Travel agents ask Air India to review ticket distribution policy

Travel agents are objecting to Air India's decision to select a single global distribution system (GDS) service provider as it will hurt their revenue. Agents earn incentives from service providers and the airline's decision will hit them hard.

Last week the national carrier selected Travelport as its exclusive partner for ticket distribution in India as part of its efforts to cut down costs. While Air India distributes its tickets within India through three service providers at present, it will offer ticket inventory only on Travelport from January 2020. Similarly, Jet Airways too has revised its ticket distribution agreements selecting two service providers – Traveport and Sabre.

Unlike low-cost airlines, carriers like Air India and Jet Airways rely on GDS providers like Amadeus, Travelport and Sabre for distribution in India and abroad. A GDS collects segment fee for every booking made on its system from an airline and shares a portion of it with travel agents. Thus it adds to the cost of an airline but is a revenue source for agents. Neither Air India not Jet have revised their agreement with Amadeus which has the largest share of ticket sales in India.

“Using a particular GDS is not an overnight affair and this can lead to challenges as we move forward,” Travel Agents Association of India  (TAAI) wrote in an email to Air India chairman earlier in the week. It has asked the airline to reconsider its decision.

The association said some of their members have exclusive agreements with GDS service providers which are not selected by the airline and thus they will have no access to Air India's ticket stock.

“The health of the airline requires support from all agencies. This initiative ( exclusive GDS partner) will definitely impact on the airline negatively. Seats not getting sold is huge negative impact on airline than its distribution cost,” TAAI said. 

Air India did not respond to an email query on agents' concerns. 

“The deal with Travelport will help us to reduce our distribution cost by almost 60 per cent, it’s a huge saving in such times,” said a senior Air India official explaining the rationale behind the deal. “Our market study tells that for domestic bookings, an increased share of our bookings is coming through the airline website, so that will not have much impact.”