Abacus Values Outbound FIT Market At US$ 17 Billion

Bhisham Mansukhani - Mumbai

Pushing its relatively modest share of the GDS market higher, Abacus is positioning itself to tap a FIT Indian outbound market it values at US$ 17 billion and counting.

Viiveck Verma, managing director, Abacus India, said that the GDS grew more than 160 per cent during the last fiscal year of 2004-05. It has recognised the sub-agents as critical to the growth of domestic low cost aviation in the country.

	The recent growth trends in the Indian outbound market has seen the emergence of the FIT. This has entailed a host of different booking requirements, a lot of which are non-air
Viiveck Verma

Abacus' FIT business reportedly witnessed an 18.4 per cent increase in bookings. "The recent growth trends in the Indian outbound market has been the emergence of the FIT. This has entailed a host of different booking requirements, a lot of which are non-air. Now, considering that such bookings constitute just about two per cent of our business in India, the room for growth is huge," Verma said. Abacus registered about 60 million overall bookings for the year 2004.

While the travel insurance reservations grew by 100 per cent, its share, Verma said, was still relatively small. On the other hand, hotels and car rentals constituted a larger share of the non-air business. Verma revealed that Low Cost Carriers (LCCs) had so far decided against the GDS methodology but he was confident that it was only a matter of time. "LCCs will inevitably shift to the GDS platform when their distribution costs justify it. These costs are already increasing as some have admitted that agents are their most prolific points of distribution. In fact, we are already in discussion with some of them," Verma said. He expects some of the scheduled carriers to demand similar, low cost software in due course but he said that they may have to do so at the risk of diluting the sophisticated booking system they currently use.

The full service carriers, however, are looking at adding value so the two markets are different in that sense. To put the difference in the requirements of the LCCs and full service carriers vis-a-vis GDS, the cost for the latter is 50 to 60 per cent," Verma revealed. Value Air is one of Abacus' leading Asian low cost airline client.

Verma also recognised the non-IATA agent as a critical driver of the LCC growth. "Sub-agents will drive this business, given their reach within India and the market the LCCs are looking at. Even if the BSP (Bill Settlement Plan) pilot for three of the leading domestic carriers does become permanent, it will not affect the sub-agent business," Verma said.