Global Distribution System (GDS)

Topics

•  History of GDS

• Top available GDS

• Steps to integrate a GDS in any online travel system

• GDS internal structure

• How travel companies use GDS?

• The benefits of using GDS

• Airlines vs GDS

• GDS Future 

History of GDS

Circular Reservation Table

History of GDS

Airlines used to employ fleets of operators just to process reservations. They sat around circular tables with scores of index cards — one for each flight — housed on a rotating shelf (a “Lazy Susan”). To book a seat, the operator would have to find the flight’s index card, mark it to indicate the booked seat, and write the flight ticket out by hand. The process would take 90 minutes for each reservation.

History of GDS

This workflow was cumbersome but did the job. As air travel became more and more popular, though, the reservation system became more and more of a bottleneck.

American Airlines saw this coming and had started working on solutions. They developed a  by 1952 a computerized booking system, but its workflow remained very manual. Though it allowed many people to look up flight information simultaneously, it still required operators to manually handle ticketing and talk to travel agents over the phone. It was enough to solve their scaling problems in the short-term.

History of GDS

IBM devloped a system that would automatically be able to notify agents of available seats, process their bookings, and even print their tickets — all without a human on the other end of the phone.

After spending 7 years and 40 million dollars they built SABRE (Semi-Automated Business Research Environment)

History of GDS

After CRS systems became commonplace, travel agents became the airline industry's bottleneck. Because each airline had their own system, it still took a long time for agents to shop around and find the best deals for their clients. So, in 1976, CRS providers launched terminals for travel agents, eliminating the need for inefficient phone calls and letting agents directly access airline reservation databases.
These terminals would only be useful if they let agents search for flights from multiple airlines all together. Thus, the CRS systems started sharing data with one another, leading to the birth of a new industry term — Global Distribution Services (GDS).

Top available GDS

Today, The GDS industry is mostly dominated by Sabre and Amadeus (they hold a combined market share of more then 70%)

Sabre

Amadeus

Integrating GDS in an online travel portal

• Get access to GDS tools

• Training and certification program

• Develop and integrate GDS testing environment

• GDS team will review and pass the integration

• Start using in a live environment

GDS internal structure

Airline

Inventory

GDS

GDS services

Travel consultant

GDS uses real time inventory for the service providers

How travel companies use GDS

Customer

Travel experts

GDS

Airline 1 inventory

Airline 2 inventory

GDS manages multiple airlines inventory in real time

Airline n inventory

Direct airline services

Airline inventory

Benefits of using GDS

• Computerized centralized service which has pricing, real-time availability and reservation functionality

• Increased travel shopping experience and convenience to consumers

• Increased pricing transparency

Benefits of using GDS

• Increased pricing transparency

• Help travel agents and companies to expand globally

• Real-time pricing updates can be used to make special offers

• It can provide the best rates by comparing different providers in a single platform

Airlines vs GDS

In the early days, GDS systems generated a lot of money for airlines. They provided a whole new distribution channel for flights, giving airlines a way to reach customers without directly marketing to them. Airlines do have to pay a GDS fee, these days around $12 per booking, but it’s historically been worth it.
As ticket prices dropped, though, airlines adapted to find new revenue streams outside of the airfare — add-ons like seat upgrades, priority boarding, and on-board wi-fi, and etc.
GDS systems, however, did not adapt with them.

 GDS future 

Too many different standards to follow

Airline n following some other standard

Airline 2 following "y" standard

Airline 1 following "x" standard

GDS

 GDS future 

NDC (New Distribution Capability) is a new data standard being promoted by the IATA (International Air Transport Association). Based on XML, it’s much more flexible

Airline n following NDC standard

Airline 2 following "NDC" standard

Airline 1 following "NDC" standard

GDS

 GDS future 

Sabre and Amadeus (the two biggest GDS players) have both already updating their systems to support NDC

Airline n following "NDC" standard

Airline 2 following "NDC" standard

Airline 1 following "NDC" standard

GDS

GDS (Global distribution systems)

Questions ????