Lufthansa's Toll: 23 Euros, 8 Euros, or Zero

Eric Marketts

Lufthansa Group charges you eight euros to book through NDC. The channel that was supposed to make distribution free.

Steph Nell

Hold that number. Then hold the other two, because there are three.

Eric Marketts

Three?

Steph Nell

Twenty-three euros if you book it through Travelport the old way, on the legacy plumbing. Eight euros for the same seat if you take Lufthansa's NDC content through Travelport. Or Amadeus. Or Sabre. And zero. Nothing. No charge at all, if you arrive through almost any other door.

Eric Marketts

Hold on. You just said Travelport twice, at two different prices.

Steph Nell

Twice. Same company, two roads. Twenty-three euros to reach Lufthansa over the old messaging standard, eight to reach the identical seat over NDC. What is being priced is not who you are. It is the road.

Eric Marketts

Three prices, then.

Steph Nell

Three prices, same seat, same airline, same week. And every number this industry quotes about NDC adoption counts all three of them as the same thing.

Eric Marketts

Welcome back to The V1 Airline Retailing Report. I'm Eric Marketts.

Steph Nell

And I'm Steph Nell. Last week we argued that airlines adopt NDC when their product gets complicated enough to require it. This week Lufthansa Group published what that channel actually costs, and two corporate travel platforms spent four days engineering their way around the price list.

Eric Marketts

For anyone new, here is what we do. Every Monday we take the developments that actually move airline and travel distribution and run each one through the bull case, the bear case, and the critical take. Not the press release. The strategic read. Sources are in the episode details.

Eric Marketts

Narrative one. Lufthansa Group's distribution price list, and what the tiers on it actually mean.

Steph Nell

Narrative two. Singapore Airlines onboarded two corporate travel platforms to direct NDC connections in four days. Navan on August tenth, Spotnana on the thirteenth. The aggregation layer lost the same customer twice in one week. And then the harder question underneath it, which is whether any of this survives A-I agents.

Eric Marketts

Two this week rather than three, because the first one turned out to have a great deal more in it than we thought.

Steph Nell

It did. And the through-line took me most of the week to see. Both of these are numbers that describe something that does not exist. There is no single NDC adoption figure, because Lufthansa sells two NDCs at different prices with different catalogues and every chart adds them together. And there is no verified seventy percent at Singapore Airlines, there is a vendor claim with no denominator. This industry is running several realities at once and quoting them as one, and most of them are built on wishes rather than data.

Eric Marketts

Let's get into it.

Eric Marketts

Before the news, set the table properly, because the whole story depends on a distinction we have been assuming. There are two roads from an airline to a seller. What are they?

Steph Nell

EDIFACT and NDC. EDIFACT is the old one, and it is not an airline invention or a G-D-S invention. It is a United Nations messaging standard from the 1980s. The airline files its fares and schedules centrally, and the intermediary assembles and sells from that filing. The airline hands over the ingredients. Somebody else makes the meal. And the vocabulary is fixed, so you can express a fare and a flight and very little else.

Eric Marketts

And NDC.

Steph Nell

IATA's standard, from 2012. The airline builds the offer itself and pushes it out whole. The seller asks, the airline answers with a priced offer of its own construction. Seat, bag, bundle, boarding, together. That is the difference. Not a better pipe. A different party doing the assembly.

Eric Marketts

And here is the thing I want to make sure everyone has, because it is where this story lives. Both roads run through the same companies.

Steph Nell

Both roads run through the same companies. Amadeus, Sabre and Travelport each carry EDIFACT traffic and NDC traffic. They are not the old world. They are intermediaries operating on both standards. So when you hear that Lufthansa charges twenty-three euros through Travelport and eight euros through Travelport, that is not a contradiction. One company, two roads, two prices.

Eric Marketts

Now the charge itself. What is a Distribution Cost Charge, and why does Lufthansa Group get credit for inventing it?

Steph Nell

In June 2015, Lufthansa announced that from September of that year, every ticket booked through a G-D-S would carry a sixteen-euro surcharge, the Distribution Cost Charge. Not the first attempt: Northwest tried a seven-dollar-fifty G-D-S fee in 2004 and folded inside two days. Lufthansa was first to make one stick. The logic was honest. That channel costs the airline real money per transaction, its own website costs almost nothing, so it stopped hiding the difference. I-A-G followed in November 2017, Air France-KLM in April 2018.

Eric Marketts

And how is it actually collected? Because I think most people picture it as a line item on an invoice somewhere.

Steph Nell

It is on the ticket. A fixed amount per ticket, no variation by region or fare. On EDIFACT it is collected as a Y-R tax; through the public NDC channel it is a carrier ticketing fee, an O-B-T. And the detail almost nobody models: it applies to the original ticket only. First issues. No D-C-C on a reissue.

Eric Marketts

So it is a tax on new business specifically.

Steph Nell

It is a tax on new business specifically. Hold that, because it comes back in the bear case.

Eric Marketts

Lufthansa Group ran two coordinated increases this year, and these are all EDIFACT numbers, the legacy channel. Version six of the D-C-C guideline, effective January first, took Amadeus from seventeen-fifty to eighteen euros and Sabre from twenty-two to twenty-two-fifty. And here is where most of the coverage went wrong, so read the actual document. Travelport did not move. Travelport has been twenty-three euros since September 2022. Its 2026 increase was in dollars only, twenty-five to twenty-six-fifty.

Steph Nell

Good. That distinction matters for the take.

Eric Marketts

Then version seven, effective May fifth, took Amadeus to nineteen euros across Austrian, Brussels Airlines, Lufthansa, SWISS, and Air Dolomiti. Sabre and Travelport unchanged. Now switch roads. On the NDC side, the Public Model has sat at eight euros through all of it, and it is the same eight through all three of those same companies. The Travelport that costs twenty-three euros on EDIFACT costs eight on NDC. Unchanged since at least January 2025.

Steph Nell

And the fourth number, which is the one the coverage skipped entirely. Lufthansa Group also publishes an NDC Bilateral Model. The guideline's own words: provides access to the NDC Smart Offer of Lufthansa Group with zero D-C-C.

Eric Marketts

Stop there, because I think most people hear bilateral and assume it means a big private deal between the airline and somebody enormous. Explain the two models properly.

Steph Nell

Worth doing carefully, because the names mislead. Lufthansa publishes two ways to reach its NDC content. The Public Model, in the guideline's exact words, is available through G-D-S NDC aggregators only. Amadeus, Sabre, Travelport. That is the eight euros. The Bilateral Model is everything else: a direct A-P-I connection, or Lufthansa's own free web booking tool called SPRK, or any of more than a hundred certified independent technology providers. That is the zero.

Eric Marketts

So bilateral does not mean you built your own pipe.

Steph Nell

It does not, and I assumed it did before I read the terms. No engineers, no volume. Lufthansa's conditions say the contract comes into effect when you register on its NDC Partner Program website. An agency with an IATA number signs up and uses SPRK for nothing. No threshold, no minimum, no approval process.

Eric Marketts

Is the content the same on both sides?

Steph Nell

No, and this is the part that matters. The two models get different catalogues and Lufthansa publishes the difference. Bilateral gets what it calls the Smart Offer. Public gets the Base Offer. Missing from the Base Offer: Economy Basic, Economy Light, Business Comfort, Green Fares, intercontinental Light fares, preferential pricing on the first bag and on seat reservation. Group bookings are not available in the Public Model at all. Lufthansa's own words on price: the lowest fares are available when booking via an NDC channel, bilateral model. And bilateral is worldwide. Public is, their phrase, available in selected markets.

Eric Marketts

One housekeeping note before the analysis. Trade coverage paired the May fifth increase with ITA Airways joining Lufthansa Group's NDC platforms, because both happened that day. ITA is not a D-C-C carrier. Same date, different thing.

Steph Nell

And one piece of context that makes the bull case, because it is easy to be cynical about a surcharge. Roughly half of Lufthansa Group's indirect bookings now flow through NDC. Compare that to A-R-C's number for the U-S, where NDC was twenty-one point two percent of settled transactions in December. About a fifth. And more than three-quarters of Lufthansa Group's bookings, direct and indirect together, now happen outside EDIFACT entirely.

Eric Marketts

So give me the bull case, and be fair to it.

Steph Nell

The D-C-C works, and a decade of data says so. A per-ticket price signal moves volume off legacy plumbing faster than any technical mandate ever has. No cutover deadline, no content withdrawal, no fight with the agency community about access. Just a number on a ticket that makes the expensive channel visibly expensive. Half the group's indirect volume on NDC against a fifth of U-S agency transactions is not a marketing claim, it is the outcome of a pricing decision, and every carrier that ran a decade of NDC evangelism with no price attached should look at that and be uncomfortable.

Eric Marketts

And where does it break down?

Steph Nell

A surcharge is a tax, and taxes get passed through or routed around. Corporate buyers with negotiated content treat the D-C-C as a line item to claw back at the next R-F-P. T-M-Cs absorb it and resent it. And the agencies whose technology cannot consume NDC cleanly keep booking the legacy way and eat nineteen or twenty-three euros a ticket, because the alternative is a development budget they do not have. The lever moves the willing and taxes the stuck. And because it hits first issues only, it falls on new bookings and not at all on servicing, so the agency writing new tickets pays more than the one managing an existing book. That is backwards from anything an airline says it wants.

Eric Marketts

Give me the critical take. And I do not think it is the obvious one about relocating the tollbooth.

Steph Nell

It is not. Look at what these three prices actually sort on. Not your size. Not your technology. Not even whether you use an intermediary, because you can be bilateral through an aggregator. They sort on which intermediary. Twenty-three to reach Lufthansa through Travelport on EDIFACT. Eight to reach its NDC through Amadeus, Sabre or Travelport. Zero through anybody else, including a hundred-plus independent providers doing the same technical job.

Eric Marketts

Then let me push on the eight, because there is an obvious objection. Is that not the G-D-S recovering its own cost, and probably making money on top, by embedding an aggregation fee in the booking?

Steph Nell

That is the right challenge, the answer is yes, and it makes the story better. Follow the money. Lufthansa collects the eight euros on the ticket, as a carrier ticketing fee, so the traveller pays it. Lufthansa uses it to offset what the G-D-S charges Lufthansa for that NDC booking. Amadeus has told its own investors it expects to make as much per NDC booking as on EDIFACT, if not more. And Travelport says on its own site that G-D-S incentives and overrides still apply to NDC bookings, so part of it goes back out to the agency.

Eric Marketts

Trace the whole chain, then.

Steph Nell

The traveller pays eight euros. The airline passes it to the G-D-S. The G-D-S keeps a margin and rebates some of it to the seller as an incentive. On the standard that was sold to this industry for a decade as the thing that would remove the intermediary.

Eric Marketts

And the structural proof it is about the G-D-S specifically.

Steph Nell

Is in the rate card. Bilateral is zero, and bilateral includes independent certified aggregators. Same standard, same messages, same technical job. So a middleman is not the trigger. A particular kind of middleman is. And the reason is clean: the independents charge the seller. Duffel publishes its rate card, three dollars an order plus one percent, billed to the seller. The G-D-S charges the airline, and the airline passes its side to the traveller.

Eric Marketts

What can we not say?

Steph Nell

How much. No G-D-S publishes an NDC transaction fee, and Lufthansa has never said what the eight is for. I read three versions of the guideline; there is no rationale in any of them. The one carrier that has said it out loud is Air France-KLM, which calls its version an aggregator surcharge covering the cost of using G-D-S aggregators. And here is the tell that the eight is not a precise cost mirror: the EDIFACT charge is differentiated, nineteen, twenty-two-fifty, twenty-three, and Lufthansa says that is to reflect G-D-S cost accurately. The NDC charge is a flat eight across all three. A blended number doing two jobs, recovering cost and steering volume.

Eric Marketts

So what is the take?

Steph Nell

That the fee is the smaller half anyway. The bigger half is the catalogue. Lufthansa built a deliberately inferior version of its own content and the only way to get it is to arrive through a G-D-S. No Economy Basic, no Light, no group bookings at all. Cost recovery explains a charge. It does not explain removing group bookings. And whichever half you look at, it lands in the same place. On the ticket. The traveller funds the intermediary's margin and the seller's incentive, on the standard that was supposed to disintermediate both.

Eric Marketts

The obvious pushback is that airlines have always priced by channel.

Steph Nell

They always have, and I concede that properly. Commissions, overrides, private fares, direct-only promotions. None of this is new in kind. What is new in degree is that the gap is now large enough and public enough to change routing decisions rather than just margins. And that the adoption scoreboard cannot see any of it.

Eric Marketts

Explain that.

Steph Nell

When A-R-C reports twenty-one point two percent of settled transactions on NDC, or Lufthansa says half its indirect volume is NDC, those numbers count a Public Model booking and a Bilateral Model booking as the same thing. They are not the same thing. Different price, different catalogue, different market coverage, and the airline itself gives them different names. So the single most-quoted metric in this industry is aggregating two products the airline separates by name, by price and by content. Everybody is measuring NDC adoption. Nobody is measuring which NDC.

Eric Marketts

And the implication.

Steph Nell

If the cheap fares and the full catalogue liv on the bilateral side, the G-D-S NDC channel is not a competitor to it. It is a holding pen for sellers who have not moved yet. And Lufthansa did not invent this. British Airways and Iberia have exempted NDC from the Distribution Technology Charge since 2017. What Lufthansa has that the others do not is the middle rung, and the middle rung is what reveals the intent.

Eric Marketts

Second story needs one piece of groundwork. What does an NDC aggregator actually do?

Steph Nell

It solves a multiplication problem. Roughly eighty carriers have a certified NDC A-P-I live today, several thousand sellers need to consume them, and every carrier implemented the standard slightly differently. That is not eighty integrations, it is a matrix. And note the number. Eighty with NDC live, against more than four hundred still reachable only through EDIFACT. Aggregators sit in the middle, absorb the variation, and give the seller one integration that reaches many carriers. The independents do it, Duffel, Verteil, TPConnects, Travelfusion, and the G-D-S companies do it too. It is a genuinely valuable job.

Eric Marketts

And a direct connect is the opposite.

Steph Nell

A direct connect is the seller building and maintaining a point-to-point integration into one airline's own A-P-I. You take on the version upgrades, the certification, the servicing edge cases, all of it, in exchange for full-fidelity content and no intermediary in the path.

Eric Marketts

On August tenth, Navan , which has been public on the Nasdaq since last October, announced it had upgraded its Singapore Airlines NDC access from an aggregated connection to a direct connection, running on the carrier's Amadeus Altea NDC twenty-one-point-three A-P-I. Navan says over seventy percent of Singapore Airlines bookings now go through the NDC channel. Two precision points on that. It is Navan's number, published in Navan's release, with no period and no measurement basis given, and Singapore Airlines has published nothing. And Singapore Airlines did participate, with a quote from Gan Cai Fong, its General Manager of Distribution. Amadeus issued nothing at all. So: vendor-announced, airline-endorsed.

Steph Nell

And Navan did not name the aggregator it replaced, so neither will we.

Eric Marketts

Then three days later, on August thirteenth, Spotnana announced its own direct NDC connection to Singapore Airlines. Same carrier. Gan Cai Fong gave Spotnana a quote as well. And the trade coverage of the Spotnana deal carries a claim the Navan coverage does not: that the NDC content comes in below EDIFACT and that distribution surcharges are eliminated. I went looking for those on Spotnana's own site and could not find either one, so treat that as reporting, not as a published company figure.

Steph Nell

Two independent platforms, one carrier, four days. That is not two companies having the same idea in the same week. That is a carrier running a program and announcing it through its partners.

Eric Marketts

And one thing the coverage mostly implied and got wrong. This is not Navan's first direct connect. Navan already runs direct NDC connections with S-A-S, Qantas, ITA Airways, Emirates, and United, going back to March 2024.

Eric Marketts

Bull case.

Steph Nell

The direct connect is the endgame NDC actually promised, arriving on schedule. Full-fidelity offers with no translation loss, negotiated corporate fares, continuous pricing, twenty-four-hour holds, self-service exchange and cancel. For a carrier where the seller says seventy percent of volume already runs on NDC, the aggregation layer has stopped adding value and started adding cost and a hop. And there is a second bull case that connects back to story one without depending on anybody's press release. Where a carrier runs a channel surcharge, a point-to-point integration sits on the untaxed side of it, and it also tends to sit on the side where the full catalogue lives. Cheaper and better content, in the same move.

Eric Marketts

Bear case.

Steph Nell

Direct connects do not scale linearly, and everyone knows it and announces them anyway. Navan and Spotnana can each justify a bespoke integration to Singapore Airlines because their volume supports it. No T-M-C hand-builds direct connects to two hundred airlines, and no airline hand-builds them to five thousand sellers. The moment it becomes the expectation rather than the exception, the long tail on both sides gets stranded and you have rebuilt the fragmentation the aggregation existed to solve, one tier higher.

Eric Marketts

And the number itself?

Steph Nell

The number is soft. Navan's release says over seventy percent of Singapore Airlines bookings are made through the NDC channel. One trade outlet rewrote it as seventy percent of the bookings made via Navan, a completely different and vastly smaller claim. Two incompatible versions in three days, no airline source behind either. That is a vendor claim, not a market fact.

Eric Marketts

Critical take.

Steph Nell

The less obvious one comes out of the first story, and it cuts against the easy version. Read the benefits actually claimed for these deals. Not latency. Not richer content. Lower cost per booking and no channel surcharge. That is a pricing outcome, not a technology one. But here is the uncomfortable part, and Lufthansa's own terms are what expose it: you do not need to build a direct connect to escape a channel surcharge. Lufthansa will give a small IATA agency the untaxed tier for a website registration. So when a Navan or a Spotnana spends real engineering money on a point-to-point integration, cost avoidance is not the whole story. They are buying the relationship, the full catalogue, and control of the servicing path. And that is what sorts by balance sheet, because the registration is free and the integration is not.

Eric Marketts

Here is my problem with the whole direct connect story, though, and it is the thing we spent all of episodes eight, fifteen and sixteen on. Does any of this survive AI agents? Because if search economics break, the endgame everyone is describing might be the wrong endgame.

Steph Nell

That is the right question and it forced me back into the documents, where I found something that means we owe you a correction.

Eric Marketts

Go.

Steph Nell

Four episodes running we have said no carrier has published authentication, rate limits, or a price for the query. Two of those stand. The rate limit does not. Lufthansa Group's NDC terms, section seven point one. Quote: the Lufthansa Group Members will cover the shopping costs until a maximum Look-to-Book Ratio of five hundred to one. If the ratio is greater, the Lufthansa Group Members reserve the right to take any appropriate measures they deem necessary, including, but not limited to, deactivating your Access Right.

Eric Marketts

That is a rate limit.

Steph Nell

Defined metric, specific number, stated consequence, word for word in that document since May 2023. It is not an agent policy. No A-I language, no bot language, nothing about automation. It was written for agencies polling badly, three years before any of this. But we said nobody had published a number, somebody had, and we spent four episodes asking for a document we had not read. That is on us, and it is exactly the failure we have been criticising in everybody else.

Eric Marketts

Is Lufthansa alone?

Steph Nell

Alone in publishing. United reportedly enforces one, but that is two trade outlets citing T-M-C sources and nobody outside United's contracts can tell you the number. These caps are widespread and almost universally private. Lufthansa published the one everybody else keeps in the bilateral.

Eric Marketts

Now put it against the agent numbers.

Steph Nell

Five hundred to one is the cap. Current industry look-to-book is ten to twenty thousand to one, and agentic projections run to two hundred thousand. So a seller at agent-era ratios is twenty to four hundred times over Lufthansa's published limit.

Eric Marketts

Which answers my question.

Steph Nell

It does, and not the way the direct connect story is being sold. In the agent era, access stops being a technical question and becomes a contractual one, and the only sellers with a contract are the ones the airline can identify. So the direct connect survives, but not as a cost play or a content play. It survives as a credential. The identified seller negotiates a ratio, a price, a service level. Traffic arriving anonymously through an aggregation layer gets throttled first, because the carrier cannot tell whose it is.

Eric Marketts

And that changes what the zero tier was ever for.

Steph Nell

Completely. The untaxed model requires registration. Lufthansa is not giving away access. It is buying identity. It will let you in for nothing, worldwide, with the full catalogue, if it knows exactly who you are and can meter you. That is ours, not something any carrier has said. But look at what is being exchanged and tell me it is not the trade.

Eric Marketts

Honest counterweight?

Steph Nell

Two. The mitigation being built right now is not carrier policy, it is filtering at the aggregator layer. Amadeus shipped a machine-learning filter in December and Air France-KLM says it blocked more than seventy percent of irrelevant traffic. Somebody else is solving it upstream. And nobody has published rigorous data on where agent search volume lands, so the identity argument is our projection, not a measurement.

Eric Marketts

And meanwhile the commercial framework is being built without airlines in it.

Steph Nell

Google confirmed agentic hotel booking Lyve in testing on August seventh. Across that programme and its Direct Offers pilot, the transacting partners are six hotel and O-T-A brands. Not one airline. Sabre is advising on the air side, which is not the same as a carrier being in the room.

Eric Marketts

Here is the spine, and it is not really about Lufthansa. Both of this week's stories are the same shape. Somebody quoted a number that describes a thing that does not exist.

Steph Nell

There is no such thing as NDC adoption. There are two Lufthansa NDCs at two prices with two catalogues, and every chart adds them together. And there is no verified seventy percent at Singapore Airlines, there is a vendor claim with no denominator and two incompatible published versions inside three days.

Eric Marketts

And us.

Steph Nell

And us. We spent four episodes asking for a published rate limit that had been sitting in a contract since 2023. So say it plainly. This industry is running several realities at once and quoting them as one, and most are built on wishes rather than data. We are not standing outside that. We are in it.

Eric Marketts

For anyone new, the short version.

Steph Nell

Almost everything in airline distribution looks like a technology argument and almost none of it is. It is a pricing argument wearing a technology costume. Fourteen years of NDC evangelism moved this industry to about a fifth of settled volume. One surcharge moved Lufthansa Group to half.

Eric Marketts

And the sharper version, for the people who have been here a while.

Steph Nell

Go to the document somebody had to be accurate in. Not the announcement. The rate card, because the airline bills against it. The terms, because they have to be enforceable. The agent documentation, because sellers have to transact. The investor report, because shareholders have to be told. Every real finding in this episode came from one of those four. None came from a newsroom post.

Eric Marketts

And the metric.

Steph Nell

Split your NDC number in two. How much arrives through a G-D-S and how much does not, because Lufthansa has now published that those are different products at different prices. Then find your own look-to-book ratio, by carrier, and hold it next to five hundred to one. In the agent era, the seller an airline can identify is the seller who gets to keep asking questions.

Eric Marketts

If you own a channel P and L, send this to whoever writes your distribution business case. Not to agree with us. To argue about the pricing, out loud, before the next contract cycle closes.

Steph Nell

And the standing ask, narrower now than it was. Authentication, and a price for the query. Lufthansa published the rate limit three years ago, for agencies rather than machines. Nobody has published the other two, and nobody has written any of it for the buyer that is actually coming. If you are the carrier about to, we want to hear from you.

Eric Marketts

I'm Eric Marketts.

Steph Nell

I'm Steph Nell. Thanks for listening.

Eric Marketts

Read the rate card, not the roadmap. Stay sharp out there.