AA to place surcharge on all Travelport bookings
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American Airlines (AA) stunned the travel industry recently with its decision to charge travel agents outside the US a surcharge on all bookings processed through Travelport’s Galileo and Worldspan global distribution systems (GDSs) beginning in February. AA attributes the surcharge to “dramatic booking fee increases very recently notified to American by Travelport for bookings made in markets outside the United States.” The AA booking fees which are placed on each flight sector, vary from one country to the next and between booking systems. In India, Worldspan bookings will incur a charge of INR166.6 per segment, while Galileo bookings will cost INR542.80 per segment.
The airline said in a press statement that it “wishes to continue to make its public fares and associated inventory generally available through the Travelport GDSs in order to preserve the widest range of agency choice in distribution channels.” However the President and CEO of Travelport, Gordon Wilson, criticised the move for what he regards as an attempt to force travel agencies into using their AA Direct Connect model. Wilson believes the move will inhibit consumer choice and raise costs for travel agents.
The Travel Agents Association of India (TAAI) have expressed serious concern over the move, citing reduced consumer choice and inhibited booking efficiency as worrying aspects of the airlines’ attempt to force a Direct Connect model on travel agents worldwide. AA has already found itself in a legal dispute with Travelport which alleges the airlines’ decision to pull tickets from online travel agent Orbitz violates AA’s full-content agreement with Travelport, and now TAAI are citing a contravention of Resolution 850 of the IATA Agency Programme.
TAAI President Rajji Rai said; “It is not in American Airlines’ interest to hurt the travel agencies who provide the bulk of its revenues. We call on AA to abandon its plan to impose surcharges on agents and instead to resume discussions with the GDS and travel agents to find a sensible way forward.” Industry bodies all over India are openly objecting to AA’s proposal. The President of the Travel Agents Federation of India (TAFI), Ajay Prakash, told Travel Daily that this approach by AA was entirely short sighted. “They have an inventory of one of the most perishable commodities in the world, so it makes no sense for them to do this,” remarked Prakash. As for who will pay, Travelport has said that consumers will have to absorb these additional costs but the TAFI President maintains that they should not have to. “This cost belongs to the airline and nobody else, not the GDS, not the agents, not the consumer,” he said. Prakash regards the move as a breach of various rules and regulations and urged regulators and industry bodies to block and challenge the move. In an effort to rationalise this “heavy-handed behaviour” from AA, the association leader speculated; “This sort of wrangling is often seen when contracts are up for renewal. Airlines have tried this before, Lufthansa and Qantas both tried to do this in the past but eventually reached a settlement with the GDS.”
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