1990s GLOBAL DISTRIBUTION SYSTEMS EMERGE... AND THE INTERNET CHANGES EVERYTHING In 1992, the US Department Of Transportation addressed gaps in the Civil Aeronautics Board’s 1984 rules which has been introduced to try and regulate the CRSs. The DOT compelled CRS providers to share service enhancements to their systems with other airlines that were participating in the CRS. It also compelled the airlines that ran CRSs to participate in competing CRSs, as well. Five years later, the DOT amended the rules again to prohibit CRS providers from including ‘parity’ clauses in their airline contracts. These clauses required airlines to give whatever inventory they shared with one CRS provider to others, as well. At the same time, airlines were divesting their ownership in CRSs. Sabre launched an IPO in 1996 and became fully independent of American Airlines in 2000. Galileo, the forerunner of Travelport, which had merged with Apollo, went public in 1997. Amadeus, which had absorbed System One, went public in 1999. CRSs gained more influence as independent and increasingly global entities. Corporate travel agencies that specialised in complex and often international business travel itineraries depended heavily on these global distribution systems (GDSs) to serve their clients. As a backdrop to this transformation, the internet was emerging. GDSs offered travel agencies internet access and the software necessary to build and maintain their own websites. GDSs also targeted consumers directly through new online travel agencies: Sabre launched Travelocity in 1996 and Worldspan provided content for Microsoft’s Expedia startup that same year.
The significant capital required to build and maintain a CRS resulted in an air distribution market dominated by five providers
1980s THE BIG FIVE
The significant capital required to build and maintain a CRS, combined with lengthy, exclusive travel agency contracts, resulted in an air distribution market dominated by five large CRS providers: Amadeus, Apollo, Galileo, Sabre and Worldspan. All were owned by airlines. Amadeus was created as a neutral GDS by Air France, Iberia, Lufthansa and SAS in 1987 in order to offer a European alternative to Sabre.
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