title: “Flight Supply Strategy — Complete Findings & Decision Framework” category: Supply Strategy status: Draft created: 2026-02-25 related:

• “Aggregated Reference”
• “Duffel vs Verteil”
• “Wego/Skyscanner Mechanics”

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Flight Supply Strategy — Complete Findings & Decision Framework

Executive Summary

This document consolidates all findings from our discussions regarding flight supply strategies:

• OTA Model — redirect-based, capital-light, fastest time-to-market
• NDC / Direct Airline Integration (DAI) — higher margins, higher complexity
• Hybrid Model — phased approach balancing speed, risk, and margin growth

It includes operational, technical, commercial, and strategic insights to support a board-level decision.

[!IMPORTANT] This is not a technical preference decision. It is a capital allocation, risk management, and long-term positioning decision.

1. How Meta-Search Platforms Work

Meta-search platforms perform five core functions:

1. Aggregate supply from multiple providers (OTAs, airlines, aggregators)
2. Normalize and deduplicate itineraries
3. Rank and display comparable flight options
4. Redirect users (or optionally handle checkout)
5. Track click attribution for revenue

[!NOTE] Key realities:

• Not all airlines are queried directly — supply comes through intermediaries
• APIs are called in parallel with timeouts and caching
• Prices can change due to offer expiration or inventory changes — “price mismatch” is inherent to the model

2. OTA Model

What It Is

You integrate multiple Online Travel Agencies (OTAs). Users compare prices on your platform and are redirected to the OTA to book.

sequenceDiagram
    actor User
    participant Meta as Meta-Search Platform
    participant OTA as OTA Supplier

    User->>Meta: Search Flights
    Meta->>OTA: Query Inventory (Parallel)
    OTA-->>Meta: Return Offers
    Meta->>User: Display Comparison
    User->>Meta: Click Offer
    Meta->>OTA: Redirect User to OTA Check-out
    Note over OTA: OTA handles Payment, Ticketing & Support
    User->>OTA: Complete Booking

Platform Responsibilities

Advantages

• ✅ Fast time-to-market — minimal infrastructure needed
• ✅ Low operational complexity — no payment or refund handling
• ✅ Capital-light — no working capital exposure or float risk

Disadvantages

• ❌ Lower margins — limited to CPC/CPA commission
• ❌ No booking ownership — users don’t have booking history in your system
• ❌ Partner dependency — reliant on OTA reliability and data accuracy

Refund & Booking History

• Managed entirely by the OTA
• Users do NOT have booking history in your system
• Support burden falls on the OTA, not you

3. NDC / Direct Airline Integration (DAI)

What It Is

Integration with airline retail APIs using the NDC (New Distribution Capability) standard — an IATA protocol that enables airlines to sell directly through third-party platforms.

sequenceDiagram
    actor User
    participant Meta as Meta-Search Platform
    participant NDC as Airline NDC API

    User->>Meta: Search Flights
    Meta->>NDC: AirShoppingReq
    NDC-->>Meta: AirShoppingRS (Offers)
    Meta->>User: Display Results
    User->>Meta: Select Offer
    Meta->>NDC: OfferPriceReq (Confirm Price)
    NDC-->>Meta: OfferPriceRS
    User->>Meta: Checkout & Pay
    Note over Meta: Meta handles PCI/Payment
    Meta->>NDC: OrderCreateReq (Issue Ticket)
    NDC-->>Meta: OrderViewRS (Ticket Issued)
    Note over Meta: Meta handles Refunds & Support

NDC Lifecycle

flowchart LR
    A[AirShopping] --> B[OfferPrice]
    B --> C[OrderCreate]
    C --> D[OrderChange]
    C --> E[OrderCancel]

Advantages

• ✅ Higher margin potential — markup + commission
• ✅ Richer ancillary content — seat selection, baggage, meals
• ✅ Airline differentiation — access to exclusive fares and bundles
• ✅ Brand ownership — you own the customer relationship

Disadvantages

• ❌ High technical complexity — Offer → Order lifecycle is non-trivial
• ❌ Offer expiration — offers have TTLs (time-to-live) and can expire mid-checkout
• ❌ Servicing burden — refund/change processing falls on you
• ❌ Payment compliance — PCI-DSS certification required
• ❌ Airline variability — each airline implements NDC differently

4. Why Multiple Integrations Are Needed

Even with NDC integration:

[!NOTE] Even with an aggregator like Verteil or Duffel, multi-sourcing may be required for full corridor coverage and negotiation leverage.

5. Hybrid Model (Recommended for Most Startups)

Structure

Benefits

• ✅ Early revenue with reduced risk
• ✅ Gradual margin improvement as NDC is added
• ✅ Controlled complexity growth
• ✅ Preserves future optionality

Decision Gate

Proceed to NDC phase ONLY if:
  Incremental Margin > Incremental Operational Cost + Risk Premium

Cross-reference: See Aggregated Reference § Hybrid Model for the full phased roadmap with Gantt chart.

6. Supplier Landscape Overview

Cross-reference: See Duffel vs Verteil for a detailed head-to-head comparison.

7. Strategic Trade-Off Matrix

quadrantChart
    title Supply Model Risk vs Margin Profile
    x-axis Low Risk --> High Risk
    y-axis Low Margin --> High Margin
    quadrant-1 High Risk & Reward (NDC Heavy)
    quadrant-2 Balanced Growth (Hybrid)
    quadrant-3 Fast & Safe (OTA Only)
    quadrant-4 Low Value (Avoid)
    "OTA Only": [0.15, 0.2]
    "NDC Heavy": [0.85, 0.85]
    "Hybrid": [0.45, 0.65]

8. Weighted Decision Framework

The final decision should be weighted against these factors:

Quick Decision Guide

9. Board-Level Framing

[!CAUTION] This is not a technical choice. It is:

• A capital allocation decision
• A risk management decision
• A long-term positioning decision

The board must define risk tolerance, capital envelope, and 3-year positioning goals before selecting a path.

10. Recommended Evolution Pattern

For most startups, the recommended path is:

flowchart LR
    A["1. Launch with OTA\n(Months 0–6)"] --> B["2. Optimize Unit Economics\n(Months 3–9)"]
    B --> C["3. Add Selective NDC\n(Months 6–12)"]
    C --> D["4. Consider Checkout\n(Month 12+)"]

1. Launch with multiple OTA integrations
2. Optimize unit economics (CTR, conversion, supplier quality)
3. Add selective NDC on high-volume routes where margin uplift justifies complexity
4. Consider on-platform checkout only after compliance and ops readiness are confirmed

Final Conclusion

The Hybrid strategy provides the best balance between:

• ⚡ Speed
• 🛡️ Risk
• 💰 Margin
• 🔄 Optionality

However, the final decision must align with:

• Geography — which corridors are highest priority
• Funding — available capital and burn rate
• Ambition — margin targets and market positioning goals
• Operational capacity — team size and maturity

Quick Flashcards

Prepared as a consolidated strategic reference document.

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