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The Four Global Distribution Systems in the Travel and Tourism Industry

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The Four Global Distribution Systems in the Travel and Tourism Industry Tourism the help of powerful internal Client/Server play their services directly in the travel economic and technological level and systems. As in the past, customers now go agents´ internal systems. This could suffi- travel agents would hardly be able to do back to calling the airline directly and pay ciently substitute the scope of services their work without these tools. On the other there and then with their credit card. This provided by CRSs and the cost of com- hand, however, because of the high costs aggressive procedure has forced many munication between the service provider incurred many providers avoid using this other airlines to also make direct reserva- and the travel agent can be reduced. How- consistent concept with its complicated tions and by-pass the CRSs. Some carri- ever, this would increasingly counteract functional requirements and worldwide ers, such as Swissair, have come to an the idea of creating a global electronic networks. Therefore, the CRSs are now at agreement with major travel agent chains market. a turning point. Either the systems adapt which then can make their reservations to the new market conditions or they will directly in the system of the respective Conclusion become an early example for the destruc- airline. Some of the major travel agents In short, it can be stated that on the one tion of the worldwide electronic markets. like American Express offer the possibil- hand the global computer reservation sys- ity to various airlines and hotels to dis- tems have reached a significantly high Fact File: and START in Germany, which were pre- dominantly controlled and (partly) owned The Four Global Distribution Systems in by the original four partner airlines, re- the Travel and Tourism Industry spectively, as well as integrating a number of other national systems of further air- by Karsten Kärcher – University of Strathclyde, Glasgow lines. Amadeus operated on its own net- work Amanet, on various national net- Background information on key electronic however, SAS sold its share to the other works and on the global SITA network, market systems (EMSs) in the global travel three due to financial difficulties follow- and, in 1994, claimed to have Europe’s and tourism industry is presented in this ing the Gulf War, leaving Amadeus equally largest civilian database. Since Amadeus’ fact file. The major travel and tourism owned by the other three airlines. The foundation, the operation and marketing EMSs portrayed are the four global distri- Amadeus Central System was based on the of the national Amadeus sub-systems have bution systems (GDSs) Amadeus, Galileo software of the reservation system Sys- been conducted mainly by > 30 national International, SABRE and Worldspan. The tem One and located in Erding near marketing companies (NMCs) such as historical (or evolutionary) development München in Germany. The system became START Amadeus Vertrieb GmbH in Ger- of the technologies of the four GDSs is operational in 1991, integrating the four many, and Amadeus Austria Marketing shown in Figure 1, indicating how the national reservation systems Esterel in Ges.mbH in Austria, with SAS having also technology of one GDS was based on an- France, Savia in Spain, Smart in Sweden remained a national partner. other. The Société Internationale de Télé- communications Aéronautiques (SITA) is ○○○○○○○○○○○○○○ also outlined, which supplied telecommu- Figure 1 Evolutionary Development Amadeus nication services to several of the GDSs of GDS Technology (1987)/1991 System One and other travel and tourism organisations. 1982 1994/95 Amadeus Global Travel Gallileo (1987)/1989 Distribution S.A. Madrid, Spain Apollo Gallileo 1971 International 1993 Amadeus DATAS II ○○○○○○○○○○○○ (Amadeus Central System 1982 PARS Worldspan and Amanet) 1964/(1976) 1990 Amadeus Global Travel Distribution was SABRE SABRE formed in 1987, with each of the four (1953)/1963 1964 European airlines Air France, Iberia, Present Lufthansa and SAS Scandinavian Airlines System owning equal shares. In 1991, 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 Years EM – Electronic Markets 20 Tourism Amadeus (Amadeus Central System and Amanet) Main National Distribution Systems (NDSs) Esterel, France Savia, Spain Smart, Sweden START, Germany System One, North and Middle America Main Marketing Subsidiaries Amadeus Austria Marketing Ges.mbH, Austria (founded in 1988; 25% 75% Lufthansa Commercial Holding GmbH (Deutsche Lufthansa AG)) Amadeus Marketing (UK) Limited, England 100% Amadeus Marketing S.A., Spain 100% Amadeus Marketing S.A.R.L., France 100% Amadeus START Polska Sp.z.o.o., Poland (24.5% Orbis S.A., Poland, and 51% 24.5% LOT Polish Airlines, Poland) START Amadeus Vertrieb GmbH, Germany (95% START Holding GmbH) 5% START Hellas S.A., Greece 100% START Hungaria Kft., Hungary 100% START Seyahat Pazarlama A.S., Turkey (formerly START Turkiye S.A.) 100% Information Technology Subsidiaries Amadeus Data Processing GmbH & Co. KG, Germany (29.2% Lufthansa 70.8% Commercial Holding GmbH (Deutsche Lufthansa AG)) Amadeus Development S.A., France 100% START Informatik GmbH, Germany (50% START Holding GmbH) 50% Shareholders Air France S.A., France 29.2% Continental Airlines, USA (Texas Air Group) 12.4% Deutsche Lufthansa AG, Germany (held via Lufthansa Commercial Holding 29.2% GmbH (LCH), Germany) Iberia Lineas Aéreas de España S.A., Spain 29.2% Galileo International (Galileo Central System an Galileo International Distribution Network) National Systems with Separate Names Apollo Travel Services, North America, Mexico and Japan Galileo Southern Cross, Australia (founded in 1988; 100% Ansett Australia Airlines and Australian Airlines) Galileo UK, United Kingdom (formerly Travicom, Maidenhead/Berkshire, which was developed in 1977 by BEA and BOAC, the predecessor organisations of British Airways PLC) Sigma Travel System, Italy Traviaustria, Austria Traviswiss, Switzerland (developed in 1985; included Travitel for smaller travel agencies) Shareholders Aer Lingus Irish Airlines, Ireland 0.10% Alitalia - Linee Aeree Italiane, Italy 8.71% Austrian Airlines ÷ sterreichische Luftverkehrs AG, Austria 0.10% British Airways PLC, England 14.65% KLM Royal Dutch Airlines, The Netherlands 12.09% Olympic Airways, Greece 1.03% Swissair Schweizerische Luftverkehrs AG, Switzerland 13.22% TAP Air Portugal, Portugal 0.10% (European airlines’ share total) (50%) Air Canada, Canada 1.00% United Airlines Inc., USA (founded on 6 April 1926) 38.00% USAir Group Inc., USA 11.00% (North-American airlines’ share total) (50%) 21 Vol.6 – No.2 – 1996 Tourism Until December 1994, Amadeus had its Central System was located in Denver/ was installed in 1978, and Canadian Air- main presence in Europe, South America Colorado, USA, and utilised its own Gali- lines International’s Pegasus system, and Asia. In contrast, System One, which leo International Distribution Network, its which was installed in 1979. While Ca- was owned by Continental Airlines and national networks as well as the global nadian Airlines International later left the Eastern Airlines, and, after Eastern Air- SITA network. group, Air Canada became a co-owner of lines went bankrupt in 1989, wholly- the Covia Corporation, and the Gemini owned by Continental Airlines, covered United Airlines introduced the Apollo sys- system was re-designed based on Apollo mainly the North and Middle American tem in 1971, based on IBM’s PARS (pro- technology in 1989 and finally integrated markets. System One became operational grammed airline reservation system), into Apollo in July 1994. in 1982 and was based on PARS (pro- which was developed in 1964 and fur- grammed airline reservation system) tech- ther developed by Eastern Airlines. In Since Galileo’s foundation, the operation nology, which was developed by IBM in 1976, United Airlines created the Apollo and marketing of the national systems has 1964. Since 1991, System One has been Services Division to manage the system mainly been handled by national distri- co-operating with General Motors’ sub- Apollo and connected it to travel agen- bution companies (NDCs). 46 NDCs existed sidiary Electronic Data Systems Corpora- cies. The division was separated into the in November 1994 worldwide, including tion (EDS), Dallas/Texas, USA. EDS’ own subsidiary Covia Corporation in 1986. In those of the partner airlines and those of data network, EDS-Net, has been support- July 1987, the Covia Corporation, to- Inter Globe Enterprises in India since Sep- ing System network since. In December gether with the European airlines British tember 1994, South African Airways (SAA) 1994, Amadeus, Continental Airlines and Airways, KLM and Swissair, founded The in South Africa since April 1992, and Turk- EDS initiated a joint venture for the pur- Galileo Company Limited, also referred ish Airlines Inc. (Türk Hava Yollari A.O.) poses of handling System One’s market- to as the Galileo Partnership. In August in Turkey since the end of 1994. ing and software. The newly formed com- 1987, Alitalia and Austrian Airlines joined pany System One Information Manage- the Galileo consortium, followed by Aer The SABRE Group ment LLC (formerly System One Corpora- Lingus and TAP Air Portugal in October Dallas/Texas, USA tion), Houston/Texas, USA, which was 1987, Sabena Belgian World Airlines in equally owned by the three partners, has February 1988, and Olympic Airways in SABRE since been operating as an NMC in North March 1988. Sabena left the consortium (SABRE Travel Information and Central America. The assets of the in the early 1990’s because of financial Network) technical system of System One were ac- difficulties. In early 1988, the Covia Cor- quired by Amadeus in April 1995, and the poration was renamed Covia Partnership In 1951, the project SAGE (semi-auto- system was to be transferred onto the and its shares were acquired by United mated ground environment) was set up Amadeus Central System in Erding dur- Airlines (50%) and USAir (12%) together by International Business Machines Cor- ing 1996 and 1997 as part of the project with Alitalia, British Airways, KLM and poration (IBM) on behalf of the United Unison.
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