Thursday, October 18, 2018

Desperate times, desperate measures: Shift in Indian airlines’ GDS providers

Travelport recently bagged contracts of India’s state-owned Air India and one of India’s premier airlines, Jet Airways, as exclusive ticket-distribution service provider and content provider in the country, respectively.
While the contracts will not come into effect any time soon, it has created ripples in the industry. Here’s how:
Reeling from high fuel costs, a falling rupee and stiff competition; financially stressed full-service airlines in India have reasons to slash their sales and distribution costs by renegotiating contracts, even while such measures may compromise their market reach.
The Air India-Travelport agreement will come into effect from January 2020 but as the struggling carrier tries to cut costs, contract revision with its suppliers such as aircraft lessors and engine makers, and providers of global distribution systems (GDS), are reportedly on the cards.
An Air India official told local media that the deal can help them reduce distribution cost by almost 60% and they aim to capitalise on the increased share of domestic bookings that comes directly through the airline’s website.
17/10/18 Mili/Travel Daily Media