| It's the day before I am set to fly to Shanghai to moderate a panel at the China Travel Distribution Summit and the news of the week is China opening its market to global distribution systems for the first time. Really? This has been a development years in the talking and planning, and a subject of much contention. Two years ago at the same conference, Ram Badrinathan, then with PhoCusWright, called for a freeing of the market, quoting Gandhi, "I do not want my house to be walled on all sides and my windows to be stuffed, I want the cultures of all the lands to be blown about my house as freely as possible but to refuse to be blown off my feet by any." His remarks about the limitations of China's GDS environment, effectively monopolized by Travelsky, sparked a response from Larry Liang, general manager of airline solutions of TravelSky. First, Liang explained to the audience that there were two types of GDSs – one was run by investors and shareholders who set profitability targets and the other was run by airline shareholders whose aim was to provide services to shareholders and customers. "Both are different business models and have different performance criteria and cannot be compared in the same breath." He then compared GDSs to nuclear weapons, saying there were some countries that chose to have GDS or nuclear weapons and those that did not. "China is a big country; we have to choose what we want to do." So it seems that with the recent announcement by the Civil Aviation Administration of China (CAAC), which released a deregulation provision on August 30, China has chosen what it wants to do – a partial opening up. For the first time, from October 1, 2012, foreign airlines will have the option of using global distribution systems to distribute their air fares to travel agents in China. GDSs are of course excited by the development. Amadeus immediately issued a press release, applauding the "publication of the new CAAC Computerised Reservation System (CRS) regulations which will bring enhanced global distribution technologies to the Chinese market that will significantly benefit the travel industry and consumers in China". It added, "The People's Republic of China airlines will not have this choice, however Amadeus hopes for a further liberalisation of the market in the future." Brett Henry, vice president marketing of Abacus International, called the news "awesome". "I am excited," he said, adding that clearly this signaled the beginning of the opening of the market to foreign GDSs. "Deregulation will follow the slowly, slowly approach China has applied in other sectors – this is the first step toward a full market opening." Noted Amadeus' Brett, "The new regulations are an important step in bringing positive change to the current travel landscape in China. The regulations will enable a new technology infrastructure that will allow for a more dynamic travel booking market with more travel products on offer that will greatly benefit the Chinese travel industry and Chinese travellers." An industry source in China has this observation. "There are still some barriers for the foreign GDSs to expand in China market. Deregulation will only apply to flights on international carriers.BSP ticketing might not be open to foreign GDSs even after the deregulation. "The provision did not mention this, but only said the foreign carriers can use its own ticket stock for the IATA agencies to issue the tickets" "The ability of foreign GDSs to participate in the market, for airlines to issue tickets through a foreign GDS, and for Chinese agencies to book flights via a foreign GDS, are ultimately subject to approval by the CAAC. The provision did not mention how long the application process may take and how they will decide if they will give the approval of GDS participation." Note too that China's market is predominantly domestic, accounting for 80% of air seats, and you know that deregulation still has some ways to go. But Chinese airlines are going increasingly international. At the LCC and New Age Airlines North Asia conference in Macau last week, Jonathan Hutt, strategy planning department and deputy general manager of low cost carrier Spring, said its future is tied to the international market. "You will be seeing more of Spring in the future," he told the audience. Expect to see too intense competition between GDSs as each jostle for position in a market that they've been patiently waiting at the doors of for years. Amadeus has appointed Bart Tompkins as managing director, Amadeus China based in Beijing. During his 20 years with Amadeus, Tompkins has specialised in new market launches in Japan, Russia and Eastern Europe. "Amadeus has played an important role in helping to grow the travel industry across Asia and the rest of the world and we look forward to playing a similar role here in China. We welcome the opportunity to be part of China's on-going success and believe that all industry stakeholders would benefit greatly from modern distribution technologies, such as the technology we offer," he said. In China, Amadeus provides e-commerce technologies that power the international websites of Chinese airlines such as Air China, China Southern and Hainan Airlines. Henry meanwhile said that Abacus was best positioned among foreign GDS's to help airlines and agencies capitalize on the market opening. He cited these factors:
"The western GDS model isn't going to work in this situation and Abacus's unique Asian spirit, focus on relationships, and leading solutions are huge differentiators going forward." It will be interesting to find out this week in Shanghai to see if we can get answers to "what China really wants to do" and get a fuller picture of what this new move means for the GDS long-awaited push into China. Information Source: Yeoh Siew Hoon @ webintravel.com from China Travel Trends http://chinatraveltrends.com | |||
| | |||
| | |||
|
No comments:
Post a Comment