Budget carrier SpiceJet on Wednesday announced Amadeus as its global distribution system (GDS) partner in a move to expand its international footprints. The agreement will help the airline to access new markets and grow its customer base.
A GDS is a platform that enables airlines to sell seats to travel agencies and agents based in foreign location. Usually travel agents subscribe to these network providers to search and raise their tickets. These platforms charge the airline a fee for their service. The move will increase SpiceJet’s sales costs at a time when all airlines are looking to trim costs to improve profitability. However, experts are not convinced with the strategy.
“To be on a GDS platform for an LCC is a costly affair. You are not an LCC anymore if you opt for a GDS. It essentially increases cost per segment. From a longevity point of view it is not useful,” Mark Martin, founder, Martin Consulting, a consulting firm, said.
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SpiceJet said its ticket inventory will continue to be sold on other platforms.
“SpiceJet’s entire ticketing inventory will continue to be available to domestic travellers through existing channels as well as Amadeus with a different pricing model,” the airline said in a statement.
Financially-stressed Air India and Jet Airways had recently changed their ticket distribution strategy by cutting the number of GDS platforms to save costs. Both full-service carriers ended their partnerships with Amadeus, which is the largest global air ticket reservation data provider and GDS company.
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SpiceJet chairman and managing director Ajay Singh last month told reporters about the airline’s plans to aggressively expand its international networks. The airline would deploy its fuel-efficient Boeing 737 Max fleet on international medium-haul routes including prospective markets in China and Commonwealth of Independent States (CIS).
SpiceJet operates over 500 daily flights to 59 destinations, including eight international locations. It is likely to add 20 aircraft to its fleet in 2019 with the majority of them being Boeing 737 Max.
“Our new partnership with Amadeus which will help SpiceJet reach new customers both within and outside India,” Singh said.