‘Low Cost Carriers Will Bring About Behavioural Changes In The Industry’

Raja Natesan	Seema Luthra

Having recently taken over as the new CEO for Galileo India, Raja Natesan along with Seema Luthra, the new head of strategy and chief marketing officer for InterGlobe Enterprises in an exclusive with Express Travel & Tourism talk about their plansand outlook for the Indian tourism industry

What are your plans for the coming year?

Having spent the last couple of years in understanding the way travel technology is moving worldwide and knowing the trends, we want to use our already established technology capability along with the distribution and product strength of Galileo India and Cendant worldwide to offer much needed answers to some of questions that have confronted and confounded the Indian travel industry over the past couple of years. Some of these revolve around how the travel community gears up for globalisation, how can travel agents increase the value they bring to others and themselves, how can we use e-commerce as an opportunity to intermediate rather than disintermediate, how to apply technology to get better bottom lines etc

Can we have details about the recent significant developments at the company?

Questions have been raised in the past about value, survival, airline commissions etc and there have been some strategic inputs provided by several respected visionaries among the industry. The combination of technology along with distribution is a development that is meant to answer the questions from the 'How do we...' point of view rather than 'What do we...'.

What according to you lies ahead for the industry?

I think, we are headed for some exciting and positive challenges and phenomenal growth, if we learn how to take advantage of opportunities that often disguise themselves as insurmountable problems. Partnership will be the key and of course each one of us will have to choose partners well. When I say well, I mean a partner who has the ability to see ahead, plan for it and guide you through the change. The LCCs will also bring about behavioural changes in the Indian consumer. More choices, cheaper fares and competition.

The government itself is ambitiously marketing India and infrastructure is now coming up fast. When the environment changes, you have to change faster, else you will be simply following the trend whether you understand it or not. So its time now to get out of our 'comfort zone' and make change follow you.

Could you kindly elaborate on your plans for the coming year?

InterGlobe Enterprises enjoys a dominant presence in the areas of Air Transport Management, Travel Distribution and Travel Technology. We have also just made a significant foray into the Hospitality as well as the Cruise segment. Our partners are leading players in their respective field of business and needless to say, we are conscious of the quality standards expected of us. Our business is to ensure that we bring the best of breed infrastructure and outstanding value to our partners on a consistent basis. The role of strategy and marketing is quite simply to differentiate products and services by focusing on key success factors, which influence our business and identify areas of superiority and therefore opportunity.

Broadly speaking, the plans for 2005 would revolve around maximising revenue opportunities and leveraging the strengths of each of our businesses to create a stronger value proposition for our business partners and customers.

What according to you lies ahead for the industry?

As a country, we are living in very interesting times. India is an incredibly young nation and with disposable incomes rising at the current rate, I can say almost intuitively that from the travel industry perspective, given a few triggers India will give birth to a whole new generation of bag packers with a keen sense of adventure and a carefree attitude. Value for money air travel and accommodation will be in great demand in the years to come. The travel industry is buoyant and I expect a combined outbound and domestic traffic growth rate in the range of 18-20 per cent year on year for the next five years but the yields will be under pressure for airlines.

This year will also see the first major e-commerce play in the B2C segment and low cost carriers have set the ball rolling already. As profit margins will come under unprecedented pressure, the travel agents will finally have to consolidate and cross sell to augment their revenues and aggressively adopt new technology to eliminate slow and ineffective manual processes. Tourism inflows will depend largely on airfares and hotel tariffs. As tourism requires a parallel support infrastructure development which is a rather slow process by nature, in the short-term the increase in airline seat capacity will benefit outbound travel and the NTO's of other countries will have a rocking year.