In many cases NDC is mistakenly used for direct distribution. NDC is a data standard. NDC is explained in details in the following Blogs: “What is NDC?”, “ The reality behind NDC” and “NDC – the next curtain”.
Direct vs. Indirect Distribution
When it comes to airlines, direct and indirect distribution is quite simple to explain: Direct distribution is when the traveler books his flight directly with the airline. In the indirect channels there are online or offline (brick & mortar) travel agencies in most cases along with Global Distribution Systems (GDSs) between the traveler and the airline.
Within NDC, instead of a GDS, IATA speaks of aggregators. IATA “invites” GDSs to become aggregators, but in fact they really don’t care who the aggregator is (as long as there is one). The GDSs have meanwhile confirmed that they want to become NDC aggregators and integrate NDC content along with LCC and classical ATPCo content. However, with NDC, GDSs are less in control as airlines control the offer creation as well as the order management. With traditional indirect distribution, the GDS creates the offer, keeps the Passenger Name Record (PNR) and only provides a copy of the PNR to the airline.
|Direct||Airline.com||Airline desk / 1-800-airline|
|Indirect||Leisure: IBE (Internet Booking Engine) Business: OBT (Online Booking Tool) or SBE (Self Booking Engine)||Agent Desktop:
PASS Travel Agent Desktop
The Difference Between GDS Bypass and GDS Passtrough
So, what is a GDS bypass vs. a GDS passthrough? A GDS bypass is nothing else but a distribution channel which completely bypasses the GDSs. In other words, an aggregator that integrates directly with the airline’s NDC API, bypasses the GDS completely. GDSs were so reluctant to adopt NDC as they feared NDC will enable GDS bypass for the mass market and reduce the GDS usage for the complicated bookings. Consequently, GDS fought NDC until it was eminent that NDC will come and GDSs had the time to catch up. The travel agency community also favored the traditional distribution channel due to a revenue stream paid to some extent by the GDSs.
A GDS passthrough is where the GDSs themselves actually integrate to the NDC APIs of the airlines and become certified. It is considered a passthrough, as messages between traveler/agent are more or less passed through the GDS on to the airline NDC system and no real refinement by the GDSs takes place (the order is created and managed by the airline). All the GDSs do in this case is, what (GDS-) aggregators did all these years, make sure that one airline looks pretty similar to the other airline. However, now, as all GDSs have committed to NDC, I suspect that the term “GDS passthrough” will eventually disappear.
Blog Series: Travel Technology for Dummies
- What Is Full Content?
- What Is a Booking Reference or PNR?
- What Is Overbooking?
- What Is a Passenger Service System (PSS)?
- What Are Booking, Waitlists, Tickets, Codeshare & Interlining?
- What Are Active and Passive Segments?
- What Are Incentives, Commissions & Overrides?
- What Is a ‘Married Segment’?
- Blockchain in Travel: All You Need to Know – for Now
- What Is the Difference Between Fares, Rates and Tariffs?
- What Is NDC?
- What Is Continuous Pricing?
- What Is Direct vs. Indirect Distribution?