Skift Take
TravelSky, China's state-backed airline distribution and software services company, reported solid revenue growth in 2018. But the company's insulation from market competition risks creating complacency, and some signs suggest Chinese airlines are frustrated.
An easy way to lose friends in China is to talk about how its companies receive state money and protection from foreign competitors.
But you can't evaluate the performance of travel technology giant TravelSky without looking at how it benefits from having a total monopoly — with zero rivals in its domestic market for its flagship services.
The state-backed company continues to grow. On Friday, TravelSky released its audited annual results. In 2018, the company generated $1.11 billion (RMB 7,472.1 million), representing an increase of 11 percent year-on-year.
However, some Chinese airlines that heavily depend on its services may wonder if TravelSky is adequately keeping pace with global needs for online distribution, retailing, and passenger services.
Like its counterparts abroad — Amadeus, Sabre, and Travelport — airlines created TravelSky. All of the domestic Chinese airlines participated in TravelSky's birth in 2001, and a few continue to have ownership stakes.
Last year TravelSky's revenue growth of 11 percent was slightly less than its overall volume of passengers process, though it was broadly in line with an estimated 11 percent increase in passengers flying domestically in China. TravelSky has a lock on the data exchanges related to domestic flights. But it would need to grow at a rate faster than the average in passenger growt
