The American Airlines dispute with Orbitz and Travelport has gone global and will affect Canadian agents’ Galileo bookings.
The fee is being imposed by AA on non-U.S. and non-Caribbean agents. The fee per segment applies to all AA and AA Eagle marketed segments when booked and not cancelled as of 20 December 2010 via Galileo. Worldspan is not affected.
The fee is USD 2.00 per segment but will be billed via BSP Canada ADM. It is based on a booking made by a Canadian user of Galileo irrespective of place of travel origin.
Travel technology online journal Tnooz had reported that that the airline sent a letter to agents outside the U.S. and Caribbean, announcing that it will impose the surcharge on all bookings processed through Travelport’s Galileo and Worldspan global distribution systems.
The initial info was not clear on whether Canadian agents would be affected, but ARTA’s Bruce Bishins was able to confirm that indeed Canadian sourced Galileo bookings will be surcharged. “This is very worrisome and is the reason we reached out to AA early on (we meet with them on 08 December 2010). I hope this does not start other carriers going down the same path,” said Bishins.
In the November 17th letter, AA says Travelport notified the airline of “dramatic booking fee increases” for GDS bookings outside the U.S. As a result, the airline says it intends to pass those fees along to travel agents.
The surcharges would vary depending on location: a travel agency in Germany making an AA booking would have to pay a ‘Booking Source Premium’ of $5 per segment for a booking in Worldspan and $9.50 per segment for a Galileo booking, AA says. With the average flight consisting of perhaps 2.5 segments, that brings the Worldspan booking up to $12.50 and the Galileo booking comes in at around $23.75.
But, that’s a relative bargain compared to the surcharge for a Galileo booking in Indonesia, for instance, which would be $14.75 per segment, or about $36.87 per ticket.
“American 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,” the airline wrote to agencies. “However, to the extent that you particularly value the service of one of these GDSs, American will ask you to absorb their cost premium to American, known as the Booking Source Premium, to the degree necessary to bring the net cost of such GDSs reasonably in line with the cost to American of other GDSs and distribution platforms available in the marketplace.”
Travelport quickly responded to the AA letter with the following statement: “We note American Airline’s intention to impose additional charges for AA bookings made in certain international markets outside of the USA, where Travelport is being used as the GDS. Travelport does not condone this action. It is quite clear that as any additional charges by AA will effectively be borne by consumers, the true cost of booking AA will need to be shown to consumers at the point where a buying decision is made so that consumers can make an informed choice about which carrier to fly.”
Travelport says AA’s plan penalizes “the very people who deliver valuable revenue to AA in these international markets.” It says it remains committed to resolving the dispute with AA “which has arisen through what Travelport regards as an attempt by AA to force travel agencies into their Direct Connect model thereby inhibiting consumer choice between multiple airline providers, pushing more costs to travel agencies and resulting in a less efficient and fair industry model.”
American recently notified Orbitz that it would pull its flights from the online travel agency 01DEC, and Travelport filed suit against the airline, alleging that the withdrawal from Orbitz would violate American’s full-content agreement with Travelport. American is trying to push Orbitz to connect to the airline via AA Direct Connect. Both American and Travelport have filed legal actions over the issue.
American says there will be no surcharges for agencies if they tie into AA Direct Connect when it becomes available or book through the following distribution systems: Amadeus, Abacus, Axess, Kotis, Travelsky, Infini and Sabre.
Travelport’s COO Kurt Ekert responded to its affected customers in a letter criticizing AA’s passing on of increased fees to agents in markets outside of the U.S. in response to GDS fee increases that Travelport had notified AA it intended to impose in those markets.
