ABSTRACT
This chapter discusses the business models of two members of the distribution chain—agents and the Global Distribution Systems (GDSs), and their relationship with airlines and the distribution strategies of airlines. The four primary areas of expanding technology having a fundamental impact on airline distribution are airline websites, web-based engines for search and booking the development of alternative web-based GDSs and the introduction of so-called Meta Search engines, such as Kayak. The main weakness of online agencies is their inability to make recommendations based on criteria other than low price—a clear strength of offline agencies. An airline flying a new route can pay a certain GDS to be listed first for flight searches in that new city. Passengers want a sense that they have some control over their own travel plans, and that they are not being manipulated. Conventional airlines, under increasing pressure from passengers and unconventional airlines, have already made substantial progress in reducing their distribution costs.
