Pioneer of low-cost airlines in India and the founder of Air Deccan Capt G R Gopinath has likened national carrier Air India's bid to migrate its complete inventory data to Travelport, a reservation system managed by rival IndiGo's group company, to "the sheep choosing the wolf's den for residence".
In a cost-saving move, the national carrier is looking to discontinue putting its ticketing content on existing global distribution system (GDS) firms – Amadeus, Sabre and Abacus – and move it entirely to a single GDS – Travelport, which is managed and controlled by InterGlobe Technology Quotient (ITQ). ITQ is part of InterGlobe group that owns low-cost carrier IndiGo.
Gopinath said it was not a prudent move to "choose a solo service provider" who is your competitor in the market.
"If you are asking whether it's a prudent decision to choose a solo service provider, the owner of which is also your direct competitor, then the simple answer is no - because your critical financial data and pricing and load factors are accessible by your competitor. It's like the sheep choosing the wolf's den for residence. It is very naive to hope you (Air India) will not be vulnerable," he told DNA Money.
Though, he said it was not against the norm for an airline to choose a single GDS.
"All full-service airlines around the world have commercial contracts with multiple GDS who provide access of inventory and rates of airline seats and hotel rooms to travel agents and travel sites to be able, in turn, to sell airline tickets or hotel rooms to customers. And it's normal practice for low-cost airlines to choose only one reservation systems provider to give access of the inventory and rates of the airline directly to the passengers. Both passengers and travel agents have direct access to the airline inventory and it's totally hosted on the internet. So it's okay for Air India to choose only one company to provide Internet Based Reservation Systems," he said.
In an interview with DNA Money in 2008, the former owner of the country's first low-cost carrier Air Deccan had revealed that "a large part" of his airline's failure was information technology (IT). Air Deccan, which was bought over by the owner of failed Kingfisher Airline, Vijay Mallya, was using InterGlobe Technologies Ltd's reservation systems at that time. ITL went on to launch its own low-cost airline IndiGo.
"Then I realised that this chap (IndiGo promoter Rahul Bhatia), who had given me the IT, had my data. So each time my IT collapsed, passengers migrated to his airline. So why would he do anything? We then realised it was sabotage," Capt Gopinath had told DNA Money then.
Air India's exclusive GDS move is being aggressively opposed by travel agents. In a letter to the minister of state for aviation Jayant Sinha, a top executive of Amadeus has estimated that the total loss to Air India due to the Madrid-based GDS's services being terminated will be close to over Rs 1,800 crore.
Air India wants to remove its inventory details from Amadeus platform by December 4 and from Sabre and Abacus by January next year.
A court's order on Monday has put on hold Air India's directive to travel agents to shift its reservation data from Amadeus to Travelport by December 4.
