If you recall, we explored the potential of NDC (New Distribution Capability) in an earlier post on April 28 (https://www.anjunagsa.com/post/what-is-ndc-in-airlines), highlighting the transformative impact it could have on airline distribution.
Fast forward to today, and the industry is proving these predictions right.
The airline distribution landscape is changing rapidly, with recent high-profile shifts underscoring a movement that has become impossible to ignore.
As airlines increasingly abandon traditional Global Distribution Systems (GDS) in favor of direct, NDC-based connections, it’s clear that a new era is unfolding in airline booking and distribution.The essence of this transition? Control.
For years, airlines have relied on GDSs like Sabre, Amadeus, and Travelport to distribute their fares to travel agencies, corporate clients, and travelers.
However, GDS systems come with high fees, limited flexibility, and restrictions on how airlines can present and price their offerings. Now, as airlines prioritize direct connections and cost-efficiency, NDC is emerging as the natural successor—putting the power of pricing, personalization, and content control back in the airlines’ hands.
Let’s break down why airlines are embracing NDC, the impact of recent developments, and what this means for the future of airline distribution.
The Power Shift: Airlines Take Control
For decades, GDSs have been the gatekeepers of airline distribution, acting as the bridge between airlines and travel agencies, corporate clients, and booking platforms.
But now, with the rise of NDC, airlines are looking to reclaim control over their content and distribution channels.
Unlike traditional GDS systems, which are often limited by outdated technology and costly fees, NDC allows airlines to connect directly with travel sellers, cutting down on third-party costs and allowing for more dynamic, tailored offerings.
For airlines, this shift means more control over pricing, product bundling, and distribution strategy—something that’s critical as the travel landscape grows more competitive.
With NDC, airlines can showcase rich content, like seat maps, baggage options, onboard amenities, and personalized packages, directly to customers.
This is a game-changer in an industry where personalization is increasingly key to capturing and retaining customers.
As more airlines make the leap, the power dynamic is shifting.
Airlines no longer need to rely solely on GDS platforms to reach their customers and can instead drive a more direct, cost-efficient distribution model.
Frontier and Turkish Airlines: Early Adopters in a New Wave
This shift to NDC is no longer theoretical, it’s happening now, with major airlines leading the way.
Recent decisions by Frontier Airlines and Turkish Airlines to leave Sabre demonstrate that the trend toward NDC is accelerating.
Frontier exited the GDS on September 30, 2024 while Turkish Airlines, one of the largest carriers globally, ended its participation on September 1st, 2024.
Both airlines opted for an NDC-first approach, making their content accessible through direct and other modern channels, effectively bypassing the traditional GDS.
What’s driving these moves? Cost savings and flexibility.
Low-cost carriers like Frontier, in particular, are well-suited to an NDC-based model, as they operate on thin margins and need to keep distribution costs as low as possible.
By eliminating GDS fees, they can pass some savings onto customers while retaining more control over their pricing strategy.
Turkish Airlines, meanwhile, introduced TKConnect, a proprietary platform for direct bookings.
This transition allows them to avoid GDS fees while offering their fares and ancillaries to travel agents and corporate clients in a more streamlined, cost-effective way.
These exits were swift, with announcements coming just weeks before the terminations took effect—underscoring the urgency with which airlines are making the shift.
The Case for NDC: Why Airlines Are Moving On?
The appeal of NDC lies in its potential to provide better customer experiences, reduced costs, and greater content flexibility. Here’s why NDC is becoming the preferred choice for many airlines:
Reduced Costs: Traditional GDS fees can account for up to 25% of ticket prices, a burden that’s particularly hard on low-cost carriers. By adopting NDC, airlines can minimize third-party expenses and allocate resources more strategically.
Enhanced Personalization: NDC enables airlines to offer personalized packages, tailored pricing, and bundled products based on customer preferences and behavior—something that legacy GDS struggle to support. From extra baggage options to in-flight meals, NDC lets airlines provide a richer, more personalized booking experience.
Direct Content Control: NDC empowers airlines to control their own inventory, bypassing third-party restrictions on fare classes, seat maps, and ancillaries. This freedom enables airlines to craft unique offers, adjust pricing dynamically, and provide timely promotions, creating a more engaging and responsive customer experience.
This combination of control, flexibility, and cost savings makes NDC the clear choice for airlines seeking a competitive edge.
Challenges for TMCs and GDSs: Adapting to a New Normal
While NDC is poised to replace GDSs in many respects, the transition is not without challenges—particularly for Travel Management Companies (TMCs) and corporate travel managers who rely heavily on GDS systems for booking. Here’s how they’re adapting to the shift:
Multi-Source Distribution Strategies: TMCs are beginning to adopt multi-source strategies to access airline content. By connecting to multiple providers, including GDS, NDC channels, and aggregators, TMCs can ensure they have uninterrupted access to a broad range of content, minimizing disruptions when an airline exits a GDS.
Operational Adjustments: Managing bookings across multiple channels can add complexity, requiring TMCs to invest in new technology and training. For TMCs, this may mean adopting more self-service capabilities or integrating artificial intelligence to handle routine tasks, which helps streamline operations.
User Experience and Cost Considerations: The shift to NDC also introduces new opportunities for cost savings, as prices may vary across different channels. For instance, fares available through NDC connections might be cheaper than those listed on GDS systems, allowing TMCs to select the most economical options for their clients.
These adaptations show that while the shift to NDC presents initial hurdles, the long-term benefits for TMCs and their clients may ultimately outweigh the challenges.
The Future of Airline Distribution: A Post-GDS World?
As airlines embrace NDC, the GDS model faces an uncertain future.
The recent moves by Frontier, Turkish Airlines, and other carriers suggest a larger industry shift away from GDS dependency. While some legacy GDS systems are evolving to integrate NDC, their role as the primary distribution channel for airlines appears to be waning.
Looking ahead, airlines will likely continue to gravitate toward NDC as a more agile, customer-focused solution, with GDS potentially transitioning to a supporting role in the industry.
This means a booking experience that’s more akin to a retail transaction—one that emphasizes customer choice, transparency, and flexibility.
For travelers, this shift could bring more options, competitive prices, and even exclusive offers, as airlines gain the flexibility to create targeted promotions and real-time price adjustments.
As more carriers adopt NDC, we can expect a more dynamic and consumer-centric approach to air travel.
A New Dawn in Airline Distribution with NDC’s Transformative Potential
The era of GDS dominance is coming to a close, and NDC is swiftly taking its place as the future of airline distribution.
Airlines are no longer willing to bear the costs and limitations imposed by legacy systems, opting instead for direct, flexible, and efficient NDC connections.
As we predicted, the industry is shifting toward a more direct model, giving airlines and travelers alike a broader, richer, and more customizable travel experience.
While there are challenges along the way, particularly for TMCs and corporate travel programs, the benefits of NDC—cost savings, personalization, and content control—make it clear why this transition is happening.
In a world where flexibility and customer engagement drive success, NDC is not just an option for airlines; it’s the way forward.
For more information feel free to reach out to Anjuna Airline Solutions https://www.anjunagsa.com/services
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