As the number of travellers booking online keeps increasing, innovators are trying to jump upon the opportunities that open up. Many of them have emerged to offer planning services and activities but we have come across a tech company trying to change how airline tickets are bought. Varun Bansal, a financial service profession with over a decade of experience in the industry, co-founded Airlines Technology. Airlines Technology is trying to increase the value in airline industry. We spoke with Varun to know more. Here is an edited excerpt from the conversation:
What are the key challenges Airlines Technology is trying to address?
A recent IATA survey said, “Air transport continues to create tremendous value for its users, passengers and shippers, and others in the value chain but destroys value for its airline equity investors”.
This is the key challenge Airlines Technology (AT) is trying to address. Re-create value for airlines equity investors.
Airlines Technology is trying to break decades old monopoly and technical challenges of existing GDS systems. In existing closed environment, GDS charges heavy transaction fees without offering full variety of services to end consumer.
With NDC, it will be absolutely transparent shopping experience where customer will get to choose his preferred seats, meals etc then and there on travel agent portal. Airlines will be able to push offers like free upgrades, lounge access, limo pickup and many more things directly to end consumer. All this will happen at much lower transaction fees.
How do you think the rise of LCCs has changes airline industry in the recent years?
LCC’s have been welcome change. It has fulfilled dreams of many who wished to save travel time for business or leisure. It has connected short distances where traditional airlines could not fly viably. It’s so warm to see highly motivated and efficient crew (because of better incentive schemes) working.
LCC has not only given big push to travel volume but forced others to get competitive on prices.
NDC is said to open up a level playing field for carriers of all scale. How do you think it will turn out in the long run?
It will turn out very well in future. Customers will be directly connected with airlines. Due to direct connection, transaction charges of intermediately will fall. Big airlines will not be able to grab customers on brand value only. Consumer will be able to see array of services much before bookings. It opens up horizon of LCC, small and new players who wish to offer better services. Consumers will know what they will get.
What do have to say about the current state of GDS industry? How would this affect the GDS giants?
GDS today are huge and cash rich. All kinds of travel agents have huge loyalty towards them due to big kick backs GDS give from their revenue. Travel agents are most important link in reservation process. Customer comes to them for booking and ironically they are reluctant on NDC. Only reason for them for not willing to go to NDC is huge money they make from GDS.
It’s same condition where first people were reluctant to go to malls for shopping and then e-commerce. But technology like water makes it way in people lives eventually. NDC and its offerings will lure customer and slowly travel agents will be forced to adopt this. I feel it will be 3-5 years process but GDS will fade out eventually.
You can find more details about Airlines Technology here.
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