News / Poor service levels at online booking platforms could boost demand for GSSAs

11/09/2024

Airline general sales and service agents (GSSAs) are facing challenges from the burgeoning supply of booking platforms – despite a GSSA’s ability to offer bespoke services and high service levels.

While data from WorldACD reveals that GSSAs have improved their market share by 1 percentage point in 2024 so far, growing numbers of forwarders are booking online instead – despite higher costs and lower service levels.

“Everyone is now producing a platform, and it’s easy for forwarders to take the lowest rate. But it’s like banking with Tesco – good luck if you have a service problem,” said Glenn Shires, secretary general of the Federation of Airline General Sales Agents (FEDAGSA).

“Everyone loves a cheap rate, but no one loves a low-cost service level when things go wrong. What we are seeing is that airlines are approaching GSSAs when things do go wrong and a platform has let them down.”

He added that while some airlines expect GSSAs to fix problems free of charge, “increasingly, we are seeing airlines offering a fee to sort it out”.

Mr Shires also explained: “In their race to the bottom using platforms owned by others, carriers frequently miss the inherent credit risk issues of dealing that way. The GSSA controls that and in most cases our members guarantee it.”

WorldACD published data on GSSAs this week, noting that they tend to flourish in markets where airlines would face higher costs fielding their own staff.

“In emerging markets, or where local knowledge and strong relationships are key to success in air cargo, airlines rely more on GSAs,” said WorldACD.

“Examples of such markets include India and Vietnam. Conversely, in developed markets with well-developed air cargo infrastructures and lower operating costs, airlines often handle their own sales.”

GSAs accounted for 49% of sales in the Middle East and south Asia (MESA), up to July 2024, and just 15% in North America. Globally, their market share is 27%, having risen 2 percentage points in Europe, but seen a 1pp decline in MESA.

According to the data, GSAs have the largest market share in general cargo rather than special products, but Mr Shires believes this could change, with special products needing more expertise.

“GSAs can make more from higher rate products than from the mass market. You don’t want to be a kilo millionaire, you want to be a dollar millionaire. Some clowns working for large airlines do it for 2% – that’s not sustainable.”

Mr Shires also expressed concern that forwarders were overpaying to use booking platforms. “One platform derives 60% of its revenues by charging forwarders to see the rates. You shouldn’t have to pay to look in a shop window.”

GSSAs, via not-for-profit FEDAGSA, have launched their own platform, Tricargo – a “neutral, flight search application”.

At no cost to forwarders, Tricargo shows available service and live rates, with booking details passed via API to the airline, which then returns the AWB.