Amadeus vs Travelport vs Sabre: Explaining Main Global Distribution Systems

Summary

This video explores the significant shift of Southwest Airlines, the largest low-cost carrier, as it joins the global distribution systems (GDS) market after years of exclusivity on its website. It highlights the vital role of GDS in connecting airlines, travel agencies, and customers, focusing on the three major players: Sabre, Amadeus, and Travelport. The video also discusses the importance of APIs for travel data integration and the emerging New Distribution Capability (NDC) standard that allows airlines to set their own distribution policies. Ultimately, it underscores the continued relevance of GDS in the travel industry.

Takeaways

• ✈️ Southwest Airlines is the world's largest low-cost carrier and the third largest airline in the U.S.
• 🔗 This year, Southwest Airlines has made its content available on all three major global distribution systems (GDS): Sabre, Amadeus, and Travelport.
• 📉 For years, Southwest avoided GDSs to maintain control over ticket sales, impacting its potential revenue from corporate travel.
• 💼 Business travel accounts for about 75% of an airline's profit, making connections with GDSs essential for maximizing sales.
• 🌍 GDSs connect providers with end customers and serve as primary inventory suppliers for travel agencies and managers.
• 📊 The big three GDSs—Sabre, Amadeus, and Travelport—share 98% of the market, each with unique strengths in geography and inventory size.
• 📱 APIs play a crucial role in how data is exchanged and utilized by travel agencies, allowing for rich content on booking websites.
• 💰 The introduction of New Distribution Capability (NDC) by IATA allows airlines to create their own distribution policies and reduce reliance on GDSs.
• 📝 Travel agencies must undergo specific steps to get GDS access, including obtaining IATA or ARC certification and completing training.
• 🛠️ GDSs are vital not only for ticket distribution but also for providing software tools to various stakeholders in the travel industry.

Q & A

What significant change did Southwest Airlines make in 2023 regarding its ticket distribution?

Southwest Airlines began putting its content on all three major global distribution systems (GDS), allowing for broader access to its ticketing beyond just its official website.

Why did Southwest Airlines initially avoid using GDS for ticket distribution?

Southwest sought to control its ticketing and sales processes, fearing that using GDS would result in losing control over how its data was displayed and reduce potential ancillary sales.

What is the primary role of global distribution systems in the travel industry?

GDS connect travel providers with end customers, serving as the main inventory suppliers for online and offline travel agencies and business travel managers.

What percentage of the market share do the three major GDS—Sabre, Amadeus, and Travelport—hold?

The three major GDS hold 98% of the market share in travel distribution.

How does the inventory size and geographic focus influence a travel agency's choice of GDS?

Travel agencies typically choose a GDS based on the inventory size and geographic coverage that best meet their needs for selling flights to specific regions.

What are the primary advantages of direct sales for airlines?

Direct sales allow airlines to avoid commission payments and maintain control over customer relationships, leading to potentially higher profit margins.

What is the significance of the New Distribution Capability (NDC) introduced by IATA?

NDC allows airlines to bypass GDS rules and create their own distribution policies, enabling them to connect directly with OTAs and retain more control over their sales.

How do GDS systems facilitate the integration of travel data for agencies?

GDS systems provide APIs that enable travel agencies to request and receive various data types, enriching their booking platforms with functionality like availability searches and ticketing.

What are the key steps a travel agency must follow to gain GDS access?

To gain GDS access, a travel agency must apply for IATA or ARC certification, complete training, sign a contract, and establish unique agreements with key suppliers.

What types of travel products do GDS aggregate beyond airline tickets?

GDS aggregate information on hotel accommodations, car rentals, rail tickets, and ferry tickets, providing a comprehensive inventory for travel agencies.