Since introducing the “Offer-Order-Management” concept with the launch of the New Distribution Capability (NDC) standard in 2015, the International Air Transport Association (IATA) has led the transformation of airline distribution. A decade on, NDC has become a strategic imperative, forming the foundation for Modern Airline Retailing (MAR) through the broader Offer-Order-Settle-Delivery (OOSD) framework.

Despite the momentum, widespread implementation remains limited. While European carriers lead with 41 percent adoption – followed by Asia-Pacific (36 percent) and North America (33 percent) – many airlines are still in the early stages of their NDC journey: Implementation complexity and limited in-house expertise continue to pose barriers.

However, NDC adoption has reached a point of no return. It is the critical first step to fully embracing the OOSD vision. As airlines look to compete in an increasingly dynamic and margin-sensitive environment, NDC’s transformative ability to drive personalized, dynamic retailing is essential for differentiation and unlocking new ancillary revenue streams.

Figure 1: The Transformative Potential of NDC Adoption for Airlines

Getting NDC Right: Key Enablers for a Seamless Transition

Like many transformative technologies, NDC faces implementation challenges, particularly with legacy systems. Key areas leaders must address include:

• Strategic Investments

  Migrating from traditional systems to this new standard demands significant investments in technology, training and infrastructure, making it especially challenging and costly for smaller travel, hospitality and leisure service providers. Middleware solutions play a vital role in seamlessly integrating NDC with existing Passenger Service Systems (PSS), reducing implementation friction.

• Standardization and Interoperability

  With NDC requiring extensive data exchange, cybersecurity and compliance are paramount. Airlines must implement robust data governance frameworks, including secure Application Programming Interfaces (API), end-to-end encryption and adherence to global privacy regulations.

• End-to-end Change Management

  NDC implementation impacts multiple stakeholders across the value chain. Success depends on early identification of affected functions, effective communication and tailored support to drive adoption and ensure long-term value realization.

• Ongoing NDC Service Management

  Beyond initial deployment, NDC demands continuous oversight. This includes agile management across critical areas such as dynamic offer creation and maintenance, rigorous testing of evolving standards, seamless version upgrades, comprehensive seller onboarding and enhanced customer service operations. Establishing a dedicated NDC service team is essential to empower airlines to confidently and efficiently transition into subsequent phases – order management, servicing, settlement, delivery and post-travel engagement – thereby fully embracing the transformative potential of MAR.

NDC is not just a technical upgrade, it is a comprehensive retail transformation requiring end-to-end orchestration – from seamless internal system alignment and third-party platform integration to sophisticated offer management that enables real-time, dynamic retailing. Success demands strategic collaboration with domain specialists, technology innovators and key stakeholders to modernize airline IT ecosystems and operational processes.

Equally important is capacity building. Airlines must equip commercial, IT and customer service teams with the skills and tools to operationalize NDC and unlock new ancillary revenue streams. Investing in comprehensive training programs and role-specific upskilling is essential.

The Role of Domain-led Digital Partners

Trusted NDC-enablement partners bring together deep industry expertise, advanced automation capabilities and proven change management frameworks. These strategic partners provide hands-on support through:

• Expediting the NDC adoption

• Complex version upgrades

• Continuous NDC quality assurance and validation

• Seller onboarding

• Continuous performance monitoring

• Alignment across commercial, IT and distribution functions

• Preparation for upgraded revenue accounting processes

• Preparation for ONE Order, Settlement and Delivery processes

• Delivering flexi-sized NDC / OOSD Center of Excellence (CoE)

By leading NDC enablement, service providers not only accelerate airline retail transformation, they drive innovation and long-term competitive advantage as thought leaders in the evolving travel ecosystem. Success in the disruptive digital era requires a partner who can co-create a smarter business by combining domain excellence with digital ingenuity across both legacy systems and modern NDC / OOSD frameworks.

NDC at Full Throttle: What’s Next?

According to McKinsey, the implementation of better modern airline retailing will generate USD 45 Bn in new revenue by 2030. The question is no longer if airlines will implement NDC, but when and how.

American Airlines, for instance, plans to introduce NDC-exclusive bundled fares and ancillary services. Hawaiian Airlines has adopted a hybrid strategy, including withdrawing certain fares from legacy channels, implementing distribution surcharges and recovering traditional distribution costs. The results are telling: By June 2023, nearly half of Hawaiian’s US third-party bookings flowed through NDC channels – driving mutual value for the airline, its partners and travelers.

Still, challenges remain. NDC concerns include disrupting traditional distribution channels, favoring certain channels, giving larger airlines a competitive advantage, managing complex pricing and dealing with travel agency support. The transition to full-scale NDC adoption – and eventually to the OOSD framework – will take time. Over the next decade, traditional and NDC channels will likely co-exist.

This underscores the need for experienced partners who understand both legacy systems and the NDC ecosystem. Airlines need advisors who can bridge both worlds – offering advisory, implementation and ongoing support services that ensure a seamless, future-focused transition.

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