Navigating the Gaps- The Challenge for Airline CEOs with GSA Partnerships
Airline CEOs frequently face the complex task of balancing strategic ambitions with the performance of General Sales Agents (GSAs), who are supposed to expand market reach, increase revenue, and boost customer engagement. However, the challenge often lies in the misalignment between these expectations and the value GSAs deliver. Instead of taking a proactive approach and leveraging their local market expertise, many GSAs fail to adapt to the airline’s dynamic needs, lagging behind in performance.
Expectations vs. Reality- The Strategic Gap
GSAs are employed by airlines to provide a foothold in regional markets. According to a 2022 report by IATA, airlines in regions like India and Southeast Asia rely on GSAs for 35-40% of their annual revenue(PwC). However, many GSAs do not leverage their local expertise to go beyond the basics of ticket sales. A 2023 PwC survey revealed that only 25% of airlines felt their GSAs proactively sought new revenue streams or untapped markets(PwC).
In India, where the aviation market is expected to grow at 9.7% annually until 2030(PwC), the potential for GSAs to drive growth is significant. Unfortunately, many GSAs stick to conventional sales tactics, missing opportunities to innovate or engage with high-value corporate clients. Airline CEOs in the region are thus left with a partnership that offers limited ROI, exacerbating the gap between their expectations and what GSAs deliver.
The Proactivity Deficit
Airline executives often cite the lack of proactivity as a critical challenge when working with GSAs. A GSA should ideally serve as a strategic partner, bringing market insights, competitor analysis, and suggestions for new partnerships. However, a 2023 CAPA study found that 42% of GSAs only meet their contractual obligations without initiating new routes, products, or innovative sales techniques(PwC).
One Indian airline executive noted, “The challenge isn’t just hiring a GSA, it’s finding one that’s motivated enough to look beyond immediate sales targets and proactively engage in long-term planning.” The lack of a forward-looking approach often results in missed opportunities, particularly in emerging markets like India, where agile competition and evolving consumer demands make proactivity essential.
Skill and Motivation Gaps
A critical issue is the skill gap in many GSAs. Most agents work with outdated sales methods, and over 60% of GSAs surveyed in 2022 admitted they had not undergone any recent sales or digital training(PwC). In India, where the rise of digital tools in travel and e-commerce is reshaping consumer behaviour, this lack of modern skills further hinders the GSA’s ability to deliver on airline expectations.
Additionally, motivation is a key concern. GSAs are often independent entities whose performance incentives may not align with the airline’s long-term growth goals. CEOs must then manage relationships where GSAs are driven by short-term sales targets rather than building lasting partnerships that foster innovation and brand loyalty.
Bridging the Gap- What Can Be Done?
For airline CEOs, particularly those overseeing operations in rapidly growing regions like India, bridging the gap between expectations and GSA performance requires a multi-pronged approach. Offering profit-sharing models or performance-based incentives could create alignment and motivate GSAs to think beyond immediate targets. This is particularly relevant in the Indian market, where 56% of airline revenues come from non-ticketing sources, such as corporate partnerships and ancillary sales(PwC)
Further, training GSAs in data analytics, CRM systems, and digital marketing could help them better understand local market dynamics and consumer behaviour. As noted by an industry leader, “Airlines that invest in building their GSA capabilities see 20-25% higher returns over a 5-year period than those that don’t”(PwC)
Lastly, by fostering a partnership culture, where GSAs are treated as an integral part of the airline’s strategy rather than mere sales agents, CEOs can build more robust, future-proof relationships. Building these collaborations is crucial in India, where the aviation sector is expected to grow to 450 million annual passengers by 2030(PwC).
Conclusion
Managing the performance gap between their expectations and what GSAs deliver remains a complex challenge for airline CEOs. With proactive engagement, realigned incentives, and enhanced skills, GSAs can evolve from transactional agents into true growth partners. In dynamic markets like India, this shift is beneficial and essential for airlines seeking sustainable growth. Airlines can ensure long-term success and stay ahead of the competition only through proactive, skill-driven, and well-incentivised partnerships.
Salil Nath