GDS to Remain Most Effective Global Distribution Platform

Recently, low-cost long-haul carrier AirAsia X's CEO Azran Osman-Rani acknowledged that even as legacy carriers have their place, the mass global travel in his view is clearly heading towards the LCC model and travelers are voting with their wallets.

A good analogy, he said, is in mobile telecommunications, with post-paid and pre-paid products catering to distinct customer segments.

From a GDS' perspective, Brett Henry, Vice President Agency Marketing, Abacus International points out that LCCs are clearly growing rapidly in Asia but it is important to keep in perspective that they have just crossed the 10% total market share threshold.

Henry, who is scheduled to speak in the inaugural session of the Travel Distribution Executive Conference to be held in Singapore (on March 18 and 19), said, "We do believe the LCC model is well-suited to emerging markets of Asia where there are many first time travellers as well as budget conscious short-stay holiday takers. Overall, as a business, our planning is premised on the LCC market share moving towards 20% by 2010. In the past year, Abacus has shown our ability to support the LCC sector with new distribution agreements signed with Air Asia, Air Deccan and Oasis Hong Kong Airlines."

To address the market, GDS have expanded with new tools to include new content, such as LCC, merchant hotels, etc. "Asia is a complex and diverse market as we are still in the early stage of developing a credit culture, journeys are more complex, and there are numerous currencies, visas and IT platforms to contend with. These factors make comprehensive coverage expensive and risky, which in turn enhances GDS's value as a distribution channel," Henry added.

"We also see the GDS playing a bigger role in non-Air than in they have in the past as travel agents' rely on other value-add such as hotels and insurance to supplement their revenue," said Henry.

Other than Brett Henry, those that are scheduled to present during the same session include: Cyril Ranque, Vice President of Asia Pacific Partner Services Group, Expedia; Berthold Trenkel, COO Asia Pacific, Carlson Wagonlit Travel and AirAsia X's CEO Azran Osman-Rani.

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