what is a GDS?

Here in D Airfare we will often mention the term GDS (Global Distribution System).

GDSs are large companies with sophisticated computing systems. Their computing networks supply real-time information on airfares, tickets and reservations from the airlines the GDSs have distribution agreements with. GDSs customers can access the systems and check, book and purchase tickets.

GDSs do not sell to the end consumer. Its clients are other companies that do have the travellers as their end client. GDSs are, therefore, intermediaries between the airlines and the agencies that sell tickets to the consumers. GDSs make their profit from the commissions they charge airlines and/or customers.

There are several GDS. The best known are Amadeus and Sabre. Each one has their own followers and critics, and although they often work with similar fares, the end price they charge is not always identical.

The relationship between airlines and GDS has known better times. Lately, airlines have invested on the development of their own websites, to reduce their dependency from GDSs. The problem is that GDSs can still do things a single airline cannot, such as combining tariffs from different airlines to issue a ticket.

Some companies have created additional taxes for tickets issued through certain GDSs, in an attempt to favour their own websites or GDSs with which they have more favourable agreements.

The truth is that GDSs have become very lucrative businesses and the airlines have become quite dependent on them. Today GDSs book and sell, not only airline tickets, but car rental packages and hotel rooms.

To access a GDS you need to have a commercial agreement with its operator. Travel agents pay to access GDSs, although depending on the amount of business they conduct, they can get discounts or the use of the service for free.

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Tags: Amadeus, GDS, Sabre

Category: airfares