Single GDS Fails To Up AI’s Pie in Sky
Air India’s market share in the passenger carrier businesses remained same for almost a year. After Jet closed down its operation in June, AI should have siezed the pie but it went to other low cost airlines (LCCs). The only attributable reason is the national carrier’s misguided decision to disassociate with Amadeus as it’s ticketing distribution partner , which managed more than 45 percent of airline’s ticket distribution.
According to the data available on the site of DGCA, Jet Airways’ collapse has mainly benefited Indigo in terms of passenger load increase. In the ten month Jan-October period of 2019, the market share of Indigo increased from 42 percent in January 47 percent in October thereby witnessing a leap of 6 percent on an already substantial pie of 42 percent. SpiceJet , which operates significantly lower number of planes compared to its rival airline Indigo also showed a marked growth in its passenger load. It went up from 13 percent (January) to 16 percent (October) clocking a 3 percent growth. As in case of Air India, the market share remained same at around 12 percent throughout the 10-month period.
Air India has been on the proverbial ventilator for long time. According to industry watchers, divesting it’s saleable assets and properties is not the answer to this mess. Reducing it’s vast GDS distribution network to one vendor is shrinking its catchment area of passengers, they view.
In October last year, Travelport had announced that it had won competitive tender process undertaken by Air India for the sole provision of distribution of its domestic flight content in the airline’s home market.
The national carrier had decided to shift to Travelport despite several senior officials raising objections against the move. Joining hands with Travelport meant giving access to details of AI’s flyers to Inter Globe Technologies Quotient, a strategic business unit of Inter Globe Enterprises which is the parent company of IndiGo, India’s largest airline by market share and Air India’s biggest competitor.GDS is a globally connected computerized reservation network offering a one-point access to airline bookings, hotel reservations as well associated travel-related areas including car rentals. A GDS also connects travel agents and other such service providers with large corporations. Such networks are usually operated in partnership with, either through joint ventures or as supporting business partners, major airlines, hotel chains or transnational travel service providers.
Air India inventory was available on all the three GDS. On June 4, 2018, Air India’s agreement with Amadeus expired and the airline pulled out its inventory after a six-month notice period. Last year, petitions in public interest were filed in three different high courts against Air India’s decision to make Travelport its exclusive GDS provider. The matter is slated to be heard by Delhi High Court on petitions filed by affected travel agents and bodies against AI on December 6.