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From Legacy Systems to Next-Gen: How NDC is Reshaping the Airline Distribution

July 10, 2023

Ever wondered why booking a flight can sometimes feel more complicated than it should be? You search for a ticket, but prices jump unexpectedly, add-ons like baggage or seat selection are unclear, and often, you do not get the best deal.

That is because, for decades, airlines have relied on Global Distribution Systems (GDS) platforms built in the 1960s to distribute their flights. These legacy systems control most flight bookings but come with limitations. Airlines cannot easily customize offers, update pricing in real time, or display rich content like images and videos.

Enter New Distribution Capability (NDC)a modern XML-based data standard developed by IATA (International Air Transport Association) to give airlines more control over ticket sales and offer better deals directly to consumers and travel agencies.

But how does NDC change things? Why are major airlines like Lufthansa, British Airways, and American Airlines shifting to NDC? And what does this mean for travelers and travel agents?

Let us break it down.

Understanding New Distribution Capability (NDC)

What is NDC?

NDC is a communication standard that allows airlines to distribute tickets and services directly to customers and travel agencies, bypassing traditional GDS systems. Instead of airlines having to sell their flights through intermediaries, NDC gives them the ability to sell flights just like an online retailer with personalized pricing, bundled offers, and seamless booking experience.

How is NDC Different from Traditional GDS?

GDS vs NDC Comparison

Feature	Traditional GDS	NDC (New Distribution Capability)
Pricing	Fixed fare structures	Dynamic pricing based on demand
Customization	Limited	Tailored offers based on passenger history
Rich Content	Text-based information	Images, videos, and interactive seat maps
Direct Airline Sales	Mostly through travel agents	Direct connection between airlines & customers
Ancillary Sales	Restricted	Customizable add-ons like Wi-Fi, meals, and baggage

For airlines, this is a game-changer. They can now control how their flights are sold, rather than being at the mercy of GDS platforms.

Why Traditional Airline Distribution Needed a Change

For years, airlines depended on Global Distribution Systems (GDS) like Amadeus, Sabre, and Travelport to distribute their flights. While GDS has been useful in consolidating flight information, it comes with several limitations:

1. High Costs for Airlines

GDS providers charge airlines fees for every ticket sold. This means higher costs for airlines, which often get passed down to travelers in the form of higher ticket prices.

2. Static Pricing & Lack of Personalization

Ever booked a flight and then seen the price change the next day? That is because traditional GDS systems use fixed pricing structures, preventing airlines from adjusting fares dynamically based on demand, seasonality, or customer loyalty status.

3. Limited Ancillary Sales Opportunities

Airlines make billions from ancillary services like seat upgrades, extra baggage, Wi-Fi, and meals. In 2022, ancillary revenue for airlines reached $102.8 billion, but GDS systems do not support advanced bundling or personalized offers.

NDC fixes these issues by allowing airlines to:

Offer dynamic pricing (similar to ride-sharing apps)
Personalize ticket bundles based on customer preferences.
Sell directly to consumers without high intermediary costs.

How NDC is Transforming Airline Distribution

1. Airlines Gain Control Over Pricing & Offers

One of the biggest advantages of NDC is that it allows airlines to control their pricing in real time. Instead of relying on third-party GDS systems, airlines can adjust fares based on demand, market trends, and passenger behavior.

Example:

Imagine you are booking a flight to New York. With GDS, you see a fixed price of $400. With NDC, an airline might offer you a discounted fare of $350 if you have booked with them before or bundle a free baggage allowance for loyalty members.

2. Dynamic Packaging & Personalized Offers

With NDC, airlines can bundle multiple services together, creating a better shopping experience for travelers.

Example of NDC Bundles:

Traditional vs NDC-Powered Offers

Traveler Type	Traditional Ticket	NDC-Powered Offer
Business Traveler	Flight only	Flight + Wi-Fi + Priority Boarding
Family Vacationer	Flight only	Flight + Extra Baggage + Meal Options
Budget Traveler	Flight only	Discounted flight + No luggage option

This makes booking flights feel more like shopping on Amazon, where you can customize your experience instead of selecting from rigid fare classes.

3. Travel Agents Benefit from Better Access to Offers

NDC is not just for airlines it benefits travel agents too. Since airlines can now distribute exclusive NDC fares through partner agencies, those who integrate NDC gain access to better deals than those using traditional GDS systems.

4. Rich Content: Better Visibility for Travelers

Have you ever tried selecting a seat but had no idea what it looked like? With NDC, airlines can display high-quality images, videos, and interactive seat maps, helping customers make better purchasing decisions.

How the Travel Industry is Adapting to NDC

Airlines Adopting NDC

Many major airlines are already using NDC to improve distribution:

Lufthansa: Imposes an extra fee on non-NDC bookings to encourage direct sales.
British Airways: Offers rich content-driven NDC deals for more engaging booking experiences.
American Airlines: Prioritizing NDC to reduce GDS reliance

Challenges in NDC Adoption

While NDC offers huge benefits, adoption isn’t instant. Challenges include:

Technical integration costs for airlines
Travel agencies needing to update their systems.
Resistance from traditional GDS providers

However, as more airlines shift to NDC, the industry is moving toward an NDC-first model.

The Future of Airline Distribution with NDC

1. AI-Powered Personalization

NDC will soon integrate with AI-driven booking platforms, making it possible for airlines to offer hyper-personalized deals based on browsing history and past bookings.

2. Blockchain for Secure Ticketing

Blockchain technology could work alongside NDC to prevent fraud and streamline ticket verification.

3. Mobile-First Airline Bookings

With over 68% of travelers booking flights on mobile, NDC will make it easier to complete bookings, select add-ons, and adjust reservations directly from a smartphone.

Conclusion: Why NDC is the Future of Airline Sales

NDC is revolutionizing airline distribution, making it cheaper, more transparent, and highly personalized. Airlines, travel agencies, and passengers all stand to benefit from dynamic pricing, direct sales, and enhanced booking experience.

As more airlines and travel platforms embrace this modern retailing approach, the industry will see a shift toward a more dynamic, customer-friendly booking process.