GlobalDistributionSystems(GDS)AnoverviewFromLazySusantoLoginSusan!WorldTravelMarketRegionalbookingdifferencesHowitwas…..•Travelerswentautomaticallytoatravelagentforaticket•Travelagentsthenphonedtheairlineaboutaspecificflightonaspecificdate•Fareswerethesameoneachflightwitheachairline•Reservationsstaffretrievedindex-cardforthatflight/datefromaLazySusan(revolvingtraywithindexcards)•Sometimestheyhadtoviewareservationsboardwithbinoculars!•Thenthetravelagentsrequestcouldbeanswered!Then…..•Onacertaindayonacertainflighttwopersonsmetbychance:•Mr.SmithfromAmericanAirlines(AA)•Mr.SmithfromIBM•Result:PlantoautomatetheAAreservationprocesswiththehelpofIBMhard-andsoftware•Result:SABRE(SemiAutomaticBusinessReservationsEnvironment)TimelineGDS•50’s:AirlineReservationCentersgetfirstterminals•60’s:FirstCRSTerminalsinTravelAgencies•70’s:DumbTerminalsbecomeCRS•80’s:CRSbecomeGDS•90’s:OwnershipChange:AirlinesdivesttheirGDS•90’s:RiseofdirectsalesthroughInternet•00’s:GDSfacingnewentrants,Airlinesreclaimtheownershipofthechannell,LowCostCarriers,Newbusinessmodels,…Solet'sstartwithsomehistoryGlobalDistributionSystems•FormerlyknownasCRS:•ComputerReservationSystem•NowGDS:GlobalDistributionSystems•Namechangebecauseoffunctionchange:•AirlineReservationsAllTravelServicesMainFunctions•Reservations:PNR(PassengerNameRecord=bookingfilecontainingallrelevantreservationdata)•Back-officeintegration•ManagementInfo:–YieldManagement–MarketInformationDataTransfer(MITD)FeaturesofaGDS•Startwiththerequestforaflight•Lookintodatabaseforflightavailablility•Checkfare•MakingofaPNR(PassengerNameRecord):Itinerary–Name–Contact(Phone)–Ticketing–Receivedfrom–Fare-SSR/OSI–SeatRed=Mandatory•IssueofTickets(TraditionalorE-Ticket)DevelopmentUserInterface•Start:DumbTerminals(Workstation)•Now:IntelligentTerminals(=PC)–ExpertMode(LikeFocalpointGalileo)–GUI(LikeViewpointGalileo,AmadeusVista)GDSDisplay:GalileoExpertmodeGDSDisplay:GalileoGUI-ModeConnectivitySeverallevelsofconnectivity(lowtohigh):1.RequestfromagencyisrelayedviaGDStoairlines,whichsendsamessageback2.RequestischanelledthroughGDSdirectintoairline’sownsystemandseatisallocatedatendoftransaction3.RequestischanelledthroughGDSdirectintoairline’ssystemandseatisallocatedimmediatelyThehigherthelevel,themorethevendorhastopaytheGDSGDS:History(1)•Originally:LazySusans–RequestandReport–and/orSellandReport•1950’s:Internalairlinesystems–Host:airlineownerofaCRS–Co-hosting:Sellingspaceonownsystemtootherairlines•1960’s:Entrancetotravelagencies:CRSLazySusansGDSHistory(2)•EndEighties:Includingotherservices:ferries,cars,hotels,theatres,tours;•NamechangeintoGDS•Fourmainsystems:Amadeus–Galileo–Sabre–Worldspan•RegionalSystems:•Abacus–Infini–Gemini-....•1990’s:Dehosting:AirlinesselltheirshareinGDSGDSHistory(3):FoundingAirlinesGDSHistory(4)•Ownershipnow:•Amadeus:LH,AFandIB(together45,76%),Management2,08%,VentureCapital52,16%•Galileo:Travelport(Hotels,CarRental,Hotels,RealEstate,ICT)•Sabre:PubliclyOwned•Worldspan:Travelport(Hotels,CarRental,Hotels,RealEstate,ICT)Marketshares(4mainsystems)2006GDSAgenciesTerminalsAmadeus26%93.147Galileo24%115.454Sabre23%119.546Worldspan11%45.104HaloandHorn-effectHaloandHornEffect•HaloEffect:TheextrabusinessanagencygivestheairlinethatownstheGDSsystemituses,abovewhatthatairlinemightexpecttogetbasedonit'sshareoftheoverallmarket.•HornEffect:Whensomethingiswrongwitha(small)partofthesystem,alotofagenciesthenthinkthewholesystemiswrongGDSandInternet•Internetgaverisetoalternativebookingchannels•1983:88%ofallPNR’sthroughGDS•2002:Only53%•Somereasons:–Costs(Internetinsteadofdedicatedlines)–Easeofusec(Graphicalinterface)SourcesofGDS-Revenue:•Bookingfee’sfromairlines:–PersegmentUSD4.48(Sabre,2003)–PerticketaverageUSD12.-!–Alsofeesforcancellations(50%ofbookings!)•TrafficFee’s(eachinquirycoststheairlinemoney)•Subscriptionsfromagencies–However:“productivitybonusses”backtoagancies•SaleofManagementData(MIDT)•Hostinginventoryotherairlines•Advertisingandotheradditionalservices•BookingFeesmostimportant!PositionVendors(Airlines):•Vendorspayforbothlookingandbooking•HugecommissionstopaytoGDS•LookingforwaystobypassGDS:–USA:Orbitz–EUR:Opodo–Internetbasedsystems,ownedbyairlines,thatconsumerscanusefromtheirownPCwithouthavingtousetheGDSand/oragency•Agenciesreceivelargekick-backsfromGDS’s:Airlinesclaimwhynotlowerthebookingfeesinstead?RelationGDSandAirlines•GDSchargeairlinesforlookingandbooking•AirlinespayhugecommissionstoGDS•Agenciesreceivelargekick-backsfromGDS’s:Airlinesclaimwhynotlowerthebookingfeesinstead?•Airlinesare(sincesellingtheirsharesinGDS)lookingforcheaperalternatives,madepossiblebynewtechnologies(internetbased):•ORBITZandOPODOPriceschargedbyGDStoAirlinesMoreTraffic,LesserYieldSituationAirlineIndustryStateoftheIndustry(Chapter11=Broke)AlternativesAirlinewanttogetthatshare!AirlineStrategiesTraditionalTravelDistributionChainVENDORSTOUROPERATORSTRAVELAGENCIESTRAVELLERS(Leisure–Corporate)NewTravelChain(@=ECommerce)VENDORSTOUROPERATORSTRAVELAGENCIESTRAVELLERS(Leisure–Corporate)@@@@@NewBusinessModels•ThankstoICTtherenewbusinessmodel