Global distribution system

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Diagram of an airline global distribution system Diagram of an airline Global Distribution System.jpg
Diagram of an airline global distribution system

A global distribution system (GDS) is a computerised network system owned or operated by a company that enables transactions between travel industry service providers, mainly airlines, hotels, car rental companies, and travel agencies. The GDS mainly uses real-time inventory (e.g. number of hotel rooms available, number of flight seats available, or number of cars available) from the service providers. Travel agencies traditionally relied on GDS for services, products and rates in order to provide travel-related services to the end consumers. Thus, a GDS can link services, rates and bookings consolidating products and services across all three travel sectors: i.e., airline reservations, hotel reservations, car rentals.

Contents

GDS is different from a computer reservation system, which is a reservation system used by the service providers (also known as vendors). Primary customers of GDS are travel agents (both online and office-based) who make reservations on various reservation systems run by the vendors. GDS holds no inventory; the inventory is held on the vendor's reservation system itself. A GDS system will have a real-time link to the vendor's database. For example, when a travel agency requests a reservation on the service of a particular airline company, the GDS system routes the request to the appropriate airline's computer reservations system.

Example of a booking facilitation done by an airline GDS

A mirror image of the passenger name record (PNR) in the airline reservations system is maintained in the GDS system. If a passenger books an itinerary containing air segments of multiple airlines through a travel agency, the passenger name record in the GDS system would hold information on their entire itinerary, while each airline they fly on would only have a portion of the itinerary that is relevant to them. This would contain flight segments on their own services and inbound and onward connecting flights (known as info segments) of other airlines in the itinerary. For example, if a passenger books a journey from Amsterdam to London on KLM, London to New York on British Airways, and New York to Frankfurt on Lufthansa through a travel agent and if the travel agent is connected to Amadeus GDS, the PNR in the Amadeus GDS would contain the full itinerary, while the PNR in KLM would show the Amsterdam to London segment along with the British Airways flight as an onward info segment. Likewise, the PNR in the Lufthansa system would show the New York to Frankfurt segment with the British Airways flight as an arrival information segment. Finally, the PNR in British Airways' system would show all three segments, one as a live segment and the other two as arrival and onward info segments.

Some GDS systems also have a dual-use capability for hosting multiple computer reservation systems; in such situations functionally the computer reservations system and the GDS partition of the system behave as if they were separate systems.[ citation needed ]

Mid-office travel automation

Mid-office automation captures Passenger name record data from a variety of global distribution systems (Sabre, Galileo, Amadeus, and Worldspan) sources and lets travel agencies create custom business rules to validate reservation accuracy, monitor travel policies, perform file finishing, prepare itineraries/invoices and process ticketing.

Quality control software is used for such functions as ensuring reservations are formatted properly, checking for lower fares and watching for seat availability, upgrades, waitlist clearance, and taking advantage of back to back ticketing opportunities. When customized, such tools allow agencies and corporate accounts to monitor virtually any information in global distribution system passenger name records. Accelerating such tools also creates opportunities for customer relationship management. (a)

Mid-office automation is key to increasing the touchless rate of online adoption.

Future of GDS systems and companies

Global distribution systems in the travel industry originated from a traditional legacy business model that existed to inter-operate between airline vendors and travel agents. During the early days of computerized reservations systems flight ticket reservations were not possible without a GDS. As time progressed, many airline vendors (including budget and mainstream operators) have now adopted a strategy of 'direct selling' to their wholesale and retail customers (passengers). They invested heavily in their own reservations and direct-distribution channels and partner systems. This helps to minimize direct dependency on GDS systems to meet sales and revenue targets and allows for a more dynamic response to market needs. These technology advancements in this space facilitate an easier way to cross-sell to partner airlines and via travel agents, eliminating the dependency on a dedicated global GDS federating between systems. Also, multiple price comparison websites eliminate the need of dedicated GDS for point-in-time prices and inventory for both travel agents and end-customers. Hence some experts argued that these changes in business models might have led to the complete phasing out of GDS in the Airline space by the year 2020. [1] On the other hand, some travel professional experts demonstrate that GDS still continue to offer the flexibility and bulk buying capacities for airline consolidators to reach travel agents that individual airline systems are not able to provide customer segments with wider choices. [2] Their argument is, individual airline distribution systems are not designed to interoperate with competitors systems.

Lufthansa Group announced in June 2015 that it was imposing an additional charge of €16 when booking through an external global distribution system rather than their own systems. They stated their choice was based upon that the costs of using external systems was several times higher than their own. Several other airlines including Air France–KLM and Emirates Airline also stated that they are following the development. [3] [4]

However, hotels and car rental industry continue to benefit from GDS, especially last-minute inventory disposal using GDS to bring additional operational revenue. GDS here is useful to facilitate global reach using existing network and low marginal costs when compared to online air travel bookings. Some GDS companies are also in the process of investing and establishing significant offshore capability in a move to reduce costs and improve their profit margins to serve their customer directly accommodating changing business models.

See also

Related Research Articles

<span class="mw-page-title-main">Travel agency</span> Retailer that provides tourism-related services

A travel agency is a private retailer or public service that provides travel and tourism-related services to the general public on behalf of accommodation or travel suppliers to offer different kinds of travelling packages for each destination. Travel agencies can provide outdoor recreation, arranging logistics for luggage and medical items delivery for travellers upon request, public transport timetables, car rentals, and bureau de change services. Travel agencies can also serve as general sales agents for airlines that do not have offices in a specific region. A travel agency's main function is to act as an agent, selling travel products and services on behalf of a supplier. They are also called Travel Advisors. They do not keep inventory in-hand unless they have pre-booked hotel rooms or cabins on a cruise ship for a group travel event such as a wedding, honeymoon, or other group event.

Computer reservation systems, or central reservation systems (CRS), are computerized systems used to store and retrieve information and conduct transactions related to air travel, hotels, car rental, or other activities. Originally designed and operated by airlines, CRSs were later extended for use by travel agencies, and global distribution systems (GDSs) to book and sell tickets for multiple airlines. Most airlines have outsourced their CRSs to GDS companies, which also enable consumer access through Internet gateways. Modern GDSs typically also allow users to book hotel rooms, rental cars, airline tickets as well as other activities and tours. They also provide access to railway reservations and bus reservations in some markets, although these are not always integrated with the main system. These are also used to relay computerized information for users in the hotel industry, making reservation and ensuring that the hotel is not overbooked.

Sabre Global Distribution System, owned by Sabre Corporation, is a travel reservation system used by travel agents and companies to search, price, book, and ticket travel services provided by airlines, hotels, car rental companies, rail providers and tour operators. Originally developed by American Airlines under CEO C.R. Smith with the assistance of IBM in 1960, the booking service became available for use by external travel agents in 1976 and became independent of the airline in March 2000.

A passenger name record (PNR) is a record in the database of a computer reservation system (CRS) that contains the itinerary for a passenger or a group of passengers travelling together. The concept of a PNR was first introduced by airlines that needed to exchange reservation information in case passengers required flights of multiple airlines to reach their destination ("interlining"). For this purpose, IATA and ATA have defined standards for interline messaging of PNR and other data through the "ATA/IATA Reservations Interline Message Procedures - Passenger" (AIRIMP). There is no general industry standard for the layout and content of a PNR. In practice, each CRS or hosting system has its own proprietary standards, although common industry needs, including the need to map PNR data easily to AIRIMP messages, has resulted in many general similarities in data content and format between all of the major systems.

<span class="mw-page-title-main">Boarding pass</span> Document provided to an air-travel passenger functioning as a ticket.

A boarding pass or boarding card is a document provided by an airline during airport check-in, giving a passenger permission to enter the restricted area of an airport and to board the airplane for a particular flight. At a minimum, it identifies the passenger, the flight number, the date, and scheduled time for departure. A boarding pass may also indicate details of the perks a passenger is entitled to and is thus presented at the entrance of such facilities to show eligibility.

In airline reservation systems, a record locator is an alphanumeric or alpha code used to identify and access a specific record on an airline’s reservation system. An airline’s reservation system automatically generates a unique record locator whenever a customer makes a reservation or booking, commonly known in the industry as an itinerary. When an itinerary is entered into the reservation system it is commonly known as a passenger name record (PNR). An itinerary may be entered into the system by a passenger, travel agent or airline employee.

<span class="mw-page-title-main">Amadeus IT Group</span> Spanish travel technology company

Amadeus IT Group, S.A. is a major Spanish multinational technology company that provides software solutions for the global travel and tourism industry. It is the world's leading provider of travel technology that focus on developing software for airlines, hotels, travel agencies, and other travel-related businesses to enhance their operations and customer experiences.

<span class="mw-page-title-main">ATPCO</span>

The Airline Tariff Publishing Company is a privately held corporation that engages in the collection and distribution of fare and fare-related data for the airline and travel industry. ATPCO currently works with more than 400 airlines worldwide, and it supplies more than 99% of the industry’s intermediated fare data to all the major airfare pricing engines, storing over 318 million active fares in its database and managing an average of 15 million fare changes each day.

Interlining, also known as interline ticketing and interline booking, is a voluntary commercial agreement between individual airlines to handle passengers traveling on itineraries that require multiple flights on multiple airlines. Such agreements allow passengers to change from one flight on one airline to another flight on another airline without having to gather their bags or check-in again. Airlines can also promise free rebooking if the connection is lost due to a delay.

<span class="mw-page-title-main">Airline ticket</span> Entrance ticket used for air travel

An airline ticket is a document or electronic record, issued by an airline or a travel agency, that confirms that an individual is entitled to a seat on a flight on an aircraft. The airline ticket may be one of two types: a paper ticket, which comprises coupons or vouchers; and an electronic ticket.

Airline reservation systems (ARS) are systems that allow an airline to sell their inventory (seats). It contains information on schedules and fares and contains a database of reservations and of tickets issued. ARSs are part of passenger service systems (PSS), which are applications supporting the direct contact with the passenger.

Videcom International Limited is a United Kingdom travel technology company based in Henley-on-Thames. It designs, develops and provides modern computer reservations systems to airlines and the travel industry, specializing in the hosting and distribution of airline sales.

Alternate air ticket purchasing order systems allow for alternative ways of purchasing air tickets and GDS Connectivity not involving Internet or personal TA contact.

Galileo is a computer reservations system (CRS) owned by Travelport. As of 2000, it had a 26.4% share of worldwide CRS airline bookings. In addition to airline reservations, the Galileo CRS is also used to book train travel, cruises, car rental, and hotel rooms.

Corporate travel management is the function of managing a company’s strategic approach to travel, the negotiations with all vendors, day-to-day operation of the corporate travel program, traveler safety and security, credit-card management and travel and expenses ('T&E') data management.

Travicom was the trading name of Travel Automation Services Ltd, a travel technology company based in the United Kingdom providing a global distribution system between airlines and travel agencies.


An agency debit memo (ADM) is a notice sent, normally by an airline to a travel agent, requiring the recipient to pay a sum of money to the sender. A frequent reason for issue of an ADM is where an air travel ticket has been issued and its rules have not been fully complied with, such as where the fare rules require tickets to be issued within three days of creating the PNR or reservation, and the ticket was issued on the fifth day.

In the aviation industry, a pseudo city code,pseudo-city code, or office ID, is an alpha-numeric identifier for a corporate user of a computer reservation system (CRS) or global distribution system (GDS), typically a travel agency. The codes are typically 3 or 4 characters long,, and are unique to a specific office of a travel agency. They are used to associate each agency's bookings with the agency, and also to identify private fares available to the agency.

Navitaire LLC is a subsidiary of Amadeus IT Group. Navitaire primarily offers systems for passenger reservations, travel commerce, ancillary revenue and merchandising, as well as revenue accounting and revenue management to airlines and rail companies.

An airfare is the fee paid by a passenger for air transport and is made up of the charge for a passenger to fly from an origin to destination and includes the conditions, rules and restrictions for travelling on the airfare.

References

  1. "Vision 2020: Old Dogs, New Tricks and the Future of GDSS".
  2. "How Airline Consolidators Can Help Agencies of All Sizes". 29 January 2018.
  3. Jainchill, Johanna. "Lufthansa to add surcharge for GDS bookings". Travel Weekly. Retrieved 13 June 2015.
  4. "Buying ticket from airline website cheaper than travel agency". emirates 24/7. Reuters. Retrieved 13 June 2015.

Bibliography