Computer reservations system
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A computer reservations system, or CRS, is a computerized system used to store and retrieve information and conduct transactions related to travel. Originally designed and operated by airlines, they were later extended to travel agents as a sales channel; major CRS operations are also known as Global Distribution Systems (GDS). Airlines have divested most of their direct holdings to dedicated Global Distribution System companies, and many systems are now accessible to consumers through Internet gateways for hotel, rental cars, and other services as well as airline tickets.
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[edit] Today's challenges
The big four GDS companies are all facing challenges. Their system architectures are largely based on a mainframe TPF (Transaction Processing Facility) [1] framework which -- while very reliable, and capable of tremendous I/O throughput – has relatively little CPU power, and is exorbitantly expensive to maintain and enhance. The declining cost of modern server hardware and the relatively recent introduction of pricing, shopping, and booking software from vendors like ITA Software, has allowed many airlines to shift significant buying volume to their own websites, thereby avoiding GDS distribution fees of $4 or more per flight sector.
In recent years, all of the big four GDS companies have, to varying degrees, begun selectively migrating (or "offloading") processes from their legacy mainframe platforms to service oriented architectures (SOA). By utilizing high-performance, lower cost open systems platforms in an SOA approach, they further improve their capacity to cost effectively handle a fast-rising "look-to-book" ratio, i.e., the number of shopping transactions compared to actual purchases. The explosive growth of this ratio was driven initially by the creation and utilization of robotic software and, more recently, by the rapid growth of consumers' multi-site shopping behavior on the Internet.
Beginning in 2004, several companies – including ITA Software, G2 Switchworks, Farelogix, and Innovative Network Systems – claimed to be developing complete GDS alternatives. The new entrants tout lower fees and greater flexibility. Justifiably, the big four GDS companies cast doubt on their viability.
However, it is still very uncommon for a travel agency to operate without the use of at least one of the big four GDS systems. The GDS companies are playing catch up in the technology arena. All now have a browser based system; Sabre, Amadeus and Worldspan have full browser based solutions while Galileo still utilizes a VPN based system. Most, in one way or another, are aggregating webfares back into the GDS, and some airlines have agreed to post their webfares both to their own sites and on the GDS.
Many of these GDS's have now started to integrate forward into the business, reaching out to the customers with their own websites, such as Expedia (formerly owned by IAC, but now spun off into a separate company called Expedia Inc.), Travelocity (owned by Sabre), Orbitz (formerly owned by Cendant, but now called Travelport and has been recently sold to Blackstone) and many others. These new entrants to the market have further eroded revenues at the GDS.
Today, each system allows an operator to locate and reserve inventory (for instance, an airline seat on a particular route at a particular time), find and process fares/prices applicable to the inventory (Revenue management, Variable pricing and Geo (marketing)), generate tickets and travel documents, and generate reports on the transactions for accounting or marketing purposes.
U.S. Department of Transportation regulations governing CRS's were eliminated as of July 31, 2004. However, CRS's remain subject to government regulations in Canada and the European Union. Since all of the major CRS's operate globally, the most restrictive requirements -- currently those of the EU Code of conduct for the use of computerised reservation systems -- effectively govern their worldwide operations. The CRS/GDS companies have been lobbying Canada and the EU for worldwide deregulation of the industry.
[edit] Major Systems
| Name | Created by | Also used by | Market share* |
|---|---|---|---|
| SABRE
(merged with Abacus and Qantas' Fantasia) |
|
30.8% | |
| Amadeus
(based on Eastern Air Lines' SystemOne) |
30.5% | ||
| Galileo
(based on United Airlines' Apollo, merged with Ansett's Southern Cross) |
26.4% | ||
| WORLDSPAN | 15.1% |
- Airline bookings, 2002.
For other systems, see List of global distribution systems.
[edit] History
In the early days of commercial aviation, passengers were relatively few and each airline's routes and fares were tightly regulated, in the United States by the Civil Aeronautics Board after 1940. These were published in a volume entitled the Official Airline Guide, from which travel agents or consumers could construct an itinerary, then call or telex airline agents who would mark the reservation on a card and file it. As the demand for and complexity of air travel expanded, however, this process soon became onerous and costly.
In 1946, American Airlines installed the first experimental automated booking system, the electromechanical Reservisor. A newer machine with temporary storage based on a magnetic drum soon followed, the Magnetronic Reservisor. This system proved fairly successful, and was soon being used by a number of airlines, Sheraton Hotels, and Goodyear for inventory control. However these systems were seriously hampered by the need for local human operators to do the actual lookups; ticketing agents would have to call into the booking office, whose operators would make requests to a small team operating the Reservisor and then speak the results back into the telephone. There was no way for the agents to directly query the system.
In 1953, Trans-Canada Airlines (TCA) started investigating a computerized system with remote terminals, testing one such concept on the University of Toronto's Manchester Mark I machine that summer. Although successful, they found that input/output was a major problem. Ferranti Canada became involved in the project and suggested a new system using punch cards and a transistorized computer in place of the unreliable tube-based Mark I. The resulting system, ReserVec, started operation in 1962, and took over all booking operations in January 1963. Terminals were placed in all of TCA's ticketing offices, where queries and bookings took about one second to complete with no remote operators needed.
In 1953, American Airlines CEO C. R. Smith chanced to sit next to R. Blair Smith, a senior IBM sales representative. Their idea of an automated airline reservation system (ARS) resulted in a 1959 venture known as the Semi-Automatic Business Research Environment, or SABRE, launched the following year. By the time the network was completed in December 1964 it was the largest non-governmental data processing system in the world.
Other airlines soon established their own systems. Delta Air Lines launched its DATAS in 1968. United Airlines and TWA followed in 1971 with Apollo and PARS respectively. Soon, travel agents began pushing for a system that could automate their side of the process by accessing the various ARSs directly to make reservations. Fearful this would place too much power in the hands of agents, American Airlines executive Robert Crandall proposed creating an industry-wide Computer Reservations System to be a central clearinghouse for U.S. travel; other airlines demurred, citing fear of antitrust prosecution.
In 1976, United began offering its Apollo system to travel agents; while it would allow the agents to book tickets on United's competitors, the marketing value of the convenient terminal proved indispensable. SABRE, PARS, and DATAS were soon released to travel agents as well. Following airline deregulation in 1978, an efficient CRS proved particularly important; by some counts, Texas Air executive Frank Lorenzo purchased money-losing Eastern Air Lines specifically to gain control of its SystemOne CRS.
European airlines also began to invest in the field in the 1980s, propelled by growth in demand for travel as well as technological advances which allowed the GDS to offer ever-increasing services and searching power. In 1987, a consortium led by Air France and West Germany's Lufthansa developed Amadeus, modeled on Eastern's SystemOne. In 1990, Delta, Northwest Airlines, and Trans World Airlines formed Worldspan, and in 1993, another consortium including British Airways, KLM, and United Airlines among others formed competing company, Galileo International, based on United's Apollo network. Numerous smaller companies have also been formed, aimed at geographic, industry, or language niches inadequately served by the "big four."
[edit] Competitive Concerns resulting from Codesharing
In Global Distribution Systems, such as Amadeus, Galileo CRS, Worldspan, or Sabre, codeshare results in the same flight details, except for the flight number, being displayed on computer screens excessively forcing other airlines flights to be displayed on following pages where they may be missed by passengers searching for required flights.
Much competition in the airline industry revolves around ticket sales (also known as "seat booking") strategies. Travel agents have a preference for flights which provide a direct connection. Code sharing gives this impression. Computer reservations systems (CRS) also often do not discriminate between direct flights and code sharing flights and present both before options that involve several isolate stretches run by different companies.
Criticism has been levelled against code sharing by consumer organizations and national departments of trade since it is claimed it is confusing and not transparent to passengers, but thus far without any success.
[edit] See also
[edit] External links
- Consumer Web Watch: Computer Reservations System (CRSs) and Travel Technology
- Hospitality.net: Galileo International Tells USDOT: Modified Computer Reservation System (CRS) Rules Necessary to Protect Consumers and Competition, 18 March 2003
- Anderson, Karen. "Evolution of the GDS" (PDF), Press.com
- Das, Samipatra. "Global Distribution Systems in Present Times," Hospitality.net, 30 September 2003
- Hasbrouck, Edward. The Practical Nomad: "What's in a Passenger Name Record (PNR)?"
