Global Distribution System

Airline distribution network

A global distribution system (GDS) is a network operated by a company that enables automated transactions between third parties and booking agents in order to provide travel-related services to the end consumers. 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, and activities.

GDS is different from a computer reservations system, which is a reservation system used by the respective vendors. Primary customers of GDS are travel agents (both online and office-based) to make reservation on various reservations systems run by the vendors. GDS holds no inventory; the inventory is held on the vendor's reservation system itself. A GDS system^[1] will have real-time link to the vendor's database. For example, when a travel agency requests a reservation on the service of a particular airline, the GDS system routes the request to the appropriate airline computer reservations system. This enables a travel agent with a connection to a single GDS to choose and book various flights, hotels, activities and associated services on all the vendors in the world who are part of that GDS.

Example of a booking facilitation done by an airline GDS

A mirror image of the passenger name record 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 his entire itinerary, each airline he flies 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. e.g. if a passenger books a journey from Amsterdam to London on KLM, London to New York on British Airways, 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, the PNR in KLM would show the Amsterdam to London segment along with 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. 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 (primarily Amadeus and Sabre) also have a dual use capability for hosting multiple computer reservations system, in such situations functionally the computer reservations system and the GDS partition of the system behave as if they were separate systems.^[2][3][4]

End-user reservation portals run by GDS companies

The table below lists the various portals run by GDS companies. A customer can view their reservations held in the GDS's own database or using the airline's booking system itself. If a reservation is made through a GDS, there are usually two reservation references: one is called a GDS locator code and the other the actual reservation or PNR number.

Future of GDS systems and companies

GDS in the travel industry originated from a traditional legacy business model that existed to inter-operate between airline vendors during the early days of computerised reservations systems of the 1950s. Most airline vendors (including budget and mainstream operators) have now adopted a strategy of 'direct selling' to their wholesale and retail customers (passengers) by investing in their own reservations and direct-distribution systems. Hence significant 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. Hence some experts argue that these change in business models will eventually lead to phasing out of GDS in the Airline space by the year 2020.^[5]

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.

References