GDS, The Reason behind Growth of Airline Industry

Debajani MohantyArchitect, NIIT Technologies

GDS

Global distribution systems (GDS) are computerized, centralized services that provide travel-related transactions. They cover everything from airline tickets to car rentals to hotel rooms and more.

Here is a link to a video that would explain how a GDS system works - http://www.youtube.com/watch?v=fJPkS7S-02g

Benefits

There are currently four major GDS systems: •Amadeus •Sabre •Travelport (Umbrella company for Galileo, Apollo & Worldspan)

In addition, there are several smaller or regional GDSs, including SITA, Infini (Japan), Axess (Japan), Tapas (Korea), Fantasia (South Pacific), and Abacus (Asia/Pacific) that serve interests or specific regions or countries.

Integrating your airline portal with any of the major GDS system of the world would allow users •To purchase tickets from multiple different providers or airlines across the globe•Car Rentals•Hotel Booking•Packaged holidays•Cruises and Ships•Railways•Local road transport

All the above could get added to the itinerary and come as a package to the end user. GDS enables the user to compare and choose the best possible package from various sources that suits his need.

How GDS evolved

Few decades back computer reservation systems(CRS) were developed to give accurate information about availability, price and booking of tourist products and services. Later they extended to book hotels, tourism and other hospitality business.

In 1962 American Airlines introduces SABRE (Semi-Automated Business Research Environment) the first commercial CRS developed by IBM to be used for

•Generating flight plans for the aircraft

•Tracking space parts

•Scheduling crews ..

Today Sabre Global Distribution System (GDS), owned by Sabre Holdings, is used by more than 350,000 travel agents around the world with more than 400 airlines, 100,000 hotels, 25 car rental brands, 50 rail providers and 14 cruise lines. The Sabre GDS enables companies such as American Airlines, American Express, BCD Travel, Carlson Wagonlit Travel, Hogg Robinson Group (HRG), Expedia, Frontier, Holiday Autos, Zuji, LastMinute, JetBlue, GetThere and Travelocity to search, price, book, and ticket travel services provided by airlines, hotels, car rental companies, rail providers and tour operators.

Before and After GDS

Before GDS travel agents required individual connections to airlines. Each airline used to be on different legacy systems. Searches and reservations used to be made separately.

A Typical Airline Portal

GDS works on XML

• The GDS systems expose their services as XML adhering to the standard OTA schema

• This involves XML to book, modify, cancel reservations for airlines, hotels, ground services, special services etc

• Services could be integrated seemlessly and both agents as well as B2C users can update transactions in seconds

OTA Schema

• The OpenTravel Alliance is a non-profit organization which develops open data transmission specifications for the electronic exchange of business information for the travel industry, including but not limited to the use of XML. The schemas could be found at http://www.opentravel.org/Specifications/SchemaIndex.aspx?FolderName=2014A

• Members of the OpenTravel Alliance include airlines, hotel companies, car rental companies, cruise lines, railways, global distribution systems, distribution companies, solutions providers, software developers and consultants

Overview of Airline Booking Process

The process involves multiple steps

How it works

• Location database is provided by IATA(International Air Transport Association). i.e. DEL, LON etc

• Algorithms are used to find possible routes between the source and destination

• GDS schedule database is searched for schedule which provides flight details

• GDS availability database provides info on available seats on scheduled flights

• GDS Fair database provides fare details depending on the passenger details i.e. no and type of passengers(Adult, child, infant, Diplomat, student) etc, itinerary type(one-way, return, multi-city), booking time (Apex, super-apex, peak hours, off-peak hours)

What are the systems supported by GDS?

•The GDS system includes high traffic portal travel sites or channels including Expedia, Hotels.com, Travelocity, AAA, Hotwire, Priceline and TravelWeb. 

•Most of the travel sites connect to only one GDS. For example makemytrip.com is connected to Amadeus. Expedia uses Sabre.

•One property cannot be connected to more than one GDS and that’s a rule.

Organizations that work with Aviation Industry

In order to regulate on GDS system for accurate information, security of passenger and cargo, airline revenues, infrastructure, fuel, taxation, airline environment etc. organizations work with governments to form a regulation framework. Here are few of them

IATA: International Air Transport Association

ICAO: International Civil Aviation Organization

ETTSA: European Technology and Travel Services Association

ATPCO: Airline Traffic Publishing Company

IATAN: International Airlines Travel Agent Network

SITA: Société Internationale de Télécommunications Aéronautiques

Challenges for GDS System

• Strategic Big Data

• Mobile Devices battles

• Hybrid IT & Cloud Computing

• Actionable Analytics

• Integrated Ecosystems

Disadvantages of GDS

There is always a negative side to every positive. A GDS can be an asset, but there are many hotels that chose to seek bookings through other means. With the uncertainty of the travel industry, many properties are looking for ways to cut costs and with a high ticket price, GDS’s are often one of the first to go. Some of the most common reasons hotels chose to opt out of using a GDS are:

• Money - The price of GDS’s alone is a deterrent for many properties. As a growing business, your funds may be better invested in other areas of your property.

• Priorities - Retaining customers is more important than bringing in new ones. Making sure that guests are comfortable with clean rooms, abundant amenities and a welcoming staff should be your first order of business.

• Industry stagnation - Despite their ability to connect agents with properties, it is ineffective if neither party uses it. A HotelHub bookings report showed that there was no growth in GDS hotel bookings in 2011, while non-GDS bookings saw growth.

• Declining audience - GDS mostly catches the corporate traveler segment, but business travel growth is slowing. Businesses use travel agencies to book hotels and air travel, which a GDS is good at catching. But after tough economic times, a company would rather solicit one hotel chain to gain leverage in negotiating lower rates.

• Controversy- Many airlines have rallied against GDS’s, claiming that the fees are unreasonable.

GDS Future Ahead

• GDSs were originally created as automated booking systems for airlines. Since its conception, the GDS has gone through many changes and has faced some serious threats along the way. In response, GDS firms have evolved through the setbacks and refined their products accordingly.

• GDS firms are constantly working toward creating better, more practical solutions for their customers.

• As the industry becomes more collaborative and more inclusive, so does the technology. Some GDS firms are recognizing the need to include non-GDS, independent hotels in their searches in order to offer a better range of choices.

Thank You!