SpiceJet currently has its own booking system, hosted on Navitaire’s New Skies’ Passenger Service System (PSS) through which it makes its inventory available to everyone via its website. A PSS consists of three parts: Central Reservation System (CRS), in other words, booked inventory, an airline inventory system (free inventory) and a departure control system (DCS). The PSS essentially is the backbone of the airline’s booking system.
Global Distribution System, on the other hand, is a ticketing platform used by travel agents to access real-time inventory in one place for hotels and airlines. Say, for example, a travel agent wants to book a flight from A to B, a few clicks on the GDS will display how many seats are currently available, at what fares across airlines which are operating the route and have a partnership with that GDS provider. They are the pipes which carry the fare data of all airlines who choose to be on a GDS, to all travel partners across the globe. That means, a travel agent in far-flung Cairns, New Zealand would be able to offer Jet Airways as a choice to their customer for flights in India, even if they don’t know personally about the airline.
If GDS wasn’t there, then he would have to look at all airlines websites individually and compare the fare. All OTAs use a GDS for booking. MakeMyTrip.com uses both Amadeus and Travelport and so-on. GDS is a universal platform for booking airline tickets to hotel rooms to car rentals and so-on at one place. That’s why it is the preferred tool for travel agents as it is convenient and fast.
Now, SpiceJet has signed up with Amadeus as their GDS partner. This will allow travel agents all over the world including India who use Amadeus’ GDS to book tickets on SpiceJet. Amadeus is the largest GDS provider in the world and has a 55% market share in India.
SpiceJet isn’t the first LCC to partner with a GDS to expand its distribution network. IndiGo partners with Travelport, though IndiGo’s parent is also the service provider for Travelport in India. Navitaire, SpiceJet’s PSS provider, is owned by Amadeus. This will help in synergy with Amadeus’ GDS.
SpiceJet has been considering selling its inventory via a GDS for a long time.
- In 2010, when SpiceJet was considering an international foray, they planned to tie up with Sabre especially for bookings in Sri Lanka for their Colombo flights. Don’t know, if they did eventually.
- In 2012, SpiceJet tied up with Amadeus corporate booking tool but there was negligible business from it.
- In 2016, SpiceJet tied up with Hahn Air to access their GDS and sell tickets in Europe though there was no direct relation between SpiceJet and the GDS.
Earlier the options that were available to book tickets on SpiceJet were,
- Direct bookings: Use SpiceJet’s own PSS (website) to directly book tickets
- Travel Agents: They would also book tickets on SpiceJet’s website and charge a convenience fee
Now, travel agents using Amadeus GDS will be able to book via the GDS and those who use any other GDS provider will be able to book directly with SpiceJet, levying a fee in both cases.
So basically, adding a GDS partner increases an airline’s distribution reach and makes it’s convenient for travel agents.
So why aren’t airlines keen to use a GDS?
A GDS provider charges a certain fee, on every segment, which the airlines have to pay. The GDS provider and travel agents share this commission. It can be around USD 10-16 or even more per ticket. Airlines like Lufthansa pass on this fees to the passenger. Lufthansa charges around 16 euros per passenger per trip segment as GDS fees.
SpiceJet is also planning to pass on the fees to the passengers if one book via Amadeus’ GDS. If you use book directly with SpiceJet (current method), you won’t have to pay the additional fees.
Ajay Singh, CEO of SpiceJet said,
I am delighted to announce our new partnership with Amadeus which will help SpiceJet reach new customers both within and outside India. SpiceJet is in the midst of its most exciting growth phase and I am sure that this new distribution network will enable a large number of customers to connect with our huge domestic and growing international network.
SpiceJet’s huge international growth plans will benefit from this partnership as Amadeus is the largest GDS provider in the world. Travel agents around the world can access SpiceJet’s ticket inventory. Amadeus will gain a customer in India after losing Jet Airways and Air India to Travelport back to back.