James Foster - Chairman, AirlinePros
Almost everyone in the aviation industry are pleasantly surprised at the level of resurgence of passenger traffic in 2023. North America, and Latin America surpassed their 2019 RPKs by over five per cent and so did the Middle East. Asia Pacific airlines stood at a little less than 10 per cent below pre-pandemic levels.
At AirlinePros we continued our robust performance and growth from last year, thanks to the general industry upswing, growing client base, global expansion, and of course the diligence and resilience of our network of aviation professionals.
In my ongoing column ‘Why AirlinePros’ I have touched on a variety of topics and reasons why clients chose us over others. I have spoken about our ever-expanding global network, superior understanding of the markets, experienced team, expert services, among others. Before I begin with my series for the new year and deep dive into our specialized services, this is a looking back of sorts as we conclude 2023.
I would like to, in this issue, look at the profile of a GSA – General Sales Agent – and what is their role and how they add value to the aviation ecosystem. We did an extensive review both internally and externally to understand the client’s decision-making process, expectations from GSAs, the cost versus quality of services equation, and why some of the big global airlines have decided to work with us to achieve their revenue growth and cost reduction targets.
Why do airlines appoint a GSA?
There are several reasons why they do it, the financial reason has high weightage, which is about a variable cost (Override Commission on Flown Revenue) versus fixed costs. Secondly, the local market knowledge, language, relationships with the travel trade, followed by the fact that a well-oiled and hard-working GSA is paramount to the success of any airline. The relationship an airline has with their GSA is crucial to say the least; their success being directly proportionate to the level of daily interactions.
A well-oiled and hard.-working GSA is paramount to the success of any airline
Airlines normally appoint GSAs in offline markets, to test the market potential at a variable cost. There are many channels which the GSA can support.
- Find synergies with one or more interline or codeshare partner airlines for carrying connecting traffic.
- Joining ARC/BSP with the GSA supervising the agents and doing the marketing and sales.
- Providing customer service.
- Providing reservations and ticketing for direct sales for B2C.
An online operation requires considerable investment in terms of both fixed and variable costs and is normally led by route and market projections. The decision on whether it should be an own operation or a GSA is usually dependent on the capacity being deployed in the market and the projected sales from the market. If an airline appoints a GSA in high sales potential markets, the variable cost paid to a GSA may work out to be much higher than hiring one’s own local team of experts.
AirlinePros as a GSA
The cumulative experience of more than half a millennium we have in the industry speaks volumes not just about the expertise we hold as a global team, but also about the great connections and rapport we share with the local travel trade community. A dedicated legal team helps us navigate our way around all compliance and regulatory requirement in every country. A full-fledged marketing and communications department devises innovative and out-of-the-box strategies that enable us to effectively promote and sell the airlines and other services we represent in the market.
Over the years we have learnt from every kind of challenge that came our way – and we have emerged stronger, resilient, and agile. We have won awards for our business acumen and industry achievements, but this hasn’t come in the way of our constant endeavors to improve. We are flexible and we adapt to changing market conditions and industry trends, we realign our strategies based on client feedback and sector matrix. While I conclude my column emphasizing our vision to be ‘the most innovative and trusted network of airline professionals’ I also reiterate our mission to be the most ethical network in the world, transparent in all our dealings and transactions with clients, regulatory bodies and all other stakeholders.
Have a great year ahead and see you soon with more about our specialized and newly added services which help our clients soar to greater heights.