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 is clearly heading towards the LCC model and travelers are voting with their wallets.
He told EyeforTravel.com that a good analogy 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 Travel Distribution Executive Conference to be held in Singapore (on March 18 and 19), told EyeforTravel.com’s Ritesh Gupta, “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.”
The GDS have expanded with new tools to include new content, such as LCC, merchant hotels, etc. In this context, how does Henry envisions the role of GDS going forward?
“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,” said Henry.
He also pointed out, “GDS will remain as the most effective platform for global distribution as we have years of experience in the requirements, solutions and technology that are hard for other travel providers to emulate. By building and aggregating the content, and focusing on pushing it out through a single point of sale, it supports the continual relevance that travel agents have in Asia as they become not only the best source of information to meet travel needs but also the key to quick and easy turn-key travel solutions.”
“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.
According to Henry, the way that Abacus manages issues such as Asia’s diversity, geographically large size and varying scale of markets is through its structure of having a corporate centre providing an overall strategic view and leading the development of new solutions while the company is able to ensure locally relevant solutions regardless of scale through our network of 24 in-market national marketing companies.
“Through this structure, we believe we manage to provide an efficient combination of regional scale with local market relevance delivered in a culturally appropriate way for the many markets we serve,” said Henry.
(Other than Henry, those 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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