GDS (Global Distribution Systems) are not new in the world of air transport. Created by the major
airlines between the late 1970s and the early 1980s, following the deregulation of American air
transport decided by President Carter in 1978, they have established themselves as the essential tool
of distribution by linking travel agents to carriers’ inventory systems.

It worked so well that traditional airlines, in great difficulty following political uncertainties and the
arrival of “low-cost” competitors, gradually sold their stakes at a very high price in order to
compensate for the drift of their accounts. However, these companies, which had become economic
nuggets, were bought by investment funds that were quick to sharply increase the royalties that are
paid by the carriers. This is how, believing they were getting a good deal, the creators of the GDS
found themselves caught in a spiral from which they are trying to escape. To do this, at the request
of its members, IATA, which is an association of airlines, has developed a new protocol called NDC
(New Distribution Capability) in order to speak directly to travel agents without going through the
GDS. However, the widespread use of NDC takes time, a lot of time. A very small number of
companies have installed it. In short, it is far from being fully operational.

Meanwhile, the GDSs have been very concentrated. To date, only 3 major players dominate the
market: Amadeus, Sabre and Travelport. They gradually absorbed the original GDSs such as Galileo or
Système One and became the property of investment funds. Amadeus, for example, is more than
50% owned by 10 funds, the rest being on the stock exchange. Therefore, it is necessary to maintain
a high stock market price to ensure the profitability of the large amounts disbursed. It is therefore
unthinkable for the GDS to lose control of a sector of activity, air transport, which is growing steadily
by 5% per year and which will pass this year or next the turnover of 1,000 billion dollars with 5 billion
passengers. Let’s think that if growth continues and there is no reason for it to stop, in 2035 there
will be around 9 billion passengers who will generate a turnover close to 2 trillion dollars.

So, in order not to lose this manna, the GDSs have also embarked on the NDC protocol and they have
become pillars of it. Whether they like it or not, carriers will still have to use their services. But it
would be surprising if this stopped at the traditional range of products provided by the GDS. The
arrival of AI (Artificial Intelligence) will open up opportunities for them that we can think they will try
to take advantage of. I am talking about the famous Data, in fact the information that passes through
their hands. Because except for direct sales made by airlines, mainly via the Internet, all other
transactions go through GDSs. Even the “low costs”, who are totally reluctant to this mode of
distribution, are coming to it. This is how the GDSs will pass through their pipes a colossal amount of
information on air transport customers, but also on the ancillary services included in the NDC
protocol. Unlike airlines that will only know their own users, GDSs will have a global and detailed
view of the market.

The capabilities of Artificial Intelligence will certainly allow them to shape this mass of information
and so why not sell it to the players, the companies, who could thus have practical and effective
information not on their own customers, but on competitors? Of course, personal data will still be
protected and will remain confidential, at least that is what we can hope, but the statistics and their
processing will remain the property of the operators who collect them. This information will be of
considerable value because it concerns the part of the population most likely to consume. Let’s
imagine that a monster like Amazon gets its hands on a very large GDS, given its computing power
and the quality of its engineers, they will be able to make a considerable profit from it. Finally, if they
use the possibilities offered by AI, the remaining GDSs will become not only essential in the
distribution of air transport, but a key tool for operators’ decision-making. The latter will find
themselves obliged to buy them if they do not want to be inferiority to their competitors.

Air transport will inevitably evolve both under environmental constraints, but also with new technical
capabilities and the intelligent processing of the data contained in PNRs, in other words not the
reservation files that record the markets of origin, destinations, and purchasing behavior. We haven’t
finished talking about it again.

The title is a bit provocative, but the question deserves to be asked. Of course, “low-cost” carriers are
not going to disappear, but their product and their way of operating are in line with the methods of
traditional airlines and moreover, the latter have also largely evolved their operation towards the
“low-cost” model. From then on, and at least as far as short and medium-haul flights are concerned,
there will be only one hybrid model for which it would be wise to find a name.

For quite some time now, the difference between the two concepts has tended to shrink. Incumbent
carriers have been quite easy to adopt the Spartan service on board their flights, especially for
economy classes. They have not yet become accustomed to cashing in the additional services on
board, because the flight crews do not want to handle the money, unlike those of the “low-cost”
whose remuneration comes from this source. The density of seats is more or less identical, i.e.
traditional airlines have adopted an increasingly small space between rows in order to squeeze more
and more people on board. It was also a somewhat mandatory response to the reduction in fares in
order to reach the prices posted by the “low-cost”.

The aircraft are identical and the fleets of traditional carriers are modernizing, thus matching the
performance of their competitors. And so it is that the arrival on the market of the latest generation
of twin-engine single-aisle aircraft, which make it possible to carry out much longer flights, such as
transatlantic flights, will further accentuate the uniqueness of the model even on what must be
called long-haul flights.

So what is left to differentiate the two concepts? First of all, there is still a clear difference in the
operation of the aircraft, the “low-cost” are still looking for and rotating more than the traditional
airlines in short and medium-haul flights. To do this, they have to make faster U-turns and sometimes
put online a program so tense that the last flights of the day are very often late. The management of
on-board staff is also different, with “low-cost” workers being paid largely on a performance basis
and with much more restrictive working conditions than those of their colleagues in traditional
carriers. This does not mean, however, that they are not ultimately paid as well as their counterparts.
But in the end, all these differences are fading. And economic results are affected. Regular airlines
have made considerable efforts to improve their financial performance, i.e. they have improved their
performance at a time when prices were tending to rise, including among “low-cost” airlines. Gone
are the miraculous results of the “low-cost” and first of all on the American market. Spirit Airlines
has just filed for Chapter 11 bankruptcy, and Southwest shareholders are railing about falling profits
at a time when the major U.S. carriers are posting record profits. It is not certain that the same
phenomenon will not occur in Europe and why not in Asia. Basically, the “low-cost”, whose concept
is not so recent, are becoming gentrified, while the “low-cost” are making commendable efforts to
lighten up.

So to become more competitive, the “low-cost” are starting to adopt traditional systems, especially
for their marketing. We now see them entering the classic mode of issuing banknotes in order to be
distributed by the GDS and the BSP traditionally used by the incumbent operators and even enter the
“low-cost” system that they did not want to hear about at any price.
We can see that the rapprochement between the two concepts is being finalized, each copying the
best in the others. As a result, the term “low-cost” has less and less meaning. Who is now going to
find a name to describe the operators of short and medium-haul flights so that the public is aware of
this development?