Consumer Expectations: Travelers want an online booking experience similar to Amazon or Uber—seamless, dynamic, and customized.
• Competitive Differentiation: Airlines adopting NDC can provide richer offerings, setting them apart in a crowded market.
• Regulatory & Industry Push: IATA and major industry players encourage adoption as part of airline retail modernization.

Cost of NDC: Pricing Models & ROI Considerations

How is NDC Priced?

Airlines implementing NDC often face varied cost structures depending on their selected provider and level of customization. Common pricing models include:

• Transaction-Based Pricing – Providers charge a fee per booking made via the NDC channel.
• Subscription or SaaS Fees – Fixed monthly or annual fees for platform access.
• Revenue Share Models – Some vendors take a percentage of bookings processed through their system.
• Custom Enterprise Pricing – Larger carriers negotiate bespoke solutions based on volume and features.

Assessing ROI for Airlines

For airlines, evaluating the return on investment (ROI) for NDC adoption requires analyzing:

• Revenue Gains from Ancillary Upsells – Higher conversion rates on add-ons increase profitability.
• Savings from Reduced GDS Fees – Direct distribution through NDC reduces intermediary costs.
• Increased Customer Retention – Personalized offers and a better user experience lead to higher loyalty.
• Operational Efficiencies – Fewer manual processes in fare adjustments and bundling.

How Long Should NDC Integration Take?

The timeline for integrating NDC varies based on airline size, technology infrastructure, and provider. On average:

• Basic API Implementation: 3-6 months for airlines with modern IT stacks.
• Full Integration with Offer/Order Management: 6-12 months, including backend systems like PSS (Passenger Service Systems).
• Enterprise-Level Customization: 12-24 months for large airlines requiring bespoke solutions.

Factors influencing timelines include internal IT capabilities, vendor support, and the complexity of legacy system migration.

Common Challenges & Solutions

Challenge 1: Fragmented Distribution Ecosystem

Issue: Many travel agencies still rely on GDS, creating a hybrid environment where NDC and non-NDC content must coexist.

Solution: Airlines should implement aggregators that bridge GDS and NDC content into a single interface for seamless booking.

Challenge 2: Payment Processing Complexities

Issue: Different regions and vendors have varying payment gateway requirements, leading to inconsistencies.

Solution: Airlines should integrate flexible payment gateways supporting multiple currencies and local preferences while ensuring compliance with fraud prevention standards.

Challenge 3: Travel Seller Adoption Resistance

Issue: Some travel management companies (TMCs) hesitate to adopt NDC due to training and workflow changes.

Solution: Airlines must provide incentives, training, and technical support to ease the transition for travel sellers.

Challenge 4: IT & Legacy System Compatibility

Issue: Airlines operating on older Passenger Service Systems (PSS) struggle to integrate modern NDC platforms.

Solution: Phased migrations with API-layer solutions help airlines gradually transition from legacy systems.

Understanding NDC Providers & How to Choose the Right One

Why NDC Isn't a One-Size-Fits-All Solution

One of the biggest misconceptions about NDC is that it is a uniform solution provided in the same way by different vendors. In reality, NDC implementations can vary significantly based on the provider, airline needs, and integration approach. Airlines and travel sellers must consider:

• How each provider structures NDC capabilities (e.g., some focus on dynamic pricing, while others prioritize content aggregation).
• The role of multiple NDC providers in an airline's distribution strategy (many airlines use more than one vendor to optimize performance across different channels).
• How different solutions interact with existing GDS and Passenger Service Systems (PSS) to create a seamless booking experience.

Selecting One or Multiple NDC Providers

Airlines should assess whether they need a single NDC provider for simplicity or multiple providers to maximize coverage. Key factors include:

• Coverage & Market Reach: Some NDC providers have stronger integrations with certain airlines or geographic markets.
• Cost & Pricing Structure: Understanding whether transaction fees, SaaS models, or revenue-sharing aligns with financial goals.
• Technology Compatibility: Ensuring seamless integration with existing booking platforms and API capabilities.

NDC Market Comparison: Features, Costs, Market Share, and Adoption Timelines

Choosing an NDC solution requires considering pricing, feature sets, and integration complexity. Below is a comparison of leading providers:

Key Takeaways for Selection:

• Budget Considerations: Airlines must assess whether a per-transaction fee or a fixed SaaS model aligns with their revenue structure.
• Customization Needs: Some providers offer plug-and-play solutions, while others require more tailored implementations.
• Scalability & Support: The ability to handle high-volume transactions is critical for major carriers.
• Adoption Roadmap: Airlines should set realistic timelines based on IT resources and vendor collaboration.

Final Thoughts

Mastering NDC requires more than just implementation—it demands strategic optimization of pricing, payments, and partner adoption. While Accelya, Amadeus, Sabre, Travelport, and ORX offer compelling solutions, each comes with distinct advantages depending on an airline’s needs.

For travel sellers, the ability to leverage data-driven ancillary sales, dynamic pricing engines, and seamless payment processing will set them apart in an increasingly competitive landscape. The future of airline retailing is here—now is the time to optimize NDC for maximum impact.