Airline Tech Is Changing The Rules: What OOSD And Modern Retailing Really Mean For Travel Agencies

Author Mark Lenahan.

TL;DR

• Airlines are rebuilding their core systems around Offers and Orders, replacing PNRs, tickets, filed fares and booking classes over the next decade or more.

• This shift, known as Modern Airline Retailing (MAR), aims to copy digital natives like Amazon and Uber, with richer content, dynamic pricing and better servicing across every channel.

• New architectures such as OOSD (Offer, Order, Settle, Deliver) will gradually replace today’s PSS platforms and change how airlines connect to GDSs, aggregators and agencies.

• Agency economics will shift. Legacy GDS segment fees that funded incentives are giving way to NDC and aggregator models where airlines often pay nothing and agencies pay small per-booking fees.

• Key agency workflows will change: less focus on booking classes and filed fares, more on priced offers, continuous pricing, digital identity and richer product information surfaced by APIs and AI.

• This is a long game. Full migration will take at least a decade, but airlines that move first may gain a retailing edge. Agencies that delay risk poorer content, higher costs and weaker relevance to their customers.

1. Why airlines are rebuilding their tech

The airline industry is quietly rewriting its operating system for passengers. Concepts that agencies have lived with for decades, such as PNRs, eTickets, filed fares and booking classes, are likely to fade away over time. It will take years, but the direction of travel is set.

The journey started with IATA’s New Distribution Capability (NDC) in 2013. By 2018, it had expanded into Airline Industry Retailing and is now usually called Modern Airline Retailing (MAR). The core idea is simple to state and hard to deliver. Airline shopping, booking and servicing need to be modernised to match the expectations set by digital native brands like Amazon, Uber, Netflix and the new wave of fintech and neobanks.

Airlines have spent years putting new digital layers on top of legacy systems, formats and processes. That approach is now seen as “lipstick on a pig”. The emerging consensus is that real transformation is needed, affecting airline organisation, processes, technology and distribution. The promised rewards are a better passenger experience, more retail revenue and more flexibility to change products and partnerships. McKinsey has estimated a 45 billion dollar annual revenue opportunity by 2030.

Whether you are sceptical or not, a clear majority of airline leadership believes in this vision and is investing in it. The debate inside airlines is no longer if, but how and how fast. The question for travel agencies is what this means for your content, economics and customer value over the next decade.

2. The building blocks: NDC, Offers, Orders and OOSD

Modern airline retailing spans many initiatives, but a few components really matter for agencies.

NDC: from fares and availability to offers

NDC is a standard API for indirect distribution. Instead of separate flows for schedules, availability and filed fares, NDC returns ready-to-sell “Offers” priced for a specific request. Those offers can be displayed to a traveller and converted into a booking. NDC is explicitly for agencies, TMCs, OTAs, aggregators and booking tools, not for direct web sales.

One Order and the Offer & Order pattern

One Order is a new data structure for a flight reservation, essentially a booked offer. It describes everything needed to service and fulfil the trip. Over time it will replace PNRs and eTickets, although today most implementations mirror those legacy objects inside the Order.

Offer & Order is the broader design pattern, borrowed from general eCommerce. Offers are priced product propositions wherever you see them, for example search results, wish lists and baskets. Orders are what you get when the customer checks out and pays. If you use Amazon you already live in an Offer & Order world.

OMS, OOMS and the role of PSS

Most airlines use a Passenger Service System (PSS) as the back end for availability, pricing and booking, both for their own websites and for NDC. Sitting above that, an Offer Management System (OMS) handles shopping, pricing and bundling ancillaries. An Offer & Order Management System (OOMS) adds servicing, payment and accounting for orders.

Today, these systems still rely on the PSS and legacy concepts like PNRs and tickets behind the scenes. Over time, the aim is for Orders to become the single source of truth.

OOSD: Offer, Order, Settle, Deliver

OOSD is the proposed long-term replacement for the traditional PSS. It covers:

• Offer and Order management without PNRs or tickets

• A product catalogue and stockkeeping (inventory)

• Offer optimisation and pricing, including revenue management

• Delivery of the order, such as what departure control systems do today

• Accounting for orders

Because the rest of the world still speaks PNR and ticket, many OOSD platforms will use translation layers to work with other airlines, airports, BSPs and partners that have not yet migrated. Air Riyadh is an early illustration of this model, built largely on an OOSD stack from Flyr and others, using a translation layer to connect to legacy partners.

3. Follow the money: why airlines are pushing change

Airlines are not doing this to make life easier for agencies. Their primary motivation is commercial. They expect to sell more, cross-sell more, and create stronger long-term loyalty by offering a better experience.

Early on, some argued that offers and orders would allow airlines to replace bespoke airline software with generic CRM and ERP tools and therefore cut technology costs. In practice that turns out to be limited. The data and processes in airline retailing are too specific. There has been some success replacing Passenger Revenue Accounting with more generic tools, but that is the exception, not the rule.

At recent industry events, including T2RL Engage, the consensus has shifted. OOSD will probably cost more to run than a legacy PSS. On top of that, the transformation itself requires heavy upfront spending. CTOs and CFOs are weighing whether to invest now and seek a first mover advantage or wait until the technology matures and becomes cheaper, risking a widening gap to their most advanced competitors.

The expected benefits are:

• Clearer communication of products and services at booking and during travel

• Easier changes and servicing for customers and staff

• Cheaper, more flexible payment options

• More scope to bundle flights with financial products, insurance, media and other modes of transport

• Consistent customer service across airport, call centre, chat and digital self-service

• Making airline products easier for AI platforms and personal AI agents to discover, compare and book

The hardest benefit to quantify is flexibility. Once airlines are no longer constrained by the data limits of PNRs, tickets and filed fares, they believe they will innovate faster in ways that are hard to predict today.

4. Agency economics under pressure

Is this bad for travel agents It depends which airline you ask and how they really view their distribution partners? There are clear risks and some opportunities.

For roughly 25 years, airlines have been reducing their reliance on intermediaries. The internet made large scale direct selling possible. Distribution costs, from base commissions through to GDS segment fees, have been squeezed using surcharges and content differentiation.

From the airline perspective, direct is attractive. They can present their products exactly as they wish, save on distribution costs and harvest first-party data to drive loyalty and lifetime value. Even when customers book via agencies or corporate tools, the airline still wants a direct relationship anchored in identity, often via frequent flyer numbers.

In the legacy GDS model, airlines pay an average segment fee of around 6 dollars, sometimes as low as 1 or as high as 25 dollars. The GDS then shares part of this with the agency as incentives or financial assistance.

In the emerging NDC and low cost aggregator model, exemplified by players such as Travelfusion, AirGateway, Verteil, Kyte and Mystifly, the airline may pay nothing and the agency pays a small booking fee, commonly 1 to 2 dollars. That is a simplified picture and there are exceptions, but the direction is clear. Agencies shift from being paid per segment to paying.

You can argue that this feels unfair. Airlines are using the essential nature and scarcity of their product, plus the complexity of distribution, to reset the commercial model. Agencies need a strategy to protect margin, prove their value and use richer retailing content to justify their service fees.

5. Has NDC failed or just gone quiet?

Some in the agency community see NDC as a failure, or at least a disappointment. Volumes are still a minority of indirect distribution, with a small number of European airlines approaching 50 percent. It has taken much longer than promised and most carriers are nowhere near switching off legacy channels.

From the airline side there is little sign of retreat. NDC is rolled into the wider Modern Airline Retailing agenda and airlines continue to use surcharges and differentiated content to steer adoption. The aircraft may still be on the runway, but it has passed the point where it can safely abort take-off.

If NDC seems less visible at conferences, that is mainly because the argument is settled and because AI dominates the agenda. For agencies, this is a risky moment to be complacent. The connectivity you rely on today may not match the content, pricing and servicing the airline wants to prioritise tomorrow.

6. What will change for agencies in practice

Even if you already consume some NDC content, the next phase of modern airline retailing will force deeper changes in workflows, tooling and staff skills.

You should expect:

• Digital first content and offers Some special prices and bundles will only be available through NDC or airline web and mobile channels. Airlines will move pricing so that NDC is always cheaper or at least in line with legacy GDS. Over time, legacy booking will simply be withdrawn.

• Channel and seller level price control Full content agreements with GDSs will decline. Airlines will use product and price discrimination by channel, seller and customer type.

• Stronger focus on identity and contacts Airlines will push for accurate customer identity and contact data in every booking. Order numbers are long and complex, and are expected to be tied to identity rather than used the way PNR locators are today.

• Continuous and dynamic pricing Prices will move away from discrete filed fares towards continuous price points that change in 1 or 5 cent increments. Filed fares may still exist inside airline systems, but what agencies and travellers see will be priced offers, not fare ladders.

• Less visibility of availability and booking classes Traditional availability screens showing RBDs and seats left are already an abstraction from the real inventory. In future, you will request priced offers rather than browse booking classes. RBDs may survive as internal product tags, but the OOSD model does not rely on them in the same way.

• Different handling of corporate and negotiated deals Private and negotiated fares will still exist, but will be unlocked via the agency or customer identity passed at search time, similar to how many corporate car hire deals work today.

• New approaches to book and hold In an Order world, the offer has a time limit and the booking itself is the contract. That challenges agency workflows based on booking without ticketing or holding multiple options while clients decide. NDC contains mechanisms for agency friendly holds, but they will not look or behave exactly like today’s processes.

If your NDC architecture depends heavily on legacy codes exposed inside NDC messages, such as PNRs, fare basis codes and ticket numbers, it may not be future proof. As airlines move further into OOSD, many of those fields will disappear or become unreliable. Integrations need to be built around offers and orders as first class citizens.

7. Timelines and what agencies should do now

William Gibson’s line that “the future is already here, it is just not very evenly distributed” fits Modern Airline Retailing well. Riyadh Air is already operating using an OOSD platform and translation layers others are still running heavily customised legacy PSSs with only pilot NDC programmes.

For most airlines, a full migration to OOSD is at least ten years away. There will be a long period where early adopters must maintain backward compatibility with slower movers. Eventually, though, the cost of keeping two worlds alive will become too high and the long tail will be cut off, very much like the final stages of the eTicket migration.

For agencies, the key is to treat this not as a one-off project, but as an ongoing digital transformation of airline retailing. Moving to Offers and Orders is not the finish line, it is the start line for a faster pace of change. Content, workflows and customer expectations will continue to evolve.

Practical steps for travel agencies and TMCs:

1. Audit your dependency on legacy artefacts such as PNR locators, fare basis codes and booking classes across your mid and back office.

2. Engage proactively with your key airline and technology partners about their NDC, One Order and OOSD roadmaps, and how they plan to support agency workflows.

3. Invest in staff education on Offers and Orders, continuous pricing and new servicing models, so consultants can explain value to customers with confidence.

4. Strengthen your own retail story use richer content, ancillaries and service to justify your fees as incentives decline.

5. Work through membership communities and industry bodies such as TTI to share experience, influence standards and learn from peers on similar journeys.

Modern airline retailing will not remove the need for intermediaries, but it will change which agencies thrive. Those that understand offers and orders, embrace new economics and lean into better digital and AI powered servicing will have a far stronger story for their customers than those that cling to the comfort of PNRs and filed fares.