Air India selects Travelport, whose official India distributor is Interglobe Technologies Quotient, as the sole global distribution system (GDS) vendor for home market ticket inventory.
State-owned carrier Air India has handed out its entire domestic ticketing inventory to a single vendor, Travelport, despite top airline officials flagging risks of giving access of passenger database to a sole distributor that is also a business partner of rival airline, IndiGo.
Interglobe Technologies Quotient (ITQ), a strategic business unit of InterGlobe Enterprises, the parent company that runs India’s largest domestic airline IndiGo, is the official distributor of Travelport in India.
On October 11, Travelport announced that it had won a 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 contract awarded to Travelport came after a comprehensive bidding process. It will begin to come into effect from November 2018 and be fully implemented by the end of 2019,” it had said.
Air India took the decision to shift to a single global distribution system (GDS)—Travelport—despite strong objections made by three top officials.
GDS is a globally connected computerised 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.
The major GDS include Amadeus, Galileo, Sabre, Worldspan and Travelport among others.
Air India’s decision to move to single GDS contract with Travelport will come into effect from November 2018 and be fully implemented by the end of 2019, effectively making Travelport the sole repository and custodian of India’s flag carrier’s domestic passenger information.
Documents reviewed by Moneycontrol, however, show that former Air India CMD Rajiv Bansal had recorded his opposition to move to a single GDS.
“The market penetration of Amadeus is around 60 percent and that of Travelport is around 30 percent. The financial condition of the airline is delicate and we cannot afford to take substantial risk and adopt an entirely new selling proposition which is vastly different from the earlier model,” Bansal had written in an internal note on November 29, 2017 in response to offers from Amadeus and the Travelport for exclusive handling of AI’s ticket distribution.
“We cannot afford to take substantial risk and adopt an entirely new selling proposition, which is vastly different from the earlier model and leads to dependency on only one particular vendor,” Bansal had noted.
Air India did not respond to Moneycontrol’s email seeking response for this story.
Air India’s commercial director Pankaj Srivastava had also noted in December 2016 out of 100 travel agents who account for 91 percent of Air India’s sales, sell through multiple GDS platforms.
“We are aiming to save Rs 150 crore on account of GDS costs as proposed, which is about 2.5 percent of our estimated revenue. Any shift or drop in airline revenue of more than 2.5 percent nullifies the proposed saving in GDS costs. Therefore, we may continue with existing system of multi GDS or at best restrict to two main GDS,” Srivastava wrote in a note on December 27, 2016.
Air India’s Director, Finance, Vinod Hejamadi, also noted on similar lines, flagging the risks associated with the proposal to move to a single GDS.
“The travel agents may not take the move of the airline in right spirit, which may affect our business,” he wrote in a file noting on August 21, 2017.
Travel agents have also asked Air India to review the decision to move to a single GDS under Travelport.
Travel Agents Association of India (TAAI) has written to Pradeep Singh Kharola, AI CMD pointed out the airline that a single GDS would mean that agents “who do not have access to this GDS will have to go without access to Air India”.
“It is extremely important that the inventory access of Air India must be made available to all the IATA accredited agencies, who have invested extensively and cannot be out of connect with the airline’s inventory,” TAAI wrote in a letter to Kharola on October 24, 2018.
WhatsApp us