Tech, ExplainedE-commerce, travel and logistics
Product

Global distribution system (GDS)

The network carrying every airline's seats.

BEFORE ITAFTER ITGlobal distributionsystem (GDS)AmadeusSabre Corp.COVERSFaresSeat countsPNRBooking feePassenger servicesystem (PSS)sendsfares andseat countsChannel manager↗ HOTEL TECHNOLOGYsendsroom pricesreturns faresand seatsOnline travel agency (OTA)returns faresto agentsB2B travel portalbookscompany tripsTravel managementcompany (TMC)CONCEPTS IT USESMultichannel inventory managementBEFORE ITAFTER ITGlobal distributionsystem (GDS)AmadeusSabre Corp.COVERSFaresSeat countsPNRBooking feePassenger servicesystem (PSS)sendsfares andseat countsChannel manager↗ HOTEL TECHNOLOGYsendsroom pricesreturns faresand seatsOnline travelagency (OTA)returns faresto agentsB2B travel portalbookscompany tripsTravel managementcompany (TMC)CONCEPTS IT USESMultichannel inventory managementBEFORE ITPassenger service system (PSS)↓ sends fares and seat countsChannel manager↗ HOTEL TECHNOLOGY↓ sends room pricesGlobal distribution system (GDS)AmadeusSabre Corp.FaresSeat countsPNRBooking feeAFTER IT↓ returns fares and seatsOnline travel agency (OTA)↓ returns fares to agentsB2B travel portal↓ books company tripsTravel management company (TMC)CONCEPTS IT USESMultichannel inventory management
The global distribution system receives seat counts and fares from airlines' passenger service systems and room prices from channel managers, and sends them to travel sites, agents' portals and travel management companies.
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A global distribution system (GDS) is a network that connects airlines, hotels and car rental companies to the travel agents and travel sites that sell their seats and rooms. Amadeus and Sabre run the two largest. When a travel agent searches for a flight, the fares and the free seats usually come from a GDS.

The GDS exists because one agent cannot connect to hundreds of airlines, and one airline cannot connect to thousands of agents. Each airline connects once to the GDS. Each agent connects once too. The GDS passes each search to the airlines and each answer back to the agent.

Each airline sends the GDS its schedules, its fares and the number of seats left in each fare class. A fare class is a group of seats sold at one price with one set of rules, such as a cheap fare that cannot be refunded. When a seat is sold anywhere, the airline's passenger service system (PSS) updates its count, and the GDS shows the new count to everyone.

Consider a corporate travel agent in Ahmedabad. A client needs to fly to Singapore next Wednesday. The agent types one search on the GDS screen. The GDS returns flights from four airlines, some direct from Mumbai and some with a change in Delhi. The agent chooses a ₹31,500 fare. The GDS sends the booking to the airline's PSS. The PSS reduces the seats in that fare class by one and creates a passenger name record (PNR), the six-character code that identifies the booking. The GDS keeps a copy of the same PNR, so the agent can change or cancel the booking later. The airline then pays the GDS a fee for that booking.

Travel sites use the same network. An online travel agency and a B2B travel portal send thousands of searches a second. Companies book through it as well, through corporate travel management software and travel management companies. Hotels reach the GDS through a channel manager, which sends each room's price and availability to every site.

Airlines pay a GDS fee on every booking, and the GDS shows the same filed fare to every agent. This is why many airlines now prefer to sell through NDC, a newer standard. Through NDC, the airline builds its own offer and prices it for each customer. The GDS companies now carry NDC offers too. India's low-cost airlines have long sold most of their tickets directly, through their own websites and apps, and through their own connections to travel sites.

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