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Last Updated : Jan 10, 2019 06:30 PM IST | Source: Moneycontrol.com

Punjab High Court overrules Air India's decision giving exclusive rights to Travelport for domestic business

The national carrier had decided to shift to Travelport despite several senior officials raising objections against the move.

Nikita Vashisht @nikita_vashisht
 
 
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Nikita Vashisht 

Moneycontrol News 

In a major setback to state-run Air India, High Court of Punjab and Haryana has overruled the national carrier's decision to shift domestic ticket-booking business "exclusively" on Travelport, asking it to continue using the services of Amadeus and others to book domestic and international flights.

"An interim direction is issued to Air India Limited to continue to allow using GDS of Travelport, Sabre, Amadeus, as was being used prior to 4.12.2018 and till further orders, Air India inventory will be made available to Amadeus also, as was being done prior to 4.12.2018," judgement of the HC read. Air India had discontinued services of all other global distribution system (GDS) portals from December 5th, 2018.

The court has given Air India three weeks' time to respond to the judgement with relevant documents.

In October last year, Travelport had announced that it had "won competitive tender process undertaken by Air India for the sole provision of distribution of its domestic flight content in the airline's home market".

The national carrier had decided to shift to Travelport despite several senior officials raising objections against the move. Joining hands with Travelport meant giving access to details of AI's flyers to Interglobe Technologies Quotient, a strategic business unit of InterGlobe Enterprises which is the parent company of IndiGo, India's largest airline by market share and Air India's biggest competitor.

According to documents reviewed by Moneycontrol, former Air India CMD Rajiv Bansal had recorded his opposition to move to a single GDS.

"The market penetration of Amadeus is around 60 percent and that of Travelport is around 30 percent. The financial condition of the airline is delicate and we cannot afford to take substantial risk and adopt an entirely new selling proposition which is vastly different from the earlier model," Bansal had written in an internal note adding that Air India could not "afford to take substantial risk and adopt an entirely new selling proposition, which is vastly different from the earlier model and leads to dependency on only one particular vendor".

Air India did not offer any comment to Moneycontrol on High Court's judgement at the time of writing this report.

Vinod Hejamadi, AI's director, finance, had also flagged similar concerns associated with the proposal to move to a single GDS.

"The travel agents may not take the move of the airline in right spirit, which may affect our business," he had written in a file noting on August 21, 2017.

GDS is a globally connected computerised reservation network offering a one-point access to airline bookings, hotel reservations as well associated travel-related areas including car rentals.

A GDS also connects travel agents and other such service providers with large corporations. Such networks are usually operated in partnership with, either through joint ventures or as supporting business partners, major airlines, hotel chains or transnational travel service providers.

Taking strong stance against the allocation made to Travelport, the court noted that under Article 12, the national carrier was "duty bound" to invite bids before giving "exclusive rights to any agency for GDS".

"It is further contended that Air India was duty bound to call bids in the form of tenders and that Amadeus could not be arbitrarily excluded from sale of tickets for domestic flights," it said.

The court also observed that before giving distribution rights to Travelport, there were "no complaints" against the services of Amadeus, thus making a case in favour of Amadeus.

"Air India has decided to cancel its distribution agreement with Amadeus. The airline’s content is no longer available on the Amadeus system, in India or internationally.  We have presented many options to Air India over recent months in an effort to give it access to the best technology with the broadest network of travel agencies globally and remain open to discussions," Amadeus said in a response to Moneycontrol's query.

The court also noted that "arbitrary" allocation of rights to sell domestic tickets has caused "inconvenience to passengers and travel agent".
First Published on Jan 9, 2019 06:57 pm
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