IndiGo ties up with Travelport, aims for larger global presence

New Delhi: IndiGo on Thursday tied up with Travelport, a global distribution service provider that will provide the airline access to 180 countries.Global distribution systems (GDS) are tools used by travel agents to make airline bookings.

The trend earlier was that budget airlines did not subscribe to GDS because of the higher costs but this is changing with AirAsia, EasyJet, RyanAir and Tiger signing up with GDS providers. 

Full service Indian airlines Air India, Jet Airways and Vistara use GDS. SpiceJet, a budget airline, has a tie-up with GDS service provider Amadeus for corporate bookings but sources said business from that platform was negligible.

“With a fairly large presence in India, it is a logical extension of our distribution strategy to make this alliance. Through this, IndiGo has access to a global presence across 68,000 portals without spending an extra penny,” said Aditya Ghosh, president, IndiGo. 

Access to the portal will be provided to domestic agents immediately and in phases for global agents from 2017.

“We will increase our presence on overseas routes among destinations that are in the A320 range,” Ghosh said.

IndiGo has a 42% share of the Indian aviation market and analysts expect it to grow further as it adds capacity at a rapid pace.
 
Ghosh also said the arrangement with Travelport would help it to offer its ancillary services to a larger clientele. 

“What happens now is for booking an ancillary service, the passenger has to come to the airline portal. There were also a lot of products that were not available to travel agents. Those now become available for the passenger through Travelport,” he said.

Ancillary revenues are an important source of income for budget airlines as yields face pressure due to a pricing war. “Low-cost carriers earn a pretty high share of revenue from ancillary sources. This tie-up will help IndiGo boost that,” said Gordon Wilson, chief executive officer, Travelport. 

Indian airlines trail their peers in ancillary revenue collection. According to a survey by US-based consultancy firm IdeaWorks Company, carriers Spirit, Allegiant Air and Wizz Air earned 43.4, 37.6 and 36.4% of their revenue from ancillary sources. In comparison, IndiGo earned only 12.4 of its revenue in 2015-16 from ancillary sources.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.