Tuesday, April 8, 2008

A Desi GDS?

Jet Airways plans to launch a Global Distribution System (GDS) with other (unspecified) carriers and an IT company (probably Wipro). Per this article, Jet Airways paid close to $40 Million in GDS fees last year, a major motivation for them to develop a new GDS. Per their chief commercial officer "there is no reason why the airline should have to payout so much to the GDS companies. There is so much IT talent in India which can be used to develop a new system that can be used by Jet as well as other carriers". True, but the biggest hurdle is not technology rather it is getting a critical mass of airlines to adopt this system and getting travel agents to use this (an expensive proposition). Case in point G2 Switchworks, an alternative to the established GDS brands such as Sabre, worldspan, etc. G2 which completed its 4 year anniversary this month has had limited success in dethroning the established GDS'. Whether the Desi GDS becomes a reality or not only time will tell. Even if Jet (and other airlines) does not move all its inventory to this new system, but is able to use this as leverage to reduce their overall GDS fees it will be a win for them.

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