IndiGo has tied up with global distribution service provider (GDS) Travelport in a move to widen its sales and distribution network.
This is the IndiGo's first partnership with a GDS but in order to keep its costs under control it will not use the conventional distribution mechanism favoured by full service airlines.
Global distribution systems or GDS refers to travel reservation tools which are used by travel agents around the world to make bookings. In a statement, IndiGo president Aditya Ghosh said "This arrangement with Travelport will allow us to reach new customers both at home and overseas in a cost effective manner without incurring the traditional costs associated with participating in global distribution platforms using old style industry mechanisms."
Incidentally Travelport's products in India are distributed by InterGlobe Quotient, a sister concern of IndiGo.
With this partnership IndiGo will distribute its tickets and ancillary products to all Travelport customers worldwide and will also use Travelport's merchandising capabilities. The distribution partnership will also help the airline reach travellers in international markets as it continues to expand its route network into destinations in the Indian Subcontinent, the Middle East and South East Asia.
GDS are popular amongst full service airlines and both Air India and Jet Airways use it but were shunned by low cost airlines because of high costs. Also traditionally participating on a GDS platform required an airline to be a part of International Air Transport Association's credit based billing and settlement mechanisms. Low cost airlines from India do not participate in the IATA billing settlement mechanism and issue tickets to agents on advance payments.
But the trend is changing and even low cost airlines including Ryanair, Easyjet, Tigerair and AirAsia sell tickets through the GDS.