Modern Airline Retailing: Navigating NDC's Impact on Corporate Travel in Australia

The corporate travel industry in Australia is undergoing one of its most significant technology transformations in decades, driven by the roll-out of the New Distribution Capability (NDC). As discussed by industry leaders at FACTS 2025, led by moderator Timmo Rol, this shift is no longer optional; it's a rapidly accelerating reality with profound commercial and operational implications for corporate travel professionals.

NDC: The State of Play and Financial Incentives

The momentum for NDC adoption in the Australian market is substantial, particularly following the introduction of the Qantas New Distribution Model (NDM) in July.

• Accelerated Adoption: Since July, domestic Australian content booked through NDC has reportedly doubled year-on-year, reaching approximately 35% of all bookings, while international content has also seen growth, now at about 21%. One TMC reported its Qantas domestic adoption is as high as 76% to 90% week-to-week, with an overall adoption rate of 72% across domestic and international.

• The Power of 'Carrots and Sticks': Rol’s research shows that airlines using a combination of incentives (carrots) and penalties (sticks) are seeing the highest adoption rates. For example, charging a GDS (Edifact) surcharge and offering better content or dynamic pricing in the NDC channel drives volume.

• Tangible Savings: Global data suggests lower fares in the NDC channel, ranging from 3% to 16.6% globally. In the Australian market, savings between July and October averaged 7.24% on Qantas content. Half of this saving is attributed to avoiding the $11.50 Edifact surcharge, with the remainder coming from genuine lower NDC fares. Navan, a technology-led TMC, reported saving US$215,000 per year just by switching to NDC content.

• Qantas Strategy: Oronzo Miccoli (Qantas head of government and corporate sales) affirmed that the airline's distribution model is set up to incentivise TMCs to move to NDC by offering their best content — surcharge-free — in that channel. This ensures TMCs can continue to deliver the widest range of content to their corporate buyers.

The Commercial and Operational Reality for TMCs

The transition to NDC is forcing a fundamental shift in the Travel Management Company (TMC) commercial model, which traditionally relied heavily on supplier commissions and GDS segment rebates.

1. Investment and Operational Costs

TMCs are incurring significant, tangible costs to facilitate NDC:

• Technology Investment: Major TMCs are making enormous investments to build or adapt their technology stacks to handle NDC content. Amex GBT, for example, invested US$100 million and employed 600 engineers in 2023 for NDC capability, according to Rol.

• Operational Strain: TMCs are experiencing workflow inefficiencies because NDC processes are still less seamless than legacy Edifact systems. One TMC reported bringing on four additional consultants just to manage the lack of parity in workflow efficiency between Edifact and NDC.

• Servicing Gap: A critical challenge remains in post-sale servicing. TMC agents still face long wait times (up to 94 minutes) when calling airline agency support (e.g., Qantas Agency Connect) because the necessary servicing capabilities have not yet been fully delivered to the TMCs' systems.

  
  

The Rise of the NDC Service Fee

As panellist Andre Moten (Connection Travel Group) explained, to offset these increased costs and absorb the thin margins (publicly listed TMCs report net profits of only 1% to 3%), many TMCs are now imposing an NDC service fee or levy on corporate buyers.

TMCs like CT Connections and CTM justify this fee based on the need to recover significant technology investments, tangible operational impacts (e.g., extra staff, manual processes) and the fundamental change in the commercial model, where supplier revenue has diminished.

The Future of Retailing: Capability and Transparency

The long-term vision for NDC, which is now becoming achievable, is to move beyond simple fare distribution to genuine product retailing.

• Enhanced Capabilities: Qantas has more capabilities in its QDP (Qantas Distribution Platform) than it offered in Edifact. While the airline is not yet using dynamic pricing, the platform sets the stage for future retailing.

• Future Value-Adds: The new technology platform enables the development of new bundled products and value-added services, such as a planned B2B sustainability portal for corporate buyers, which could include options for Sustainable Aviation Fuel (SAF).

• Transparency vs. Static Pricing: While pricing will be less static, Qantas maintains that its distribution model, offering a surcharge-free NDC channel and a surcharge-incurring Edifact channel, is transparent. The real long-term benefit for corporate buyers will be the ability to negotiate and customize travel programs with greater precision using these enhanced retailing capabilities.

  
  

Key Takeaways

Andre Moten (CT Connections): Expand Your Search for TMC Partners

Moten advised corporate buyers to be very much aware of the "rise of the mid-sized TMC". He noted that these are brands many buyers don't know, but they have innovative offerings and are being utilized by companies in Australia now. He stressed that if buyers don't expand their search, it could lead to "professional embarrassment" for missing out on key market developments. He urged the audience to "expand your net" and pick up the information available.

Cherie Drummond (CTM): Demand Clarity and Transparency

Drummond emphasised that the single most important takeaway is to "demand clarity and transparency from all your industry partners." She stated that it is only fair to the corporate buyer to be able to ask for the truth, and it is the industry's job to ensure they are presenting the truth across every element of the supply chain.

Oronzo Miccoli (Qantas): Prioritise Tech-Forward Partners

Miccoli highlighted that NDC is just the beginning; it’s merely the “start of airlines playing catch-up of 40 years of technology”. He advised corporate travel professionals to challenge themselves and ask: “Am I working with partners who are tech forward, who are embracing change?" He stressed that the next five years will see a huge amount of change, and a supportive ecosystem is essential for future success.

Timmo Rol (Moderator): Ask the Right Questions & Focus on Value

Rol offered two key points. First, he stressed the need to ask the right questions of your TMC, noting that buyers have far more to consider now than they did a few years ago, including technology, content, service, and the commercial model. Second, he advised that when negotiating with suppliers, buyers should think about more than just price. The focus should be on what delivers value to the program, such as custom bundles, making those "the conversations to have with your supplier".