In a letter shot off to minister of state for civil aviation Jayant Sinha early this month, a top executive of Madrid-based information technology firm Amadeus estimated the revenue loss to travel agents of Air India to be around Rs 1,825 crore once state-owned carrier moves to a single global distribution system (GDS) for domestic flights.
A GDS is an interface between an airline and travel agents.
The letter, which has been viewed by DNA Money, claims that Air India's decision to have an exclusive GDS to sell its tickets will not only impact the airline but will also adversely affect "country's image, businesses of Indian agencies and Indian consumers".
The European GDS firm, which has been working with Air India along with Sabre and Travelport for several years now, will be dropped by the airline from December 4.
A notice sent out by Meenakshi Mallik, executive director – commercial, AI, to travel partners in October said from December the full-service airline's point of sale (POS) content for domestic flights will be available only on Travelport, Sabre and Abacus. And by January, Sabre and Abacus would also be phased out. That would leave only Travelport, managed and controlled by ITQ, as its only GDS. ITQ is a part of InterGlobe group that owns low-cost carrier (LCC) IndiGo.
According to Mallik's note, Air India's POS international flight content will continue to be available on Travelport, Sabre, Abacus and Amadeus.
This move is fraught with financial risks, said Amadeus, in its letter to the minister.
"AI's decision entails a significant negative financial impact for the airline. Those tickets represent annual ticket revenues in excess of $780 million (Rs 5,800 crore) for AI (excluding taxes and surcharges). Of this revenue, $245 million (Rs 1,825 crore) is generated using Amadeus as their sole GDS. Approximately 51% of AI's travel agency bookings are generated by those using Amadeus."
"These agencies will not immediately transform their business/contract by switching GDS due to the loss of a single airline and so their revenue stream will cease immediately as of December 4," the letter states.
26/11/18 Praveena Sharma/DNA
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A GDS is an interface between an airline and travel agents.
The letter, which has been viewed by DNA Money, claims that Air India's decision to have an exclusive GDS to sell its tickets will not only impact the airline but will also adversely affect "country's image, businesses of Indian agencies and Indian consumers".
The European GDS firm, which has been working with Air India along with Sabre and Travelport for several years now, will be dropped by the airline from December 4.
A notice sent out by Meenakshi Mallik, executive director – commercial, AI, to travel partners in October said from December the full-service airline's point of sale (POS) content for domestic flights will be available only on Travelport, Sabre and Abacus. And by January, Sabre and Abacus would also be phased out. That would leave only Travelport, managed and controlled by ITQ, as its only GDS. ITQ is a part of InterGlobe group that owns low-cost carrier (LCC) IndiGo.
According to Mallik's note, Air India's POS international flight content will continue to be available on Travelport, Sabre, Abacus and Amadeus.
This move is fraught with financial risks, said Amadeus, in its letter to the minister.
"AI's decision entails a significant negative financial impact for the airline. Those tickets represent annual ticket revenues in excess of $780 million (Rs 5,800 crore) for AI (excluding taxes and surcharges). Of this revenue, $245 million (Rs 1,825 crore) is generated using Amadeus as their sole GDS. Approximately 51% of AI's travel agency bookings are generated by those using Amadeus."
"These agencies will not immediately transform their business/contract by switching GDS due to the loss of a single airline and so their revenue stream will cease immediately as of December 4," the letter states.
26/11/18 Praveena Sharma/DNA
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