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GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
GDS Systems Overview
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GDS Systems Overview

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An overview of the development of the major GDS systems like Amadeus, Galileo, Sabre and Worldspan, the airline distribution model and the future of those systems.

An overview of the development of the major GDS systems like Amadeus, Galileo, Sabre and Worldspan, the airline distribution model and the future of those systems.

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  • That's an awesome presentation... Really love to learn about GDS programs,... If you can send me a copy at my email : imdstar123@gmail.com (that will be a great help), In return you can ask me for any good things you are interested to learn, Because I have a huge data of learning almost lots of things... Thanks
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  • This was very interesting, thanks. Could you email me a PDF Copy please aldob85@gmail.com
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  • Very useful presentaion, Can I have a copy , even in PDF format? abdofawzy@gmail.com
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  • Hello, Your presentation is very good...
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  • Very interesting would you please send me a copy ? Much appreciate mauricio.pucci@educationhify.com
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  • *CRS staat voor Computerised Reservation System. De term GDS wordt ook wel gebruikt. Deze staat voor Global Distribution System.
  • Transcript

    • 1. Global Distribution Systems (GDS) An overview
    • 2. From Lazy Susan to Login Susan!
    • 3. World Travel Market
    • 4. Regional booking differences
    • 5. How it was….. <ul><li>Travelers went automatically to a travel agent for a ticket </li></ul><ul><li>Travel agents then phoned the airline about a specific flight on a specific date </li></ul><ul><li>Fares were the same on each flight with each airline </li></ul><ul><li>Reservations staff retrieved index-card for that flight/date from a Lazy Susan (revolving tray with index cards) </li></ul><ul><li>Sometimes they had to view a reservations board with binoculars! </li></ul><ul><li>Then the travel agents request could be answered! </li></ul>
    • 6. Then….. <ul><li>On a certain day on a certain flight two persons met by chance: </li></ul><ul><li>Mr. Smith from American Airlines (AA) </li></ul><ul><li>Mr. Smith from IBM </li></ul><ul><li>Result: Plan to automate the AA reservation process with the help of IBM hard- and software </li></ul><ul><li>Result: SABRE (Semi Automatic Business Reservations Environment) </li></ul>
    • 7. Timeline GDS <ul><li>50’s: Airline Reservation Centers get first terminals </li></ul><ul><li>60’s: First CRS Terminals in Travel Agencies </li></ul><ul><li>70’s: Dumb Terminals become CRS </li></ul><ul><li>80’s: CRS become GDS </li></ul><ul><li>90’s: Ownership Change: Airlines divest their GDS </li></ul><ul><li>90’s: Rise of direct sales through Internet </li></ul><ul><li>00’s: GDS facing new entrants, Airlines reclaim the ownership of the channell, Low Cost Carriers, New business models, … </li></ul><ul><li>So let&apos;s start with some history </li></ul>
    • 8. Global Distribution Systems <ul><li>Formerly known as CRS: </li></ul><ul><li>Computer Reservation System </li></ul><ul><li>Now GDS: Global Distribution Systems </li></ul><ul><li>Name change because of function change: </li></ul><ul><li>Airline Reservations  All Travel Services </li></ul>
    • 9. Main Functions <ul><li>Reservations: PNR (Passenger Name Record = booking file containing all relevant reservation data) </li></ul><ul><li>Back-office integration </li></ul><ul><li>Management Info: </li></ul><ul><ul><li>Yield Management </li></ul></ul><ul><ul><li>Market Information Data Transfer (MITD) </li></ul></ul>
    • 10. Features of a GDS <ul><li>Start with the request for a flight </li></ul><ul><li>Look into database for flight availablility </li></ul><ul><li>Check fare </li></ul><ul><li>Making of a PNR (Passenger Name Record): </li></ul><ul><ul><ul><li>Itinerary – Name – Contact (Phone) – Ticketing – Received from – Fare - SSR/OSI – Seat </li></ul></ul></ul><ul><ul><ul><li>Red = Mandatory </li></ul></ul></ul><ul><li>Issue of Tickets (Traditional or E-Ticket) </li></ul>
    • 11. Development User Interface <ul><li>Start: Dumb Terminals (Workstation) </li></ul><ul><li>Now: Intelligent Terminals (= PC) </li></ul><ul><ul><li>Expert Mode (Like Focalpoint Galileo) </li></ul></ul><ul><ul><li>GUI (Like Viewpoint Galileo, Amadeus Vista) </li></ul></ul>
    • 12. GDS Display: Galileo Expert mode
    • 13. GDS Display: Galileo GUI-Mode
    • 14. Connectivity <ul><li>Several levels of connectivity (low to high): </li></ul><ul><li>Request from agency is relayed via GDS to airlines, which sends a message back </li></ul><ul><li>Request is chanelled through GDS direct into airline’s own system and seat is allocated at end of transaction </li></ul><ul><li>Request is chanelled through GDS direct into airline’s system and seat is allocated immediately </li></ul>The higher the level, the more the vendor has to pay the GDS
    • 15. GDS: History (1) <ul><li>Originally: Lazy Susans </li></ul><ul><ul><li>Request and Report </li></ul></ul><ul><ul><li>and/or Sell and Report </li></ul></ul><ul><li>1950’s: Internal airline systems </li></ul><ul><ul><li>Host: airline owner of a CRS </li></ul></ul><ul><ul><li>Co-hosting: Selling space on own system to other airlines </li></ul></ul><ul><li>1960’s: Entrance to travel agencies: CRS </li></ul>
    • 16. Lazy Susans
    • 17. GDS History (2) <ul><li>End Eighties: Including other services: ferries, cars, hotels, theatres, tours; </li></ul><ul><li>Name change into GDS </li></ul><ul><li>Four main systems: </li></ul><ul><li>Amadeus – Galileo – Sabre – Worldspan </li></ul><ul><li>Regional Systems: </li></ul><ul><li>Abacus – Infini – Gemini - .... </li></ul><ul><li>1990’s: Dehosting: Airlines sell their share in GDS </li></ul>
    • 18. GDS History (3): Founding Airlines
    • 19. GDS History (4) <ul><li>Ownership now: </li></ul><ul><li>Amadeus: LH, AF and IB (together 45,76%), Management 2,08%, Venture Capital 52,16% </li></ul><ul><li>Galileo: Travelport (Hotels, Car Rental, Hotels, Real Estate, ICT) </li></ul><ul><li>Sabre: Publicly Owned </li></ul><ul><li>Worldspan: Travelport (Hotels, Car Rental, Hotels, Real Estate, ICT) </li></ul>
    • 20. Market shares (4 main systems) 2006 45.104 11% Worldspan 119.546 23% Sabre 115.454 24% Galileo 93.147 26% Amadeus Terminals Agencies GDS
    • 21. Halo and Horn-effect
    • 22. Halo and Horn Effect <ul><li>Halo Effect: </li></ul><ul><li>The extra business an agency gives the airline that owns the GDS system it uses, above what that airline might expect to get based on it&apos;s share of the overall market. </li></ul><ul><li>Horn Effect: </li></ul><ul><li>When something is wrong with a (small) part of the system, a lot of agencies then think the whole system is wrong </li></ul>
    • 23. GDS and Internet <ul><li>Internet gave rise to alternative booking channels </li></ul><ul><li>1983: 88% of all PNR’s through GDS </li></ul><ul><li>2002: Only 53% </li></ul><ul><li>Some reasons: </li></ul><ul><ul><li>Costs (Internet instead of dedicated lines) </li></ul></ul><ul><ul><li>Ease of usec (Graphical interface) </li></ul></ul>
    • 24. Sources of GDS-Revenue: <ul><li>Booking fee’s from airlines: </li></ul><ul><ul><li>Per segment USD 4.48 (Sabre, 2003) </li></ul></ul><ul><ul><li>Per ticket average USD 12.-! </li></ul></ul><ul><ul><li>Also fees for cancellations (50% of bookings!) </li></ul></ul><ul><li>Traffic Fee’s (each inquiry costs the airline money) </li></ul><ul><li>Subscriptions from agencies </li></ul><ul><ul><li>However: “productivity bonusses” back to agancies </li></ul></ul><ul><li>Sale of Management Data (MIDT) </li></ul><ul><li>Hosting inventory other airlines </li></ul><ul><li>Advertising and other additional services </li></ul><ul><li>Booking Fees most important! </li></ul>
    • 25. Position Vendors (Airlines): <ul><li>Vendors pay for both looking and booking </li></ul><ul><li>Huge commissions to pay to GDS </li></ul><ul><li>Looking for ways to bypass GDS: </li></ul><ul><ul><li>USA: Orbitz </li></ul></ul><ul><ul><li>EUR: Opodo </li></ul></ul><ul><ul><li>Internet based systems, owned by airlines, that consumers can use from their own PC without having to use the GDS and/or agency </li></ul></ul><ul><li>Agencies receive large kick-backs from GDS’s: Airlines claim why not lower the booking fees instead? </li></ul>
    • 26. Relation GDS and Airlines <ul><li>GDS charge airlines for looking and booking </li></ul><ul><li>Airlines pay huge commissions to GDS </li></ul><ul><li>Agencies receive large kick-backs from GDS’s: Airlines claim why not lower the booking fees instead? </li></ul><ul><li>Airlines are (since selling their shares in GDS) looking for cheaper alternatives, made possible by new technologies (internet based): </li></ul><ul><li>ORBITZ and OPODO </li></ul>
    • 27. Prices charged by GDS to Airlines
    • 28. More Traffic, Lesser Yield
    • 29. Situation Airline Industry
    • 30. State of the Industry (Chapter 11 = Broke)
    • 31. Alternatives
    • 32. Airline want to get that share!
    • 33. Airline Strategies
    • 34. Traditional Travel Distribution Chain VENDORS TOUROPERATORS TRAVEL AGENCIES TRAVELLERS (Leisure – Corporate)
    • 35. New Travel Chain ( @ = E Commerce ) VENDORS TOUROPERATORS TRAVEL AGENCIES TRAVELLERS (Leisure – Corporate) @ @ @ @ @
    • 36. New Business Models <ul><li>Thanks to ICT there new business models are possible </li></ul><ul><li>Reverse auctions: Hotwire </li></ul><ul><li>Customer names his price: Priceline </li></ul><ul><li>Virtual Agencies: Expedia </li></ul><ul><li>Multi channeling: Clicks, Bricks &amp; Mortar and Calls: </li></ul><ul><ul><li>Clicks (E-commerce) </li></ul></ul><ul><ul><li>Bricks and Mortar (Traditional agency) </li></ul></ul><ul><ul><li>Calls (Call-centers) </li></ul></ul>
    • 37. Hotwire: Inventory Regulation Founded by: American America West Continental Hawaiian Northwest United US Airways
    • 38. Most Popular Travel Sites
    • 39. GDS Regulation (1) <ul><li>Before 1984: Systems not allowed to discriminate against each other, other airlines and agencies </li></ul><ul><li>However: Biased display </li></ul><ul><ul><li>Own airline was favoured (1st lines on 1st screen) </li></ul></ul><ul><ul><li>Reason: Agencies book almost always the first flight from the first screen </li></ul></ul>
    • 40. GDS Regulation (2) <ul><li>1992: New set of rules (both in US and EU): </li></ul><ul><ul><li>Neutral Display based on departure time and connection (direct flights first) </li></ul></ul><ul><ul><li>No favours for hosts </li></ul></ul><ul><ul><li>Participation in systems open to all airlines </li></ul></ul><ul><ul><li>Free choice for travel agencies </li></ul></ul>
    • 41. GDS Deregulation <ul><li>2003/2004: </li></ul><ul><ul><li>Airlines and GDS can now deal with each other seperately </li></ul></ul><ul><ul><li>Result: Airline ‘X’ only in system ‘B’ </li></ul></ul><ul><ul><li>Discrimination with Opodo/ Orbitz: Only the best fares in those systems </li></ul></ul><ul><ul><li>Danger of bypassing GDS by both agencies and consumers </li></ul></ul><ul><ul><li>In favour of dominant carriers </li></ul></ul>
    • 42. Effects on GDS’s <ul><li>New revenue models: Supplier of IT-services, e-commerce technology </li></ul><ul><li>De-list smaller vendors (because they do not generate enough revenue) </li></ul><ul><li>Third party agreements for additional services </li></ul>
    • 43. Effects on Airlines <ul><li>To buy preferred position in systems </li></ul><ul><li>Downward price pressure on GDS’s by large airlines </li></ul><ul><li>Smaller and regional carriers possibly switch to internet </li></ul><ul><li>MIDT value will become less </li></ul>
    • 44. Effects on Agencies <ul><li>Fragmented info will be an opportunity to become data aggregators </li></ul><ul><li>Need for tools for multiple GDS capability </li></ul><ul><li>Some GDS’s may leverage their unique ownership position: Traveport owns Galileo, Worldspan and other industry players like hotels, agencies, car-rentals etc. </li></ul><ul><li>Higher costs will be levied upon final customer </li></ul><ul><li>GDS booking rewards will likely disappear: loss of revenue </li></ul>
    • 45. Reaction of GDS’s <ul><li>Own Internet Booking Sites: </li></ul><ul><ul><li>Travelocity, The Trip, Hotwire, ... </li></ul></ul><ul><li>As Booking Engine behind other sites like Expedia </li></ul><ul><li>Additional Services: </li></ul><ul><ul><li>Corporate Travel Booking Tools </li></ul></ul><ul><ul><li>Agency Booking tools, Web-presence </li></ul></ul>
    • 46. GDS New Entrants: GNE’s <ul><li>New companies claim they can replace GDS: </li></ul><ul><li>Farelogix </li></ul><ul><li>G2 Switchworks </li></ul><ul><li>ITA Software </li></ul><ul><li>GNE’s are sometimes also called: </li></ul><ul><li>Alternative Content Access Platforms (ACAP) </li></ul>
    • 47. G2 Switchworks
    • 48. Costs GDS vs. GNE&apos;s
    • 49. Barriers for GNE’s <ul><li>Agencies rely heavy on GDS kick-backs since airlines capped/cut commissions </li></ul><ul><li>Switching costs for agencies (equipment, training, back-office integration) can remain a barrier for GNE’s </li></ul><ul><li>However: United Airlines (member Star Alliance) considers paying agencies a USD 5.- bonus for each booking made through a GNE! </li></ul><ul><li>No car and hotel at the moment </li></ul><ul><li>No worldwide coverage yet </li></ul>
    • 50. Chances for GNE’s <ul><li>Possibility to make distribution more competitive (breaking oligopoly of GDS’s) </li></ul><ul><li>Direct link to airline inventory </li></ul><ul><li>Need for airlines to cut costs (Distribution costs 20% of total costs and are the only costs that can be most easily controlled) </li></ul><ul><li>Star Alliance is investigating GNE’s/ACAP’s (they spend each year USD 2 Bln. on GDS fees) </li></ul><ul><li>Agencies get access to all fares (public and web-fares!) </li></ul><ul><li>Desktop not longer controlled by GDS’s </li></ul>
    • 51. Reaction GDS
    • 52. Preferred Booking Channels <ul><li>Airlines have now the right to decide if they want to be present in a GDS and also have the option to decide the participation level (meaning supplying all available fares, schedules and inventory) </li></ul><ul><li>This is called Preferred- or Competitive Booking Channels </li></ul><ul><li>Through such a channel the airline pays less to a GDS </li></ul><ul><li>July 2006: Major US Airlines will start charging users (agencies and corporates) a booking fee of USD 3.50 per segment, which are booked through &apos;non preferred booking channels&apos; </li></ul>
    • 53. Reason for Preferred Channels <ul><li>Airlines maintain control of the distribution model </li></ul><ul><li>Reduction of GDS fees </li></ul><ul><li>Shift of cost of GDS-distribution from supplier to subscriber </li></ul>
    • 54. Reaction GDS <ul><li>Alle major GDS are now offering their clients (agencies and corporate clients) special &apos;Opt-in Programs &apos; that protect them from paying a booking fee </li></ul><ul><li>Three types of subscriptions: </li></ul><ul><ul><li>Opt-in 1: Full content, no segment fee </li></ul></ul><ul><ul><li>Opt-in 2: Full content, segment fee </li></ul></ul><ul><ul><li>No opt-in: Regulated content, service fee </li></ul></ul><ul><li>Difference between those programs are the subscription costs </li></ul>
    • 55. New GDS arrangements without fees <ul><li>Sabre Efficient Access Solution </li></ul><ul><li>Galileo Content Continuity Program </li></ul><ul><li>Worldspan Super Access Product </li></ul><ul><li>Amadeus (no name) </li></ul><ul><li>Two new entrants: </li></ul><ul><li>G2 Switchworks </li></ul><ul><li>Farelogix </li></ul>
    • 56. GDS and the Lowcost Carriers (LCC) <ul><li>GDS do not have the inventory and fares of the LCC </li></ul><ul><li>LCC sell almost exclusively (and succesfully!) through their own websites </li></ul><ul><li>LCC feel they do not need the GDS </li></ul><ul><li>However, if they want to penetrate the corporate market, maybe they have to </li></ul>
    • 57. GDS and LCC <ul><li>Amadeus introduced in 2006 Amadeus Ticketless Access </li></ul><ul><li>This enables LCC (Low Cost Carriers) to participate in GDS </li></ul><ul><li>Third Party solutions: Solores, … </li></ul>
    • 58. Solores Features <ul><li>Cross GDS content </li></ul><ul><li>Airline content via Direct Connect </li></ul><ul><li>Low-cost carrier content </li></ul><ul><li>Consolidator net fare content </li></ul><ul><li>Charter content </li></ul><ul><li>Web-fare content </li></ul><ul><li>XML interface </li></ul>
    • 59. Solores
    • 60. Questions

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