Posts Tagged 'GDS'

Airlines vs. GDS vs. Online Travel Agencies

Have you ever wondered:

  • why some airlines can be found on online travel sites, while others can’t?
  • why some airlines provide their cheapest fares only on their own websites?
  • why all airlines are marketing their own website on every occasion they can?
  • why airlines mention GDS costs among their biggest expenditures?

Check out this video from by Farelogix, that is a great summary of the current battle between airlines, online travel agencies and GDSs.

by balint01

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Amadeus Turns 20

amadeus logo  Amadues 20 Anniversary Logo

The largest European based GDS (Global Distribution System), Amadeus has just turned 20 years old a week ago, as it was officially established 21OCT1987 by four European Airlines: Iberia, Air France, Lufthansa and SAS. The four airlines wished to create a European GDS by merging their own computer reservation systems. The basis of the new GDS was System One, an existing US reservation system.

Within a year they have opened their headquarters in Madrid, Spain, their development center in Nice, France, and have started construction on the new Data Center, in Erding, Germany. In 1989 they have launched AmadeusPro to allow travel agents to book flights through neutral screens, while already 11 airlines were Amadeus users. One year later the Erding Data Center opened, which costed $200 million altogether, and was capable of handling 150 million transactions in the first year. 1991 saw 45.000 terminals being connected to Amadeus, while in 1992 the new Amadeus GDS was launched with the first PNR being booked for Mr. Wolfgang Amadeus. In the first year 70 million bookings were created. 1993 saw more than 10 million bookings each month, as well as 60% of European Travel Agencies were connected to 1A (1A is the two letter IATA code of Amadeus GDS). In 1994 Austrian Airlines joined the distribution system as the 100th airline selling through Amadeus. One year later Amadeus fully acquired System One from Continental Airlines, thus becoming the largest GDS in terms of travel agency locations. In 1996 www.amadeus.net was launched, while bookings topped 309 million. Only about 50% of old System One users accepted the forced migration to Amadeus. In 1997 Amadeus celebrated its 10 year anniversary, while serving 32% of the travel agency market worldwide, and the first Amadeus powered travel website was also launched by Icelandair.

In 1998, the first year of their second decade, they launched the SAP Travel Management tool, which is fully integrated with SAP’s finance and HR modules, and their data center handled one million transactions in a single day for the first time. By 1999, around 80 airlines and 3000 travel agencies rely on 1A e-commerce solutions, and this is the year, when 1A launches the world’s first neutral Electronic Ticketing solution: the Amadeus E-Ticket Server (ETS). In 2000 and 2001 Amadeus lays down the plans for the coming years, by starting development on Vista (a browser based version of their reservation system), on new Inventory and Departure Control Systems (for British Airways and Qantas as the first customers), as well as announcing the new Altéa Customer Management Solution. In 2003 the annual number of bookings passes the 400 million mark, while new airlines launch their websites based on 1A, among them bmi and Qantas. In 2005 Amadeus shifts its “identity” to become “Your Technology Partner”, and repositions itself as a leading Airline IT service provider. To support this change, they win a major contract to support the Star Alliance with a new Common IT Platform for all member airlines. Last year Amadeus handled 499 million bookings, and by 2007 they provide 192 airlines with their e-Ticketing. This year they have launched MoneyDirect as a Joint Venture with Sabre.

As the leading Airline IT provider, they provide the capacity for common shared access to flight reservations and frequent flyer information to nearly 150 airlines as Amadeus Altéa Reservation airlines (formerly known as System User). Current Amadeus Altéa Reservation customers include:

  • 6 of the 11 oneworld airlines (55%)
  • 13 of the 21 Star Alliance airlines (61%)
  • 3 of the 10 SkyTeam airlines (30%)

And with the Common IT Platform for Star, this number will raise in the future. As we can see, in the first 18 years Amadeus focused on the travel agencies (and seems like they have won on that front being the leader on the market), and now they start to focus on Airlines. If they are as successful on this market as with the travel agencies, they may be the largest player in this field as well, within the next few years. It looks like they have started down the right path to do that.

http://www.amadeus.com/2020/

On the dedicated anniversary website you can find some more items besides the history of Amadeus, such as future plans, and thank you notes. They also added a fun “Personal Note for you” feature, with a personalized message, don’t miss that one, either!

We would also wish Amadeus a Happy 20th Birthday on behalf of AirlineWorld Blog!

by balint01

Amadeus And Sabre Launch Moneydirect

As Airlineworld has reported earlier, Amadeus and Sabre plan a joint venture to provide secure payment clearing and reconciliation service for non-air travel sales. Yesterday the two GDS (Global Distribution System) providers revealed some details about this new entity. In our previous article we have mentioned that the new joint venture required an antitrust approval from the European Commission, which they have received on 12SEP2007. The new solution called Moneydirect is based on an Amadeus product launched in Australia and New Zealand in 1998 already. It will focus on hotels, cruise lines, tour operators, car rental companies, ferries, railways, and travel intermediaries such as travel agencies and wholesalers.

James Filsinger, chief executive officer and general manager of Moneydirect, said operations, which are currently hosted in Australia, will move to Ireland, with subsidiary offices in Australia and the U.S. He said travel agencies can use Moneydirect to pass payments onto suppliers minus their commissions. They also can use it to schedule several payments to cruise and tour companies in installments.

Moneydirect logo

 

Moneydirect also will address currency issues, he said. For example, a U.S. travel agent who books a hotel in Australia might get a $10 check issued in Australian dollars 90 days later. Moneydirect will enable the hotel to transfer the amount immediately directly into the agency’s bank account. “Payment can go in either direction,” Filsinger said. “If a hotel company manages hotel commissions directly, it can use Moneydirect to pay agencies.”

He said the platform is flexible enough to handle transactions in which the agent has a net rate and can retain the markup when the customer’s credit card is charged the full price for a travel component. Any size agency, hotel or other travel company can use the product, he said. “Even a small company that provides scuba tours can use it, so it may open the door to some new content that wasn’t already available before,” he said.

Filsinger said the fee structure has not yet been finalized but will be transaction-based. “We have a fee model that ranges from 10 to 20 cents, depending on the type of transaction,” he said. Moneydirect will be GDS-independent, he said. The joint venture is looking at ways in which it can communicate with agencies’ back-office systems in an efficient manner.

In granted approval to the joint venture, the EC said it concluded that “the transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it. . .. There would be no horizontal or vertical overlaps between the activities of Moneydirect and its parent companies.”

The EC added that “this business is not closely related to the parties’ GDS business” and Amadeus and Sabre “have put in place structures to limit the information flows between Moneydirect and its parent companies.”

So Amadeus and Sabre has started on the road to provide an IATA BSP type of solution for travel agencies using their systems. The IATA BSP provides the same service of a general clearing house, but only in relation to air travel – between IATA member airlines and IATA member travel agencies selling those airlines’ tickets. Now the agencies (using Amadeus and Sabre reservation systems) will be able to take usage of similar services in relation with the other travel related content which they offer to their customers – their life will indeed be made much easier. Looking forward what will be the next cooperation between Amadeus and Sabre!

by balint01 (based on ATW News)

Worldspan Joins Galileo and Apollo at Travelport

Worldspan by Travelport Logo

According to the news today, Travelport, the parent company of Galileo and Apollo GDS platforms has completed its $1.4 billion (!) acquisition of Worldspan yesterday after the deal was given regulatory clearance by the European Commission, which concluded that the reduction of GDSs operating in the European Economic Area from four to three would be “unlikely to result in coordinated behavior” between the remaining GDSs. “The Commission has therefore concluded that the proposed transaction would not significantly impede effective competition within the EEA or a significant part of it,” it said. Galileo and Worldspan are the second- and fourth-largest GDSs respectively operating in the EU.

This move makes Travelport a dominant player in the field, by controlling three major GDS platforms. While Travelport has talked of potential synergies between Galileo and Worldspan, it also has indicated that it won’t merge the platforms. Galileo said that even if it thought forced migration was a good idea, “attempts to do this in the past by some of our competitor GDSs have shown that such a strategy would be likely to fail.” According to ATW News, that is likely a reference to Amadeus, which experienced some rocky moments 10 years ago when it acquired System One and forced to migrate its users to the Amadeus system. We will have to sit back and wait for a few months/years to see if this will really be the case. It would be also a possible solution for bigger cost-cutting that the three Travelport controlled GDSs do actually merge in the background, but will keep three UI’s and brand-names to keep the travel agencies and suppliers happy and not to force a migration. Galileo and Apollo are strong with travel agencies, while Worldspan has the extra value of having airline customers and products, and very good online tools. Worldspan also cooperates with SITA on electronic ticketing and ET hub solution for airlines for example. In the world of always improving airline websites and booking engines, a GDS needs to keep up a good online presence (which allows travel agencies to become online travel agencies), which Worldspan has been very good in. In Hungary there has been a major travel agency that only made the move from Galileo to Worldspan to enable itself to enter the online travel market.

Galileo will be enhanced by Worldspan’s online distribution technology platform, while Worldspan will benefit from Galileo’s expanded supplier base and expansive content,” Travelport GDS President and CEO Gordon Wilson said. “The complementary strengths of both companies will bring improved offerings for our agency and supplier customers, and we are particularly excited about the technology innovations and breadth of services we will be able to bring our suppliers and subscribers in the future.

Galileo and Worldspan produced more than 379 million combined air bookings in 2006 while operating in 145 countries and processing as many as 15,000 transactions per sec., according to Travelport. The combined company will serve 750 travel suppliers and 63,000 travel agencies.

by balint01


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