AirAsia embraces GDS to create new demand

AirAsia and AirAsia X are reaching out to the travel trade in an effort to generate new demand for their flights.

The low-cost carrier signed its first ever GDS agreements earlier this year, having previously focused on direct customer bookings.

And speaking at the Travelport Asia Pacific Customer & Partner Conference in Bali last week, AirAsia X’s CEO, Azran Osman-Rani, told a packed hall of travel agents and other industry figures that AirAsia was not changing its business model by targeting the travel trade, but continuing with its long-running goal of trying to generate new business.

Osman-Rani stated that while full-service airlines had traditionally waited for their customers to come to them, AirAsia is trying to “flip the process” by stimulating its own demand. This need to create demand is the result of a business model that relies on AirAsia flying its aircraft more often and with fewer empty seats, in order to remain profitable.

“We take out the idle time,” said Osman-Rani. “AirAsia X has the highest aircraft utilisation rate [of any long-haul airline in the world], at 17 hours a day,” he said. This compares to approximately 12 hours a day for traditional carriers.

“This means that every day we fly 30% more seats and every year we offer 30% more flights. So we generate a lot more inventory from the same aircraft.”

And with AirAsia X now adding more aircraft and flights, with double daily services on many routes, Osman-Rani admitted his airline needs to “create new demand” more than ever.

Technological developments in the GDS industry in recent years are now allowing low-cost airlines to sell their ancillary products like seat selection and baggage fees. And this is allowing LCCs to start embracing the travel trade.

Products like the new version of Travelport Smartpoint, Universal Desktop and Universal API are now offering new graphic interfaces for travel agents. And this has allowed Travelport to sign content deals with several major LCCs in recent months, including AirAsia, Ryanair and Tigerair. Thirty-eight carriers have also now signed up for the company’s ‘Rich Content & Branding’, which improves how airline products are displayed on the agents’ screen, with “significantly more” expected to be added in the coming months.

And despite its move into the more mainstream GDS sector, AirAsia says it is staying true to its low-cost roots. “We’re not talking about hybridization,” said Osman-Rani. “We continue to keep the lowest cost structure of any airline.”

But thanks to the new focus on GDS bookings, AirAsia will now be able to pass on these low fares to the travel trade.