In business, the term “distribution” refers broadly to the process of delivering the product to the customer. For airlines, the product is the ticket or cargo waybill. Driven by rising costs and competitive pressures, and empowered by new technologies, carriers have continued to make headway in expanding their distribution offerings to business and non-business consumers. In doing so, the airlines have increased productivity and reduced expenses.
Capturing costs associated with the distribution of an airline ticket is inherently subjective, requiring the analyst to decide what expenses (e.g., sales force, distribution planning staff, reservations agents, call center communications and rent, city ticket offices, mailing, printing, advertising, agency commissions, global distribution system [GDS] booking fees, hardware/software) should be included in that category. That is, distribution costs are functional rather than organizational, entailing a blend of organizational costs (i.e., labor, commissions, purchased services, communications, advertising, and promotion).
An evaluation of a distribution channel that considered only costs would be flawed, of course. Improved channel profitability is the appropriate objective, requiring a thorough analysis of channel shift, revenue production, and dilution, as well as the full array of direct and indirect costs. Deriving this data at the industry level, however, is elusive. ATA does not collect any distribution-related data from its members. DOT’s Form 41 reports contain line items for agency commissions but not for GDS fees, which are lumped in with other professional and technical fees.
No central, official source exists for volume, revenue, or cost of channel. One notable governmental source is GAO's July 2003 report entitled Airline Ticketing: Impact of Changes in the Airline Ticket Distribution Industry. Although private research on these topics exists, report metrics are not always comparable. Terms may be defined differently. Some private sources include: