GDSs Seek To Integrate Into Agent Business Models

GDS companies choose not to rest on their laurels but seek to integrate themselves into the agent's universal platform on which they do business, discovers Bhisham Mansukhani...

To say that a GDS is best used to block airline seats is to say that television is best used to watch the news.

What was once a miracle of convenience for the agent is now a given he can almost take for granted, and in fact, expect to do more for his business. This complacence has no negative connotation but is rather a rich tribute to the evolution of the GDS.

A Paradigm Shift

Ask an agent how he conducted business in the days of bulky airline schedules and haughty telephonic exchanges with airlines and he probably will not even hanker an answer. This is because it now seems like it never happened at all. Such is the paradigm shift that the GDS has perpetuated.

The GDS began to seep into India in the early 90s, slowly replacing the cumbersome airline tomes. The role of the GDS over the years went quickly from checking seat availability to checking fares and then ticketing. Now, that final link, ticketing, has become the most basic function.

Viiveck Verma, MD of Abacus India, says, "The agent can do just about anything on the GDS. From making special arrangements for a passenger with a medical condition to creating a full-fledged FIT itinerary and sealing a confirmation without a single phone call. The level of detailing with a GDS is virtually absolute and without the teething overheads. This makes the agent's participation level in the entire reservation process more active. Foreign exchange is one aspect which we touch only to provide information and not to transact. But that apart, we have covered all facets."

Vishnuvardhan Bhat of VB Consultants, a Bangalore-based travel agent, agrees. He says, "With the introduction of GDS, many concepts came into being - concepts like Electronic Data Interchange (EDI) within a supply chain, the first commercial real-time application, the realisation that computers had many other applications. It has helped the agent concentrate on servicing and expanding his customer base."

Efficiency and Innovation

The GDS has permeated the core agent business wherein the system is available to the agent and his implant on the Internet. This saves the agent a substantial amount of overhead expenses.

The cycle of a transaction has been scaled down considerably. Phone calls and couriers for confirming and delivery of tickets has been done away with using satellite printing of tickets. The cost savings therein are substantial.

Not content to stop at that, GDS is actively looking at more innovations in so much as providing airlines with solutions to distribute their group business and apex fares. The most inherent advantage that the GDS has, and one which it must capitalise on, is by adding rail products and mid to lower segment hotels. This will add to the existing database of suppliers for agents.

While the mention of GDS instinctively draws up visions of real-time technology, there is more to a GDS relationship with an agent than introducing them to relevant technologies. Technology is only an enabler. It cannot replace the fundamental business system but only help it by virtually replicating certain processes thereby optimising resources.

Instances of this range from a mere booking transaction to more sophisticated tools like accounting and travel insurance. All it needs now is a common interface and a single entry.

The Human Element

It would be a misconception to perceive GDS as hi-tech rather than 'high touch'. Verma says, "Our sales team on the field remain in close touch with the agents to educate them and increase their efficiency to match the level of business travel agents. While there will always be a difference between the two separated by the infrastructure, they can always compete with each other in terms of professionalism and knowledge base," he says. He reveals that Abacus India will soon tie up with training institutes to increase the number of trained professionals.

GDSs can also take credit for a recent phenomenon, though not explicitly, that has seen agents diversify into services other than ticketing. Agents are taking interest in a whole range of products, particularly non-air and a number of diverse interfaces, accounting packages in particular. This has prompted GDS companies to increase the effective footprint of the annual roadshows by facilitating it through regional offices, thereby covering five cities in each region.

Most agents who are progressive are already looking at how to enhance their revenue streams. This phenomenon can be observed across the country and not just in small demographic concentrations. The importance of non-air products is being driven not just by shrinking margins but through evolution of their business model.

However, while airlines and GDS frequently discuss distribution-cost optimisation, it will not impact the agent negatively. The only consequence can be the addition of newer tools for their own convenience and wide distribution. Airlines see their costs incurred towards GDS as justified since it plays the role of their reservation team. While cost rationalisation is an ongoing endeavour, it is not bound to hit the agent.

Technological Error

It is widely believed that agents are willing to take the GDS cost as they lucidly see the premium of information and its time utility spurred by the Internet. In the event of cost rationalisation by GDSs, there will be simultaneously higher efficiency that will enable them to absorb that cost instead of passing it on to the agent. However, certain value-added products like tool distributors will have to be borne by the agent.

Some agents are still a tad cautious. Ranjan P Abraham of Clipper Holidays, says, "There has been a sea change in the way we operate after GDS came into the picture. But with modernisation, there have been problems too. The airlines penalise us if there are any technological errors. Consequently, we have even started receiving debit notes. Moreover, when there is a special deal to be offered on a particular sector, we have to shell out the entire amount and wait for weeks to get credit notes. But apart from them, the system has been a boon."

Bringing out another point of disadvantage, Bhat adds, "Today, with the Internet, the itinerary has been broken within the traditional travel distribution supply chain, which has also resulted in infinite GDS data available to the customer, negating the relevance of a travel agent. This has restricted the number of actual bookings."

But the fact is that only agents will run this business. GDSs can only cataylse it. Verma adds, “We will only look into areas such as MIS and Intranet for travel policies. We are already helping agents by designing their web sites that they will use to service their corporate clients. We are also offering mobility as agents are able to access their records and make bookings in the midst of a beach vacation, cue the reservation back to office to be followed up.” It simply does not get any more convenient.

(With Inputs from Vyas Sivanand)