Travel Technology for Dummies: What Is Direct vs. Indirect Distribution?

Travel topics explained in a simple way: Today we take a look at the difference between direct and indirect airline distribution. Also, we talk about the topic “GDS bypass vs. GDS passthrough”.

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”.

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 vs. Indirect Distribution

DistributionOnlineOffline
DirectAirline.comAirline desk /
1-800-airline
IndirectLeisure: IBE (Internet Booking Engine)
Business: OBT (Online Booking Tool) or SBE (Self Booking Engine)
Agent Desktop:
ATPCo:
- GDS green screen/GDS Desktop
- TMC Agent desktop (e.g. BCD Agentsource, PASS TAD*)
NDC:
- Airline Desktop (e.g. Sprk for Farelogix)
- Aggregator built Desktop (LCR Bridge IT, PASS TAD*, Atriis Lucie)

*More information on PASS Travel Agent Desktop (TAD) you can find here.

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.

Picture: Shutterstock

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