Low-cost Airline Distribution Channels
Airline distribution is complex. On one side of the airline industry, we have legacy carriers mostly represented by full-service airlines. Since the late 70s, legacy airlines have used a complicated model of distribution that included various data aggregators, consolidators, tech providers, and other intermediaries. As a result, in the mid-90s, global distribution systems or GDSs (Amadeus, Sabre, and Travelport) became monopolists in air travel distribution as the key flight aggregators.
Nowadays, struggling to compensate for the lack of differentiation, legacy carriers are creating new travel APIs and establishing direct channels with travel agencies to show even more flight information. This became possible with the advent of New Distribution Capability(NDC) by International Air Transport Association (IATA). NDC is an initiative to set standards that would allow airlines to distribute their flights directly through online travel agencies or through global distribution systems and also provide ancillary offers.
The other end of the air travel industry is occupied by low-cost carriers (LCC). A totally different business model from the offerings of full-service airlines, the low-cost sector omitted global distribution systems’ oligopoly, leveraging direct online booking. Today, low-cost airlines cover 32 percent of the worldwide airline market, with over 40 percent in Europe and 36 percent in Latin America compared to full-service carriers. While it seemed nearly impossible for online travel agencies (OTAs) and metasearch engines to offer budget airlines’ inventory, some brands managed to do so one way or another.
Here are some examples of the websites and airlines they distribute:
Momondo.com is a Danish metasearch website that distributes Ryanair, Wizz Air, WestJet, Spirit Airlines, Norwegian Air Shuttle, Southwest Airlines tickets through its platform.
Kiwi.com is a Czech online travel agency that works with Southwest Airlines, Spirit Airlines, Ryanair, Transavia Airlines, EasyJet, and Wizz Air.
Travelfusion.com, an online travel data aggregator headquartered in London, is a direct distribution platform certified by IATA’s NDC. Travelfusion works with such carriers as Eurowings, Flybe, and Spirit Airlines.
In this article, we will explain how low-cost carriers distribute today. We’ll also give recommendations on how to use each channel if you plan to integrate LCC distribution in your product and explain the pros and cons of each type of connection.