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China Civil Aviation announced to allow foreign GDS to operate in China from October 1st. However, in a market mostly dominated by domestic travel, agencies will probably continue to use China GDS TravelSky…
BEIJING – The Civil Aviation Administration of China officially announced at the end of last week to allow foreign GDS to operate in China for the first time from October 1st 2012. The lifting on restrictions on foreign GDS represents a positive move and comes some eleven years after China joined officially the World Trade Organization.
What does it mean concretely? CAAC new Computerized Reservation System (CRS) regulations will allow non-Chinese carriers to eventually use a GDS based abroad to distribute airfares to travel agents in China. This option will however not apply to Chinese carriers. Until now, carriers must use China own GDS system TravelSky to distribute its air fares. The only exception is Spring Airlines, which has its own system. Some non-Chinese carriers have regularly complained about overpricing from TravelSky when distributing air fares. International GDS system reacted positively to the news.
Amadeus said it will introduce “an innovative suite of easy-to-use solutions that will help travel agencies improve operational efficiency, offer greater customer convenience and help to reduce overall IT spending for travel agencies in China”.
Amadeus China plans now to launch specific products for local travel agencies. Its sales pitch will focus heavily on streamlining accounting procedures and strengthening credit line control, according to a communication from the GDS.
Sabre – already present in China through a partnership with Chinese carriers and TravelSky for hotel content, wants to now develop new content for pricing, mobile and distribution capabilities.
Abacus looks also to strengthen its position as its distribution portfolio includes already most Asian carriers. Abacus partnered in Asia with Sabre and has for example a market share of 75% in Hong Kong and Taiwan. Travelport recently announced full content agreements with Air China and China Southern and hopes to capitalize on its presence in China. With many agencies outside large cities still not being equipped with central booking tools, foreign GDS could at least stimulate the market and eventually lower the price of available services.
But TravelSky will keep the advantage to remain the exclusive GDS of most Chinese airlines. It will likely retain its monopolistic position as China’s air ticket market continues to be largely dominated by domestic travel.
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
