How Airline Reservation System works under the hood?
Have you ever wondered what goes when you go book a flight on your favourite application in the likes of Expedia, Booking.com, Agoda or several others? In this blog post, we will discuss what goes behind the scenes on the information when you book a flight, things like reservation, flight prices, schedules, etc.
The Evolution and Mechanics of Airline Reservation Systems
How do you purchase your flights? Do you head directly to your favourite airline’s website and grab the first flights you see for the dates you need? Or perhaps you research prices on Skyscanner, Travelocity, Kayak, or other aggregators to compare fares and book the cheapest flight for the dates that work best. Maybe you don’t trust your computer and call a travel agent. However you book, a complex network of systems works behind the scenes to make your travel plans a reality. Let’s explore how these systems evolved and how they function today.
The Early Days of Flight Booking
Back in the 1960s, making a flight reservation was a labor-intensive process that required multiple people and a mainframe computer. American Airlines and IBM pioneered the automation of flight distribution with a system called Sabre (Semi-Automatic Business Research Environment). This system used an IBM 7090 computer located in Briarcliff Manor, New York, and connected to 1500 American Airlines remote terminals across the country. Travel agents contacted the airline by phone to reserve seats, and the system could handle up to 84,000 telephone transactions per day.
The Rise of Global Distribution Systems (GDS)
In the 1970s, Sabre terminals were extended to travel agents’ offices, freeing up airline manpower and marking the beginning of global distribution systems (GDS). Today, GDSs are large flight aggregators that collect flights from about 400 airlines and distribute them to travel agencies via their own application programming interfaces (APIs). The three major GDSs are:
Sabre: Became an independent business in 2000.
Amadeus: Established in 1987 by four European airlines.
Travelport: A UK-based GDS formed through a merger of smaller providers.
How GDS-Centered Distribution Works
GDSs are connected to airlines’ central reservation systems (CRS), which manage seat reservations. However, scheduling information and pricing require additional connections:
ATPCo (Airline Tariff Publishing Company): Airlines publish their prices on ATPCo, which then distributes this information to GDSs, OTAs, and price aggregators.
Scheduling Providers: Companies like Innovata and OAG supply the travel market with flight schedules, routing connections, and flight code information.
Despite their powerful position in the market, GDSs have some limitations. They often lack valuable customer data, provide limited support for ancillary services, and don’t give airlines full control over their inventory and distribution channels.
Introduction to Key Components of Airline Reservation Systems
Global Distribution Systems (GDS)
Global Distribution Systems (GDS) are powerful intermediaries in the travel industry, aggregating flight information from hundreds of airlines and distributing it to travel agencies and online travel agencies (OTAs). The three major GDSs—Sabre, Amadeus, and Travelport—play a crucial role in connecting airlines with a broad network of travel sellers, facilitating seamless booking processes and efficient travel management.
Airline Tariff Publishing Company (ATPCo)
The Airline Tariff Publishing Company (ATPCo) is the primary global source for fare and pricing information in the airline industry. Airlines publish their fares on ATPCo, which then distributes this data to GDSs, OTAs, and metasearch engines, ensuring consistent and accurate fare information across various booking platforms.
OAG and Innovata
OAG and Innovata are leading providers of airline schedule data and routing information. These companies supply the travel market with up-to-date flight schedules, route connections, and flight codes, enabling accurate and reliable planning for travelers and travel agencies.
Airline Reservation System
An airline reservation system (ARS) is a software solution that manages seat inventory, reservations, and ticketing for airlines. Central Reservation Systems (CRS) are the core technology that airlines use to handle bookings, monitor available seats, and ensure smooth operation from the moment a ticket is booked until the flight departs.
Airline Websites
Airline websites serve as direct booking channels for passengers, offering a platform to search for flights, compare fares, and make reservations. These websites allow airlines to maintain direct relationships with their customers, offer personalized services, and manage ancillary products like baggage, seat selection, and in-flight amenities.
Online Travel Agencies (OTAs)
Online Travel Agencies (OTAs) like Expedia, Booking.com, and Travelocity provide a convenient platform for travelers to search, compare, and book flights from multiple airlines in one place. OTAs access flight information through GDSs or direct connections with airlines, offering competitive prices and comprehensive travel packages, including hotels, car rentals, and activities.
Metasearch Engines
Metasearch engines such as Skyscanner, Kayak, and Google Flights aggregate flight data from various OTAs and airline websites, allowing travelers to compare prices and schedules across multiple platforms. These search engines do not handle bookings directly but redirect users to the respective OTA or airline website for finalising their reservations.
The Modern Booking Process
Step 1: Flight Search
When you search for flights on an airline website, the system checks your request against inventory data stored in the airline’s reservation system. It then returns a list of available options. For more complex itineraries or price comparisons, travelers often turn to OTAs like Expedia or metasearch engines like Skyscanner. If you are using an OTA, they contact the GDS service provider. like travelport, amadeus or sabre to get the right flight, price and schedule information as per your set dates and configuration. If you are using GDS, it contacts 3 important pieces of information from the picture shown above:
OAG/Innovata – to get flight schedule
ATPCO (Airline Tariff Publishing Company) – to get flight fares
Airline Reservation System (ARS) – to get and manage seat inventory, reservations, and ticketing
Step 2: Choosing a Booking Channel
Travelers must decide whether to book through an OTA or directly via the airline’s website. Many prefer booking directly with airlines for easier ticket changes and cancellations, as well as the ability to purchase additional services like extra baggage or preferred seating.
Step 3: Booking a Flight and Generating a PNR
During booking, personal data is collected to create a Passenger Name Record (PNR), which contains mandatory information such as the passenger’s name, flight itinerary, contact info, ticketing date, and the person making changes to the booking. The airline generates a unique six-character record locator code for the PNR.
Step 4: Payment Processing
OTAs and airline websites use payment gateways to process transactions securely. Payment processing via an OTA can take longer as they must verify ticket availability with the airline before finalizing the transaction.
Step 5: Ticketing
Booking and ticketing are separate processes. After payment confirmation, the airline’s ticketing system issues an e-ticket, an electronic receipt linked to the PNR.
Step 6: Departure
The Departure Control System (DCS) oversees check-in, boarding, and baggage handling. It generates boarding passes and bag tags, tracks baggage, and updates the PNR status to “boarded” and eventually to “flown.”
Challenges and Innovations
Airlines face challenges with GDS-centered distribution, including lack of customer data and limited control over inventory. Some airlines, like Lufthansa, have introduced fees for bookings made through GDSs to encourage direct bookings. Low-cost carriers like Ryanair often avoid GDSs altogether.
In 2015, the International Air Transport Association (IATA) introduced the New Distribution Capability (NDC) standard. NDC allows airlines to build their own APIs and connect directly to OTAs, bypassing GDSs. This standard supports rich content, wide ancillary offers, and personalized customer experiences.
The Future of Airline Reservation Systems
Despite the slow adoption of NDC, with only 65 airlines using it, GDSs are investing heavily in innovation to incorporate NDC support. The industry is at a crossroads, with airlines, hotels, and other service providers striving to avoid third parties and distribute products directly. However, the growing number of travelers each year will continue to seek comprehensive travel booking platforms that allow planning of entire trips from flights and accommodations to local eateries.
In conclusion, while the path the industry will take remains uncertain, the evolution and mechanics of airline reservation systems continue to adapt to technological advancements and changing consumer preferences, aiming to provide a seamless and efficient travel booking experience