British Airways Unrolls New GDS Fee, Invoking Ire

Major travel industry organizations expressed alarm over a new fee on GDS bookings, this one from the IAG airline group, parent company of British Airways and Iberia.

The fee of roughly $10 per booking on all sales through GDSs is set to take effect Nov. 1. While it’s less than the $18 surcharge imposed more than a year ago by Lufthansa and its partner airlines on such bookings, the fact that it’s coming from a big player like IAG is stoking fears that more large airlines soon will follow suit. 

In a letter announcing the change to British travel agents, IAG acknowledged that the fee “represents significant change for your business.” But it said the fee is intended to cover the added expense of selling services through GDSs. IAG also referred to the development of IATA’s New Distribution Capability, or NDC, which is laying the foundation for airlines to sell ancillary services to agents. As part of this evolution, IAG said it will soon be rolling out a new booking portal for travel agencies and other sellers.

That wasn’t enough to sway agency groups and others concerned about the impact on business if they’re forced to pass along an added charge to their clients.

“While the creation of a ‘trade portal’ is a positive sign, the complications these changes will present to our member companies’ business operations… and their presumed intent to make it difficult for agents to comparison shop on behalf of clients – only disservices the end traveler,” ASTA said in a statement. ASTA said it will “continue to monitor these developments and advocate for our members.”

GDS owners weighed in too, and predictably panned the move. “We do not think that a surcharge is in the best interest of travelers,” Amadeus said in a statement, adding that it “strongly believes that indirect distribution remains the most cost-efficient solution for all parties on a global scale.”

Travelport said it “regrets” that BA and Iberia “are seeking to penalize consumers who enjoy the benefits of choice, efficiency and value by booking through the travel agency medium.” Travelport also said consumers will be negatively affected by what it described as “less efficient working practices” that will result from the change.

American Express Global Business Travel reacted by saying that “we do not support any initiative that increases costs to our customers as a result of content fragmentation or inefficient technology.”