BPO SEGMENTS: Opportunities Galore

Airlines BPO: Jet, Set and Go

It has moved on from being predominantly captive to a vibrant third-party industry in just two years

Contrary to common perception, the airlines industry has not been a prolific outsourcer, despite its highly competitive nature. However, in the last 3-4 years, airlines have started outsourcing. That is also the time when India saw the process offshoring wave. So it was no coincidence that India has already become the hub of airlines BPO. According to studies, the revenue from the airlines process outsourcing could reach $50-60 million in a few years.

Airlines BPO is very distinct from other services in more ways than one.

Offshoring preceded outsourcing. Both Lufthansa and Swissair came to India as early as 1992. British Airways came in 1996, much before the 1999 Nasscom-McKinsey report. All the three started as captives.
It is still by and a large a specialists’ game. It has been dominated by either airlines offshoots like WNS, AFS, Aviation Solutions, and RDM or specialized IT-services companies (like Kale Consultants and Navitaire). Only a few of the big Indian BPO companies execute these processes.
India is at the center stage. Almost all big airlines BPO companies are in India. India could get more than half the airlines work in two years time.

The Industry
The industry, which was predominantly captive just two years back, has become a vibrant third party industry. WNS, the no. 1 among the bpOrbit Top 15, started as a British Airways captive. It changed its ownership pattern in 1999 with Warburg Pincus acquiring majority stake. Apart from British Airways, it has around 10–15 clients. British Airways is also opening up a captive call center in Gurgaon. The trend started by WNS was followed by AFS after Swissair sold it to partner TCS in early 2003. AFS is now ramping up its manpower from 400 to over 2000.

Reservation Data Maintenance India (RDM) which was started in 1992 as a Lufthansa captive, later became a strategic JV between Lufthansa Commercial Holding and the Bird Group. Another player to start as a captive before taking other clients is Mercator, the IT division of the Emirates Group.

Major Airlines BPO Players in India
Company	Type	Location	Strength in Airlines Processes	Services	Clients
WNS Global Services	Independent, venture-backed	Mumbai, Pune	1500	Revenue Accounting, Telemarketing, Reservation, Customer Interaction	British Airways, two of the top five European airlines and three of the top five airlines in North America
AFS	Subsidiary of TCS	Mumbai	600	Revenue Accounting, Reservation, Telemarketing	Brussels Airlines, Tyrolean Airlines, Swiss International Airlines, Sabena, Lauda Air
RDM	JV, Non-captive	Gurgaon	300	Revenue Accounting, Customer Interaction, Telemarketing	Lufthansa, Austrian Airways, Polish Airlines
Kale Consultants MPS	BPO Division	Mumbai	300	Passenger revenue accounting, Cargo revenue accounting, Remote proration services, Refunds processing	Qatar Airways, Air Luxor (Portugal), Canadian North, Malaysian Airlines, Two smaller airlines in Europe
Mercator	Division of Emirates, Non-captive	Mumbai	150	Customer Interaction, Frequent Flyer Solutions, Emergency Response Solutions, Air cargo Solutions, Airline Financial Solutions	Emirates, Air New Zealand, Olympic Airways, Philippines Airlines, Qantas, Singapore Airlines, SriLankan Airways, Virgin Atlantic
Wipro Spectramind	Subsidiary of Wipro	Delhi	100	Reservation Services	Delta Airlines
Daksh	Independent, venture-backed	Gurgaon	60	Customer Services	Fortune 150 airlines
Air India	Captive	Mumbai	50	Customer Interaction	Air India
British Airways	Captive	Gurgaon	NA	Customer Interaction	British Airways
Air France	Captive	Mumbai	NA	Customer Interaction	Air France

The lucrative business prospect is now attracting even broad-based BPO players. Wipro Spectramind staged a coup de grace by bagging a contract from Delta Airlines by competing against WNS. Daksh is the latest to enter the fray. They join the only historically independent airlines BPO company, Mumbai-based Kale Consultants. The business is believed to have generated close to $2.5 million for Kale in 2002-03 and is likely to increase to $4-4.5 million by the end of 2003-04.

Prominent challenges for BPO companies are the availability of skilled manpower. Currently, BPO players recruit fresh professionals and train them.

With more and more airlines waking up to the opportunity, this will be an interesting area to watch out.

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