Delhi court upholds Air India PSS tender decision

The High Court of Delhi has dismissed an appeal from Sabre Airline Solutions to set aside a decision at Air India (AI, Mumbai Int’l) to award a passenger services system contract to longtime rival Amadeus IT Group, India’s Business Standard newspaper reported on November 19.

“We are not inclined to grant any relief to the petitioner, and the petition is accordingly rejected,” a bench at the court said in its ruling two days previously.

In March, Air India had invited bids for a new seven-year contract, covering functions such as ticket reservations, flight scheduling, e-commerce, and loyalty programme management, as its existing agreement with information technology multinational SITA is due to end in June 2022.

United States-based Sabre sought court action in June 2021 after Air India selected the European IT provider Amadeus for the contract. Sabre accused the Indian flag carrier of favouritism in the tender process, arguing that Air India had tailored the selection criteria to suit Amadeus. It claimed that its products would save Air India INR9 billion rupees (USD121 million).

However, the court judgement claimed that while Sabre’s bid was INR10.39 billion (USD140 million) and Amadeus quoted INR19.57 billion (USD263 million), Sabre’s overall score under the quality-cost ratio was lower. The court said that to interfere in commercial transactions, it must be satisfied that an element of the public interest exists.

“Keeping in mind that Air India is under financial distress and is being disinvested, such a tender is not in the public interest and cannot be accepted,” the bench at the court noted. “Air India is the best judge of its own requirements, i.e., choosing a system that gives an edge to the airline over its peers, which ultimately will translate into increased revenue. As a result, merely because the financial bid of the petitioner is the lowest would not mean it is automatically to be accepted.”

Amadeus and Air India signed a new distribution deal in January 2020, ending a protracted period of negotiations after the airline withdrew its inventory from Amadeus’ global distribution system. In 2018, like other carriers at the time, Air India announced it would be reducing its presence on GDSs and awarded another provider, Travelport, sole distribution rights of its domestic inventory. Legal proceedings from Amadeus began, but a year later, Amadeus and Air India forged a new relationship. At the same time, Sabre announced that Air India content would no longer be available in its GDS, saying it had been trying to negotiate a new deal with Air India for the “better part of a year.”