The long-awaited move by the Civil Aviation Administration of China to open China’s GDS market to foreign companies was hailed as “exciting” and “an important step” by the other GDS companies, but it will probably be some months before they can take full advantage of it.
A key component of working with travel agents is participation in the IATA billing and settlement plan in the country.
The long-awaited move by the Civil Aviation Administration of China to open China’s GDS market to foreign companies was hailed as “exciting” and “an important step” by the other GDS companies, but it will probably be some months before they can take full advantage of it.
A key component of working with travel agents is participation in the IATA billing and settlement plan in the country.
But obtaining certification to use the BSP can take several months in any country, and “I don’t imagine China would be any faster,” Bart Tompkins, Amadeus’ managing director for China, said. “It’s a fairly complicated environment.
The market itself also is complex, he said, with a large number of consolidators and wholesalers.
Tompkins, who has launched Amadeus operations in several new markets such as Russia and Japan, said Chinese travel agents are more technologically sophisticated than westerners might suspect, given the presence of the big multinational travel management companies that tend to dominate the landscape.
The CAAC’s loosening of regulations, which will allow foreign GDSs to distribute non-Chinese airlines’ fares and schedules to Chinese travel agents, has been a long time coming.
China was supposed to open its GDS market to foreign competition as a condition of admission to the World Trade Organization, which it joined 11 years ago.
Meanwhile, TravelSky Technology Ltd., which functions not only as the only GDS operator in the market but also as the near-monopoly provider of airline passenger services systems, has formed a number of relationships with western GDS companies over the years.
In 2002, Amadeus agreed to provide TravelSky with access to its non-air content.
This year, TravelSky signed reciprocal hotel content agreements with Sabre and its Asian subsidiary, Abacus International.
By far, its deepest relationship is with Travelport. The companies signed a joint product development agreement focused on advanced passenger service systems technology for airlines worldwide. They also have a hotel content agreement.
According to reports in Orient Aviation, a Hong Kong-based publication, TravelSky has flirted with the idea of merging with an outside GDS company, looking at deals with Amadeus and with Singapore-based Abacus International, which is partially owned by Sabre and is hosted on the Sabre platform.
Despite the challenges ahead in dealing with what is arguably one of the most bureaucratic nations on earth, the non-Chinese companies are upbeat about the changes.
“These new regulations are the green light that many airlines, agencies, suppliers and technology companies have been waiting for, and we expect to see the industry evolve as new travel services become available,” Sabre said in a statement.
Sabre noted that it provides technology to several Chinese carriers. It said it will “work closely with our travel partners, including Abacus, to bring new travel shopping, pricing, mobile and distribution capabilities that support China’s rapidly growing tourism industry, their prosperity and success.”
Robert Bailey, chief executive officer of Abacus International, said the company is “in an ideal situation, especially with our Asia Pacific leadership through our 11 shareholder and partner airlines.”
Abacus also has offices in Beijing, Shanghai, Guangzhou, Shenzhen and Chengdu and is “firmly entrenched” in the Chinese market.
Travelport said it welcomed the “partial deregulation.”
Kurt Ekert, chief commercial officer, said Travelport has developed “a number of significant strategic partnerships in the country. This news very much plays to our partnership approach, and we’re looking forward to providing complementary travel distribution services in the country.”
The company has offices in Shanghai, Beijing and Guangzhou.
Amadeus plans to start off with its Amadeus Link technology, a web-based desktop platform of integrated tools and services, Tompkins said.
Amadeus also is no stranger to the market, he said, noting that “about half the international carriers that serve China are hosted on Altéa,” Amadeus’ passenger services system.
Travel, particularly international travel, is fueling huge growth in the Chinese economy, he said, and until relatively recently, “leisure didn’t exist as a concept.” With the development of a middle class, the Chinese have discovered holidays in a big way.
“You need to bring in modern systems” to deal with the rapid growth, Tompkins said. In the world of travel technology, “this is the last big frontier.”