Month: July 2024

NDC – Challenges in Adoption and Growth


New Distribution Capability (NDC) has been around for a while. We have written many blogs, whitepapers, and other articles on the topic over the past years. However even today, airlines are challenged with certain aspects of the implementation and adoption. In our view, airlines fall into one of the following five categories:

  1. All-in – These airlines have implemented NDC with a holistic distribution strategy. They had (or still have) an approach which drove volumes because they either had clear incentivisation for NDC, or disincentivised the GDS EDIFACT channel. However, they did this in a planned manner and could successfully grow their NDC adoption to 30%, 50% or even more of indirect distribution. This NDC volume shift could be with or without GDS NDC distribution depending on the airline. Based on public information, we would include airlines such as the Lufthansa Group and Copa in this category.
  2. Getting there – These airlines implemented NDC with a good intent, however either not with the right strategy, potentially lacking incentive, and capabilities (e.g., lack of servicing capability) without the right internal “drive”, or with the wrong timing. Their NDC adoption is mediocre, and many of these airlines are now looking for a boost by implementing NDC via the GDS – many times with a suboptimal commercial or content model.
  3. What went wrong? – This category represents airlines which implemented NDC without a solid plan. Often, this was looked at as a technology project, or “just something we need to do”. However, it was not tied to an overall distribution and channel strategy, nor was it widely supported throughout the organization. Some of these airlines have had NDC for 5 years or more and are still in the low single-digit percentages of channel shift.
  4. Just starting – There are many airlines just starting with NDC. Recent announcements include Turkish Airlines, Korean Airlines and Delta Air Lines. They have the chance to do things right by benefitting from the learnings and mistakes others made (if they are willing to). The models and processes are better known, the NDC APIs are more mature, and it should be clear to the airlines what the agency community likes and dislikes. In theory, these airlines have a great chance of “getting it right”.
  5. Oh that… – Yes, there are still airlines who are not yet invested or even thinking about NDC. And that is ok. These airlines have other priorities right now. They will adopt NDC naturally in many cases once it is the more common technology at the GDS – which, by the way, none of the GDSs dispute will be the case over time.

From doing many NDC audits for airlines of all sizes and regions, we have learned that airlines do the following things very right, or wrong – wrong also meaning perhaps not at all due to the lack of realisation of the importance, lack of time, lack of resources or other reasons.

  1. Distribution strategy – A solid, future-proof distribution strategy is of the essence. This must consider the direct and indirect channels, GDS contracts and the overall system and solution landscape. Optimally, they will define a path towards their optimal target state of distribution, identify hurdles and risks and clearly understand the distribution model and its cost implications. We have worked with many airlines creating these strategies, and one of the main challenges we often see is that the airline distribution team only does this type of work every few years and negotiates with GDS and PSS vendors even less. Thus, the understanding of the airline’s distribution contracts is challenging. Even for us, doing this on a daily basis, it is often complex to understand the intricacies of these contracts and recognise the consequences of certain decisions made during the strategy phase.
  2. Plan the growth – Create a target list by market, and optimally, follow the TAM/SAM/SOM methodology to correctly identify and qualify the potential sellers and seller types by market. Clearly assess your current (or planned) NDC solution to ensure it meets the functional capabilities as required / requested by the sellers. Educate the sales team and other parts of the organisation to ensure there is a good understanding of NDC basics, but also more complex topics such as incentivisation, connection methods, available content, etc. Equip the sales and account teams with confidence and with the information they need to go to the trade. Identify and work with the right aggregators to support the growth.
  3. Prepare for adoption – This step includes more training, defining internal and external processes (and optimising them), monitoring and measuring the traffic and volumes, and managing communication. Let’s take that apart a bit more. Before we do, we’d like to suggest that airlines create what we refer to as an NDC Adoption Playbook. A document which is accessible to anyone in the airline implementing NDC. This should include the documentation to the topics outlined below and updated constantly to be the single go-to reference for airline employees. This should be developed and maintained by the NDC core team with support from sales, the product team(s), operational support, and technology.
    • Training – Helpdesk and support – both technical and business support – require training to understand new and changed processes. A travel agent may call with a problem but not know if this is a technical issue or a functional issue. This must be identified and then handled accordingly.
    • Processes – Define the actual support process and flow – where and how is the problem ticket managed, who communicates to whom, and how. Or the implementation processes – the more standardised these are, the more efficient the implementations will be. There are other processes which are key and must be defined, documented, and understood across the affected parts of the organisation. Furthermore, taking the time to optimise these processes allows for more efficient scaling.
    • Monitoring and measuring traffic and volumes – Ensure that the operations team knows what is going on from a technical perspective. Are we responding fast enough to the queries, are there an unusual amount of error responses, is the system being swamped with “useless” requests. On the functional side, how are the sales volumes and values, are we reaching our targets, is there an increase in wallet share, a shift of channel or an increase in sales – or whatever the defined KPIs are. This is also how you can evaluate the efficiency and adoption rate of new products, or new decisions taken in your distribution strategy.
    • Communication – Both internal and external communication are, in our experience, often not done well or the importance of it underestimated. We urge airlines to develop a communications plan to keep the trade informed of changes, new functionality, and operational issues.


In a recent customer engagement, we interviewed travel agents on an airline’s behalf. One of the biggest complaints was the lack of communication from the airline to the agencies. This included both information and communication on roadmap, functionalities, and changes as well as communication about operational status or problems which had (or had not) been fixed.



What is my next step?

If you have identified yourself with one of the airline types above, you may be thinking “what should I do next?”. The answer, as is often the case, is “it depends”. However, we would recommend you do a quick step-check. Do you have “1. Distribution Strategy” covered and understood perfectly, and a path towards the distribution model which suits you? If not, start by defining it, as without this, your efforts to grow NDC may be futile. Then, step 2: do you have your plan for growth? Does it paint a clear picture of the actions you need to take and the KPIs which define success? If not, you should take this as the focus for your next discussions. If that plan is clear, then take a stab at step 3 and create your NDC Adoption Playbook. We have developed several of these with airlines, and the value of this single NDC data and process repository is not to be underestimated.

If you feel prepared and have completed the steps above, then there should be nothing in the way of success and growth.

This post has been published in collaboration with Terrapinn.

Daniel Friedli, Travel in Motion AG

[i] TAM = Total Addressable Market / SAM = Sales Addressable Market / SOM = Sales Obtainable Market