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More airlines into ‘direct selling’

23 Mar

More airlines are going into the business of “direct selling” their services to business travellers.

Industry players say this is because the airlines are looking to promote their ancillary services directly to such travellers in order to generate more income. At the same time, they can bypass the traditional Global Distribution System (GDS), which travel management companies use to distribute airline data and to book flights for business travellers.

An extra 12.7 centimetres of legroom and earlier boarding time, are examples of ancillary services that helped US airlines make about US$13 billion (S$16.5 billion) in revenue last year. Experts say Asian airlines on the other hand managed to rake in only US$3 billion to US$5 billion from such services. Other than that untapped source of revenue, airlines hope to save cost by cutting out travel managers which make use of the costly GDS. Observers say major airlines have already introduced such direct selling or Direct Connect, while more and more companies are looking into it.

As quoted by some industry leaders, “The reason airlines are going in this direction is to save cost”.

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