NACIL outsources ticketing business to a competitor
A decision by the money-losing state-owned company that runs Air India and Indian Airlines to outsource its entire ticketing business to a competitor may cost it already dwindling market share, experts fear. Soubhik Mitra reports.india Updated: Jul 09, 2009 23:42 IST
A decision by the money-losing state-owned company that runs Air India and Indian Airlines to outsource its entire ticketing business to a competitor may cost it already dwindling market share, experts fear.
The National Aviation Company of India Ltd (NACIL), which runs the two carriers, chose InterGlobe Technologies, the company that runs Indigo Airlines, earlier this year over five other bidders, none of which are involved in the airlines business.
The other companies in contention for the contract were Intelenet Global Services, Azure Technologies, I Energizer, First Source and Omnia.
Before NACIL signed the contract with InterGlobe in January, Omnia handled Indian Airlines’ ticketing services, while Intelenet handled all of Air India’s domestic customer relations. NACIL itself handled all its international customers.
“Why did the company have to switch to another service provider?” asked a senior Air India employee, who did not wish to be named because he is not authorised to talk to the media. “And if it had to do it, then why to a competitor? It’s akin to asking Coca Cola to sell Pepsi’s products.”
NACIL did not respond to Hindustan Times. On July 1, the company’s spokesman, Jitendra Bhargava, said he would reply in a day. We did not receive a response even after repeated reminders.
Experts found the deal unusual. “Companies are extremely careful about sharing such data with anyone, let alone with competitors,” said Advait Sethna, a partner with Shetty & Sethna Associates, which specialises in corporate contracts, deals and mergers. “The company runs the risk of giving out strategic information about itself.”
Vishwas Udgirkar, executive director at PricewaterhouseCoopers India, concurred. “It is a rare deal. It could endanger the company’s market share.” Experts pointed out that InterGlobe Technologies used to handle the call centre operations of India’s first low-cost carrier, Air Deccan. Within a year, InterGlobe had started its own airlines, Indigo.