avier
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Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 10:33 am

Air India ends 30-year-old ties with ticket reservation company

In an important move, national carrier Air India (AI) ended its thirty-year-old relationship with global air ticket reservation data provider Amadeus on Tuesday. Travel agents say the immediate impact will be felt by passengers whose AI tickets were booked through agents/travel portals using Amadeus computerised reservation network, which is a Global Distribution System (GDS) company.
At 5.30 am, AI took its air ticket inventory off Amadeus global computer network to deepen its relationship with the latter’s rival, the UK-based Travelport. With the move, AI believes it will save Rs 3,000 crore in the next six years. AI’s critics have warned that severing relationship with Amadeus, the current market leader, would impact its ticket bookings, as most of the travel agents in India are on the Amadeus system.
Critics of the AI move point out that Amadeus is the leading GDS provider in India, Europe and the Middle East—markets where AI earns most of its revenue from. “In India, about 55% travel agents use Amadeus, which alone generated Rs 10,000 crore worth of business for AI in the last financial year. AI will lose about 30-40% of that revenue. Amadeus has alternative flights by other airlines on 87% city-pairs flown by AI and these agents will sell them,” said an insider.


From another article :
Air India's Ticketing Migration To Travelport Challenged In High Court
Amadeus is the market leader with over 400 airlines distributed through its platform, Sabre along with Amadeus command 83 per cent of the global share of ticketing bookings and Travelport is the smallest with less than 17 per cent market share.
Besides, of the 28 Star Alliance airlines, of which AI is a member, 20 are hosted on Amadeus using their connectivity to sell AI inventory but none of them (28) is hosted on Travelport, said the PIL.


Is this as bad at its made to sound by the opposing travel agents ? I know Amadeus is the largest GDS provider, so is this a wise move by AI or are they upto some flawed decision making again. ?
I also found AI flights not bookable on Expedia.

https://timesofindia.indiatimes.com/business/india-business/ai-ends-30-year-old-ties-with-ticket-reservation-company/articleshow/66945758.cms
https://www.ndtv.com/india-news/air-indias-ticketing-migration-to-travelport-challenged-in-bombay-high-court-1957350
 
TC957
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 11:02 am

Very much a flawed decision - in fact, I'd say a completely stupid one. They are biting off the very hand that feeds them.
Music of course to the ears of the ME3 and TK who will benefit greatly now from agents with Amadeus GDS.
But the statement that none of the Star A airlines are hosted on Travelport is completely wrong - we use Travelport in our company and book Star A carriers no problem.
 
RJNUT
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 11:38 am

These type GDS severances usually get patched up after while. Usually just some type of posturing.
 
dtw2hyd
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 12:58 pm

I am sure somebody from the Ministry of Finance is driving this brilliant cost-saving effort. If walls have ears, you would hear Arun Jaitley saying when 6E(a yuge airline) can have just Travelport why not AI?

All AI needs is a temporary injunction from some court for them to reinstate and have an "I told you so" moment.
 
Waterbomber
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 1:14 pm

If AI can save 500 crore per year while losing only 30-40% of 10.000 crore per year worth of revenues on which they have razor thin operating margins or if loss-making actually negative margins, it sounds like the move makes sense.
In theory, AI would have to have an operating margin of about 13-17% on the additional tickets sold thanks to Amadeus just to offset the additional cost of Amadeus versus Travelport.
 
drdisque
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 3:44 pm

Yes, this is a negotiation tactic to get better rates from Amadeus. It happens from time to time. Amadeus thinks they have AI by the gonads since they dominate the Indian market, and tries to milk them for everything they've got (Amadeus is VERY expensive to non-member airlines, especially flag carriers that tend to have a higher % of tickets booked through brick & mortar agents). AI needs to cut costs and Amadeus isn't budging. The only leverage AI has is to back out to bring Amadeus back to the table. Yes, it will hurt AI, but it's the only way they can avoid being held hostage by Amadeus. Amadeus (and Amadeus agencies in that region) will lose a tremendous amount of revenue as well during this outage.
 
styles9002
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 4:05 pm

TC957 wrote:
But the statement that none of the Star A airlines are hosted on Travelport is completely wrong - we use Travelport in our company and book Star A carriers no problem.


You may be confusing having inventory distributed in the GDS versus actually hosting an airline's own reservation system by Amadeus. For sure, you can book Star Alliances airlines' inventory in Travelport but the article stated that Travelport doesn't host any Star Alliance carriers' reservation system, which I believe is indeed true.

Many carriers use Amadeus's Altea to host their Passenger Service Systems (PSS) including Lufthansa, Air France, and British Airways. Southwest Airlines also recently moved over to Altea.
It is what it is.
 
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usxguy
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 4:12 pm

RJNUT wrote:
These type GDS severances usually get patched up after while. Usually just some type of posturing.


But its never gone this far. Its only been a threat.
xx
 
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lightsaber
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 4:15 pm

Waterbomber wrote:
If AI can save 500 crore per year while losing only 30-40% of 10.000 crore per year worth of revenues on which they have razor thin operating margins or if loss-making actually negative margins, it sounds like the move makes sense.
In theory, AI would have to have an operating margin of about 13-17% on the additional tickets sold thanks to Amadeus just to offset the additional cost of Amadeus versus Travelport.

Good summary. I think AI will lose less in sales than you propose and is certain to save sales fees.

It is good for AI to cut costs.

Next step is quarterly reports to help the cost cutting March along.

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Slash787
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 6:16 pm

Does Jet Airways also uses Amadeus?
 
berari
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 6:48 pm

Maybe AI is looking to reduce its dependence on travel agents, and have a drive towards direct bookings. US airlines have pulled similar moves in the past, and they still remain. Bookings via agents can be costly, and I am sure the risk is well calculated.
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 7:26 pm

Waterbomber wrote:
If AI can save 500 crore per year while losing only 30-40% of 10.000 crore per year worth of revenues on which they have razor thin operating margins or if loss-making actually negative margins, it sounds like the move makes sense..


TC957 wrote:
Very much a flawed decision - in fact, I'd say a completely stupid one. They are biting off the very hand that feeds them.


dtw2hyd wrote:
I am sure somebody from the Ministry of Finance is driving this brilliant cost-saving effort. If walls have ears, you would hear Arun Jaitley saying when 6E(a yuge airline) can have just Travelport why not AI?



Slash787 wrote:
Does Jet Airways also uses Amadeus?


Even they are looking to limit themselves to two GDS providers : Travelport and Sabre. So I believe they dropping Amadeus too. Though not much news on when for 9W.

I wonder if Amadeus is ridiculously expensive that the two major airlines are (maybe for 9W) dropping it. Their boths distribution costs were almost 4-5 times that of airlines like 6E - which carries a lot more pax and is much larger than the two, with a domestic marketshare of more than the two airlines combined . So looks like they do estimate savings from leaving Amadeus.

Likes to previous reports of the two :

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

https://www.business-standard.com/article/companies/air-india-jet-airways-renegotiate-gds-contracts-to-cut-distribution-costs-118101601089_1.html
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 7:32 pm

berari wrote:
Maybe AI is looking to reduce its dependence on travel agents, and have a drive towards direct bookings. US airlines have pulled similar moves in the past, and they still remain. Bookings via agents can be costly, and I am sure the risk is well calculated.


Those travel agents also include online Flight search websites like Expedia. And when pax book , they usually compare the fares of various airline options and then book. AI wouldn’t even now show up on many such websites. And a non-Indian person probably wouldn’t know if AI even operates the route and bother checking their websites directly.

This move benefits the domestic ops mostly as they still show on all Indian flight booking websites. They however lose exposure on the int’l pax side.
 
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 7:33 pm

The travel agent industry is completely over-reacting, and either they don't understand how GDS work or it's a front for Amadeus. Being on Travelport when most of your agents are on Amadeus is really no problem at all. There is some very, very specific functionality that might not carry across but 98% of what you want the GDS to do will carry across between systems. It is totally normal to have different systems between agent/ticketing airline and ticketing airline/interline airline and generally speaking it all works. This is a storm in a teacup.
Last edited by RyanairGuru on Thu Dec 06, 2018 8:00 pm, edited 1 time in total.
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 7:56 pm

avier wrote:
Their boths distribution costs were almost 4-5 times that of airlines like 6E - which carries a lot more pax and is much larger than the two, with a domestic marketshare of more than the two airlines combined . So looks like they do estimate savings from leaving Amadeus.


A business cannot survive with distribution costs a high multiple of the competition. While more effective channels tend to cost more, enough passengers book online that it is time to cut costs.

AI must get to break even. Then it can be sold and stop being a burden on the taxpayers. This is one of many steps required.

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BestWestern
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 8:06 pm

Rakesh Gangwal was former CEO of the Travelport subsidiary Worldspan.

Many airlines reduce their GDS cost exposire by pitting one against another like this. It’s called competition, and AI have lowered costs. At $4 per segment ++ , GDS costs are huge, especially for a lower yield carrier like AI.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
Antarius
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 8:25 pm

BestWestern wrote:
Many airlines reduce their GDS cost exposire by pitting one against another like this. It’s called competition, and AI have lowered costs. At $4 per segment ++ , GDS costs are huge, especially for a lower yield carrier like AI.


This is one of the rare moments where it seems AI has made a business decision and not aimlessly wandered around.

Either AI gets Amadeus to cut them a deal or they cut costs significantly. Both are big wins for a perennial loss leader.
2018: AUA CLT IAH HOU DFW COS DEN CLL ORD PEK PVG PHX SFO SJC OAK PHL YYC STL DTW HNL OGG JFK LGA EWR GIG GRU IGU CWB SDU MDW BOS IAD DCA PBI FLL MIA
 
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 8:30 pm

Storm in a tea cup. Having worked in the HQ of a multinational agency I can tell you one of the biggest grips airlines had
with GDS's. That is they charge every time you do an availability search or hold a seat in regardless if a ticket is issued or
not.

With some of the bigger agency chains they even pay them to use it.... but they charge the airline for it. So much so, some airlines
like Air NZ and Emirates continue to use their own systems developed in house. Some airlines have tried cut commission because
of the practice and that did more damage than changing the GDS. With the amount of IT skilled workers in India.... I'm sure
it won't be an issue. A bigger issue is getting them more efficient and improving their corporate image.

Most of the US carriers book a lot directly in house and this saves them a lot, even if they do use systems like Sabre and Apollo.
And if I recall correctly American was outright refusing to use one of the large online travel agencies for a while... that didn't
seem to cause a lack of PAX. In this case AI's biggest issue isn't going to be a change of GDS.... it's going to be winning the
hearts and minds of their customers.
 
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 8:35 pm

BestWestern wrote:
Rakesh Gangwal was former CEO of the Travelport subsidiary Worldspan.

Many airlines reduce their GDS cost exposire by pitting one against another like this. It’s called competition, and AI have lowered costs. At $4 per segment ++ , GDS costs are huge, especially for a lower yield carrier like AI.


Amadeus commissions per segment can be outrageous at times. They can charge over double that for some carriers (because Amadeus marketshare is so high). AI has to cut costs and frankly a lot of other Indian carriers only use Travelport so most Indian travel agents will sell tickets via Travelport.

Also a lot of airlines are using the new IATA API standards as leverage against the GDS companies since those APIs enable airlines (in theory) to sell via travel agencies directly. The NDC APIs allow an airline to avoid ATPCO and the GDS systems and just create offers and issue tickets directly. Ticketless carriers have been doing this for a long time but now the IATA standards support ticketed carriers as well.

Change is coming for the distribution but it'll take some time.
 
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 10:16 pm

klakzky123 wrote:
Amadeus commissions per segment can be outrageous at times. They can charge over double that for some carriers (because Amadeus marketshare is so high). AI has to cut costs and frankly a lot of other Indian carriers only use Travelport so most Indian travel agents will sell tickets via Travelport.
.

Wait... If Travelport is already common, AI stands to loose less business (if any). So if the majority of the sales channel has already moved on, there isn't an issue.

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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 10:26 pm

lightsaber wrote:
klakzky123 wrote:
Amadeus commissions per segment can be outrageous at times. They can charge over double that for some carriers (because Amadeus marketshare is so high). AI has to cut costs and frankly a lot of other Indian carriers only use Travelport so most Indian travel agents will sell tickets via Travelport.
.

Wait... If Travelport is already common, AI stands to loose less business (if any). So if the majority of the sales channel has already moved on, there isn't an issue.

Lightsaber


For Indian POS, Travelport is probably good enough. If you're selling in other parts of the world (for example Europe), Amadeus tends to have much larger market share.

But for a low yield airline like AI, it might be worth it to just give up on agencies that use Amadeus exclusively. AI isn't in a position to impose a GDS surcharge so they need to be smart about their GDS relationships. If Travelport is giving them a great deal, it makes sense to double down and abandon Amadeus.
 
RJNUT
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Re: Air India ends Amadeus ties, travel body opposes.

Thu Dec 06, 2018 11:38 pm

Star Alliance may prefer that its members participate in all the large GDS in order to distribute some of their more complex interline itineraries. But this really isn't about leaving the GDS system as many here seem to think, only switching to a lower cost one , namely , Travelport. I still maintain Amadeus/AI will strike a deal to accommodate AI's needs. To be continued...…!
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 1:23 pm

RJNUT wrote:
Star Alliance may prefer that its members participate in all the large GDS in order to distribute some of their more complex interline itineraries. But this really isn't about leaving the GDS system as many here seem to think, only switching to a lower cost one , namely , Travelport. I still maintain Amadeus/AI will strike a deal to accommodate AI's needs. To be continued...…!


If Amadeus is desperate for AI's business , they will woo them back. But then they might have to drop Travelport. AI has made it clear they sticking to one major GDS provider. I also do find Amdeus' Navitaire to be very popular amongst major LCC's worldwide. Even a few FSC's use it, like Qantas. If AI uses that and Amadeus GDS alone , it would align them well with their alliance partners and all those travel agents in the country that are on it too.
 
c933103
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 1:35 pm

Wait, Rs 3,000 crore in the next six years mean a billion USD per year? As people buying online tickets can still buy their tickets online and people booking via travel agency can still get their travel agency booking tickets for them one way or another unless those travel agency don't want to do these businesses, the question here seems to be why don't they take this action earlier?
 
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 1:38 pm

klakzky123 wrote:
lightsaber wrote:
klakzky123 wrote:
Amadeus commissions per segment can be outrageous at times. They can charge over double that for some carriers (because Amadeus marketshare is so high). AI has to cut costs and frankly a lot of other Indian carriers only use Travelport so most Indian travel agents will sell tickets via Travelport.
.

Wait... If Travelport is already common, AI stands to loose less business (if any). So if the majority of the sales channel has already moved on, there isn't an issue.

Lightsaber


For Indian POS, Travelport is probably good enough. If you're selling in other parts of the world (for example Europe), Amadeus tends to have much larger market share.

But for a low yield airline like AI, it might be worth it to just give up on agencies that use Amadeus exclusively. AI isn't in a position to impose a GDS surcharge so they need to be smart about their GDS relationships. If Travelport is giving them a great deal, it makes sense to double down and abandon Amadeus.

But for non-India PoS, how many people still use travel agency instead of buying their own tickets? And also use Air India?
 
klakzky123
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 3:43 pm

c933103 wrote:
klakzky123 wrote:
lightsaber wrote:
Wait... If Travelport is already common, AI stands to loose less business (if any). So if the majority of the sales channel has already moved on, there isn't an issue.

Lightsaber


For Indian POS, Travelport is probably good enough. If you're selling in other parts of the world (for example Europe), Amadeus tends to have much larger market share.

But for a low yield airline like AI, it might be worth it to just give up on agencies that use Amadeus exclusively. AI isn't in a position to impose a GDS surcharge so they need to be smart about their GDS relationships. If Travelport is giving them a great deal, it makes sense to double down and abandon Amadeus.

But for non-India PoS, how many people still use travel agency instead of buying their own tickets? And also use Air India?


Probably not as much as India but the Indian diaspora still books heavily with travel agencies (or at least OTAs). And AI relies heavily on them. Think of the Indian diaspora in the UK. Travel Agencies matter for them.
 
anshabhi
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 3:59 pm

c933103 wrote:
Wait, Rs 3,000 crore in the next six years mean a billion USD per year? As people buying online tickets can still buy their tickets online and people booking via travel agency can still get their travel agency booking tickets for them one way or another unless those travel agency don't want to do these businesses, the question here seems to be why don't they take this action earlier?

More like $70 million/year (1 billion is around 7000 crores :))

Travelport is used by India's largest airline- IndiGo. Every travel agent in India who wants to do business with IndiGo already has Travelport so reach among travel agents is not an issue.
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 5:20 pm

anshabhi wrote:

Travelport is used by India's largest airline- IndiGo. Every travel agent in India who wants to do business with IndiGo already has Travelport so reach among travel agents is not an issue.


That's not correct.

6E uses Navitaire ( Amadeus) reservation system for it's main distribution of inventory. 6E signed the GDS agreement only on Nov 16' with Travelport so that agents around the world could get access to it's inventory through GDS.

So it's not that all travel agents in India have to be on Travelport to access 6E inventory.
Even SpiceJet and GoAir use Navitaire reservation system btw. I'm not sure if they two have signed up for any GDS though.
 
klakzky123
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 6:00 pm

avier wrote:
anshabhi wrote:

Travelport is used by India's largest airline- IndiGo. Every travel agent in India who wants to do business with IndiGo already has Travelport so reach among travel agents is not an issue.


That's not correct.

6E uses Navitaire ( Amadeus) reservation system for it's main distribution of inventory. 6E signed the GDS agreement only on Nov 16' with Travelport so that agents around the world could get access to it's inventory through GDS.

So it's not that all travel agents in India have to be on Travelport to access 6E inventory.
Even SpiceJet and GoAir use Navitaire reservation system btw. I'm not sure if they two have signed up for any GDS though.


Right but the important point is that 6E distributes either through direct API or Travelport. So travel agencies either setup direct integrations with the reservation system or they retrieve inventory via Travelport. The Amadeus GDS isn't part of the equation.

AI consequently is doubling down on Travelport as a means of distribution which makes sense in India. Amadeus GDS marketshare in India isn't particularly strong. Now AI desperately needs to start distributing directly like 6E but that requires a massive technology effort. AI Express and AI run on different systems so selling combined inventories are only possible via GDS. So they need to consolidate everything into a single reservation system and then work on enabling distribution via NDC APIs.

But AI doesn't seem disciplined enough to pull that off. So they'll continue to suffer through GDS segment charges while 6E limits its exposure through its extensive set of direct integrations.
 
anshabhi
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 6:09 pm

Quiet surprising that no one pointed out so far that Travelport is owned by IndiGo's owner- InterGlobe Technologies.
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 6:25 pm

klakzky123 wrote:

Right but the important point is that 6E distributes either through direct API or Travelport. So travel agencies either setup direct integrations with the reservation system or they retrieve inventory via Travelport. The Amadeus GDS isn't part of the equation.

AI consequently is doubling down on Travelport as a means of distribution which makes sense in India. Amadeus GDS marketshare in India isn't particularly strong. Now AI desperately needs to start distributing directly like 6E but that requires a massive technology effort. AI Express and AI run on different systems so selling combined inventories are only possible via GDS. So they need to consolidate everything into a single reservation system and then work on enabling distribution via NDC APIs.

But AI doesn't seem disciplined enough to pull that off. So they'll continue to suffer through GDS segment charges while 6E limits its exposure through its extensive set of direct integrations.


Yes. I get the part of the GDS of Amadeus not being part of any of that equation. 6E just uses their passenger reservation system (of Navitaire) as direct selling means.

Also, are you saying that AI does no direct selling at all, and its all through GDS? That is they don't sell direct through API's ?
It's just this whole direct selling and GDS gets confusing.

I also felt the same way that if they ( along with AI Express) used a system like Navitaire, I'm sure they could do more direct distribution then and also combine the two airlines intenaries.
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 6:27 pm

anshabhi wrote:
Quiet surprising that no one pointed out so far that Travelport is owned by IndiGo's owner- InterGlobe Technologies.


Incorrect. Travelport is not owned by Interglobe . Interglobe is only their technology partner in India for their Indian operations. So Interglobe manages it and runs it for them in India. The media always gets it wrong, if that's your source.
 
klakzky123
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 7:10 pm

avier wrote:
klakzky123 wrote:

Right but the important point is that 6E distributes either through direct API or Travelport. So travel agencies either setup direct integrations with the reservation system or they retrieve inventory via Travelport. The Amadeus GDS isn't part of the equation.

AI consequently is doubling down on Travelport as a means of distribution which makes sense in India. Amadeus GDS marketshare in India isn't particularly strong. Now AI desperately needs to start distributing directly like 6E but that requires a massive technology effort. AI Express and AI run on different systems so selling combined inventories are only possible via GDS. So they need to consolidate everything into a single reservation system and then work on enabling distribution via NDC APIs.

But AI doesn't seem disciplined enough to pull that off. So they'll continue to suffer through GDS segment charges while 6E limits its exposure through its extensive set of direct integrations.


Yes. I get the part of the GDS of Amadeus not being part of any of that equation. 6E just uses their passenger reservation system (of Navitaire) as direct selling means.

Also, are you saying that AI does no direct selling at all, and its all through GDS? That is they don't sell direct through API's ?
It's just this whole direct selling and GDS gets confusing.

I also felt the same way that if they ( along with AI Express) used a system like Navitaire, I'm sure they could do more direct distribution then and also combine the two airlines intenaries.


AI Express uses a similar system to Navitaire. They're on Radixx which is also a ticketless reservation system with a strong API suite to enable direct access for agencies.

So backstory on direct distribution, ticketed reservation systems historically could only distribute to agencies via a GDS. There was no means for an agency to retrieve availability and sell a ticket without doing it via a GDS (fares are retrieved from ATPCO). What this meant was that airlines were largely held hostage by the three GDS companies and forced to pay the GDS for each segment that was sold.

Navitaire pioneered the idea of a ticketless reservation system and as a result they built an API suite that allowed travel agencies to directly get availability and fares from the reservation system as well as being able to book directly. Navitaire hosted carriers could basically bypass the GDS and directly partner with travel agencies (thereby saving the GDS fees). This is why Indigo, Spicejet, etc.. are on Navitaire. They have a huge cost advantage because of their ability to distribute directly.

Over the last three years, IATA has issued standards to enable ticketed carriers to sell directly through its NDC APIs. There are now API standards for ticketed airlines to directly distribute availability, fares as well as direct ticketing (so the agency is selling tickets directly from an airline rather than through the GDS). These bookings are akin to booking directly on an airline's site (but its being sold by an agency).

Air India has two problems.

1. AI and AI Express are on two reservation systems and NDC APIs aren't mature enough to support interline between two reservation systems. So they need to combine onto a single reservation system.

2. AI then needs to build strong support for NDC APIs and get travel agencies to use those APIs. Funny enough, Navitaire's strength in India (Indigo, Spicejet, GoAir and AirAsia India) means that Navitaire API standards are far more popular in India than IATA's NDC API standards. But AI doesn't seem disciplined enough to both implement the NDC APIs and get travel agencies to connect to those APIs in lieu of going through Travelport.
 
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usxguy
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 8:14 pm

I actually think 1A is the big loser here. Air India can just tell agents to use their travel agent portal. Viola, $12 USD/segment savings.

Regarding the Amadeus connection, it does affect all of 1A if Air India has cancelled the GDA, then 1A can't show Air India content, can't issue an e-ticket for Air India, etc. Air India can also stop sending AVS (inventory) messages to 1A, which then makes everything even harder.
xx
 
RJNUT
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Re: Air India ends Amadeus ties, travel body opposes.

Fri Dec 07, 2018 8:28 pm

usxguy wrote:
RJNUT wrote:
These type GDS severances usually get patched up after while. Usually just some type of posturing.


But its never gone this far. Its only been a threat.

It has not gone this fare with AI before, perhaps, but I have seen other airlines pull inventory out of certain GDS's and then ultimately reinstate.
 
avier
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Re: Air India ends Amadeus ties, travel body opposes.

Sat Dec 08, 2018 10:10 am

klakzky123 wrote:
.
AI Express uses a similar system to Navitaire. They're on Radixx which is also a ticketless reservation system with a strong API suite to enable direct access for agencies.

So backstory on direct distribution, ticketed reservation systems historically could only distribute to agencies via a GDS. There was no means for an agency to retrieve availability and sell a ticket without doing it via a GDS (fares are retrieved from ATPCO). What this meant was that airlines were largely held hostage by the three GDS companies and forced to pay the GDS for each segment that was sold.

Navitaire pioneered the idea of a ticketless reservation system and as a result they built an API suite that allowed travel agencies to directly get availability and fares from the reservation system as well as being able to book directly. Navitaire hosted carriers could basically bypass the GDS and directly partner with travel agencies (thereby saving the GDS fees). This is why Indigo, Spicejet, etc.. are on Navitaire. They have a huge cost advantage because of their ability to distribute directly.

Over the last three years, IATA has issued standards to enable ticketed carriers to sell directly through its NDC APIs. There are now API standards for ticketed airlines to directly distribute availability, fares as well as direct ticketing (so the agency is selling tickets directly from an airline rather than through the GDS). These bookings are akin to booking directly on an airline's site (but its being sold by an agency).

Air India has two problems.

1. AI and AI Express are on two reservation systems and NDC APIs aren't mature enough to support interline between two reservation systems. So they need to combine onto a single reservation system.

2. AI then needs to build strong support for NDC APIs and get travel agencies to use those APIs. Funny enough, Navitaire's strength in India (Indigo, Spicejet, GoAir and AirAsia India) means that Navitaire API standards are far more popular in India than IATA's NDC API standards. But AI doesn't seem disciplined enough to both implement the NDC APIs and get travel agencies to connect to those APIs in lieu of going through Travelport.


Thanks a lot for shedding more light on that, and for typing all that out. :hearts:

I was always trying to get my head around all the distribution methods, and they can be complex and confusing. It's more understandable now.
I have also read of how many airlines success and low cost model , especially LCC's, is achieved through having low distribution costs . That plays a major role in eliminating unwanted expenses. I hope AI can sort that out and consider it. It's funny how India has tons of IT labour and IT infrastructure, and AI is struggling on that front still.
 
dtw2hyd
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Re: Air India ends Amadeus ties, travel body opposes.

Sat Dec 08, 2018 12:51 pm

Where does SITA fit in all this? I thought they developed a very good app for AI. Does it allow direct distribution and sales?

In general airline GDS and reservation systems are archaic. Read comments by Tim Clark and Christoph Mueller. Archiac software is the primary reason for most airlines are stuck with legacy class segregation model (First, Business, Premium Economy, Economy Plus, Economy, Basic Economy) but cannot offer al-a-carte where an airline can sell, economy seat + premium meals + lounge access (or) lie-flat seat + economy meal or any possible combination airline want to offer to generate more revenue.
 
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lightsaber
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Re: Air India ends Amadeus ties, travel body opposes.

Sat Dec 08, 2018 2:50 pm

usxguy wrote:
I actually think 1A is the big loser here. Air India can just tell agents to use their travel agent portal. Viola, $12 USD/segment savings.

That pretty much sums it up.

In a low (actually negative) margin business, any such extraordinary expense must be cut. Before this thread, I didn't realize how much AI was giving away to travel agents! That was obviously a non-viable business model. What other skeletons lurk in the closet?

The only way to fix this is 100% privatize AI and let them sink or swim on their own merits.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
RJNUT
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Re: Air India ends Amadeus ties, travel body opposes.

Sat Dec 08, 2018 3:13 pm

lightsaber wrote:
usxguy wrote:
I actually think 1A is the big loser here. Air India can just tell agents to use their travel agent portal. Viola, $12 USD/segment savings.

That pretty much sums it up.

In a low (actually negative) margin business, any such extraordinary expense must be cut. Before this thread, I didn't realize how much AI was giving away to travel agents! That was obviously a non-viable business model. What other skeletons lurk in the closet?

The only way to fix this is 100% privatize AI and let them sink or swim on their own merits.

Lightsaber

These arent really skeletons. And privatization has nothing to do with distribtuion issues. You do realize that every other airline in the world of any size whatsoever(including our beloved US3 and AI's big rival 9W) participates in Amadeus as well as most other GDS' for sales exposure? Think of the GDS as shelf space to display your wares. All airlines complain LOUDLY about GDS and their fees but accept them as necessary evil . We are still light years away from any major breakthrough in distribution concepts although NDC and API are tossed about as solutions when in reality they aren't on any large scale. I spent my entire career in this milieu so have a good understanding. I have always argued: "you want out of GDS?, OK then simplify down to Southwest-style product levels and then we can talk!"
 
smartplane
Posts: 270
Joined: Fri Aug 03, 2018 9:23 pm

Re: Air India ends Amadeus ties, travel body opposes.

Sat Dec 08, 2018 7:23 pm

Airlines receive retrospective discounts based on volume from the GDS providers, which favours legacies and those with stable, or especially growing volumes.

Alliances negotiate segment discounts with GDS providers when passengers are routed exclusively with alliance members.

GDS and alliance fees are not the same for all participants / members, or ticket / trip values.

GDS providers are out of step with the number of alliances plus outsiders. Rationalisation of GDS providers and alliances is inevitable.

The move may be as much about improving Star Alliance benefits and fees, as reducing GDS costs.

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