Distribution

Strategic Decision: 100% Direct-to-Consumer via NDC

This architecture eliminates GDS reliance entirely, maximizing margin retention and customer data ownership.

The Strategic Shift

┌─────────────────────────────────────────────────────────────────┐
│                                                                 │
│   The 'Old' Way              →        The 'New' Way            │
│   ─────────────                       ─────────────            │
│   ┌─────────┐                         ┌─────────────┐          │
│   │ Legacy  │                         │  Customer   │          │
│   │   GDS   │  ✗ ELIMINATED           │ Smartphone  │          │
│   └─────────┘                         └──────┬──────┘          │
│                                              │                 │
│   • GDS fees: $10-15/booking                 │ NDC            │
│   • No customer ownership                    │                 │
│   • Limited merchandising                    ▼                 │
│                                       ┌─────────────┐          │
│                                       │ Airline Core│          │
│                                       │   (NDC)     │          │
│                                       └─────────────┘          │
│                                                                 │
│   No GDS Reliance = No Margin Leakage                          │
│                                                                 │
└─────────────────────────────────────────────────────────────────┘

Components

NDC Implementation

IATA New Distribution Capability - Primary Distribution Channel:

• NDC 21.3 schema implementation
• ONE Order adoption
• Offer and order management
• Rich content delivery
• AI-driven continuous pricing integration

Direct Channels

Airline-owned distribution - 100% of sales:

• Airline.com website (primary)
• Mobile application (primary)
• B2B API portal (corporate/travel agents)
• Call center (support channel)

GDS Connectivity - NOT APPLICABLE

Strategic Decision: Zero GDS distribution

• No Amadeus, Sabre, or Travelport connectivity
• No EDIFACT messaging required
• No GDS participation fees
• Full margin retention

Metasearch - TRAFFIC ACQUISITION ONLY

Metasearch as advertising channel (redirect model):

• Google Flights (if partnership viable)
• Skyscanner, Kayak for visibility
• Deep links to direct booking
• No booking on metasearch platform

Revenue Architecture

Continuous Pricing

┌─────────────────────────────────────────────────────────────────┐
│                   AI-Driven Continuous Pricing                  │
├─────────────────────────────────────────────────────────────────┤
│                                                                 │
│  Traditional: 26 RBDs (Y, B, M, H, K, L, Q, etc.)              │
│               Static fares filed with ATPCO                     │
│                          ↓                                      │
│  Continuous:  Unlimited price points                            │
│               Real-time demand signals                          │
│               AI-optimized per customer/route/time              │
│                                                                 │
│  Inputs:                        Output:                         │
│  ├── Demand forecast            Optimal price per              │
│  ├── Competitor prices          request, moving                │
│  ├── Time to departure          beyond static                  │
│  ├── Load factor                booking classes                │
│  ├── Customer value                                            │
│  └── Historical patterns                                       │
│                                                                 │
└─────────────────────────────────────────────────────────────────┘

Dynamic Ancillaries

Personalized upselling based on live customer data:

• Seat selection (preferred, extra legroom)
• Baggage (pre-priced by route/customer)
• Priority services
• Bundled offers based on customer profile
• Real-time pricing based on demand

Distribution Strategy

Channel Economics (100% Direct Model)

Total Distribution Cost: ~$2-4 per booking (vs. $10-15 with GDS)

Target Channel Mix

• Web: 50-60%
• Mobile App: 30-40%
• Call Center: 5-10%
• B2B/Corporate API: 5-10%
• GDS: 0% (eliminated)

Key Principles

1. 100% Direct: All bookings through owned channels
2. Mobile-First: Optimize for smartphone booking experience
3. Continuous Pricing: AI-driven dynamic pricing, not static fare classes
4. Data Ownership: Full customer data capture and utilization
5. Margin Protection: Zero intermediary fees

Integration Architecture

                    ┌─────────────────┐
                    │   Offer Engine  │
                    │  + Continuous   │
                    │    Pricing AI   │
                    └────────┬────────┘
                             │
        ┌────────────────────┼────────────────────┐
        │                    │                    │
   ┌────▼────┐         ┌─────▼─────┐        ┌────▼────┐
   │   Web   │         │  Mobile   │        │   B2B   │
   │Booking  │         │    App    │        │   API   │
   └────┬────┘         └─────┬─────┘        └────┬────┘
        │                    │                    │
        └────────────────────┴────────────────────┘
                             │
                    ┌────────▼────────┐
                    │    Customer     │
                    │   (Direct)      │
                    └─────────────────┘

Benefits of 100% Direct Strategy

Financial

• $8-13 savings per booking (no GDS fees)
• Full ancillary revenue capture
• No commission leakage
• Predictable distribution costs

Strategic

• Complete customer data ownership
• Faster time-to-market for pricing changes
• Full control over customer experience
• Direct relationship with travelers

Operational

• Simpler IT architecture (no GDS integration)
• Faster booking confirmation
• Real-time inventory control
• Unified customer view

Risks & Mitigations

Implementation Notes

• Archive gds-connectivity/ folder for reference only
• Metasearch integration is for traffic acquisition, not booking
• All NDC capabilities built for direct channels
• No EDIFACT/GDS message development required