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Air India, Jet Airways renegotiate GDS contracts to cut distribution costs

A GDS provider collects a segment fee for every booking and shares a portion of it with travel agents, thus increasing costs for airlines

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Arindam Majumder Aneesh Phadnis New Delhi/Mumbai

Last Updated : Oct 17 2018 | 5:47 AM IST

Financially-stressed full-service airlines in the country are slashing their sales and distribution costs by renegotiating contracts, but such measures could compromise their market reach.

On Sunday, state-owned Air India selected UK-based Travelport as its exclusive ticket-distribution service provider in the country.

The agreement will come into effect from January 2020. As the carrier tries to cut costs, this is part of Air India’s contract revision with its suppliers such as aircraft lessors and enginemakers, and providers of global distribution systems (GDS).

“The deal will help us to reduce our distribution cost by almost 60 per cent,” said a senior Air India official. “Our

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