U.K. Agents: Debit Memo Strategy Gives AA a Black Eye

Travel agents in the U.K. this week got a temporary reprieve from paying debit memos to American Airlines for Travelport bookings. The issue is still in play, pending “processing work” by the carrier and a decision by IATA on whether the move violates existing rules.

Whatever the outcome, agents in the U.K. said the carrier’s actions have given it a black eye.

“There is definitely bad feeling toward American for their current attitudes and ideas,” said Peter Ruck, general manager of Baldwins Travel & Cruise in Kent. “Perhaps they’ll rethink their whole strategy.”

The carrier in November imposed a surcharge of $7.25 (£4.52) for Worldspan segments and $10 (£6.24) for Galileo segments, after Travelport increased American’s fees for bookings made outside the U.S.

The moves were part of the American-Travelport-Orbitz dispute over the airline’s direct-connect strategy.

When it originally announced the surcharges, American said it would recover the surcharge by issuing agents automated debit memos (ADMs) beginning this month for the Dec. 20-31 period. In response, agency groups said using automated debit memos for such a purpose would violate IATA’s rules.

A spokesman said the carrier is “still doing processing work for issuing the debit memos, and at this point we do not anticipate that memos will be sent out this month. We will be in a better position to more accurately estimate when debit memos will begin to go out in a few weeks.”

Tarnished reputation
While that gives U.K. agents more time to clarify their position – IATA has yet to speak out on the topic – and gives American and Travelport more time to work out their differences, U.K. agents say American has given itself a black eye.

“If what they’re doing is not legally wrong, it’s morally wrong,” said Ken McNab, managing director of The Travel Company in Edinburgh.  

McNab, who is president of ASTA’s U.K. chapter, said American should “come to the table” to discuss the issue with agents. “They are acting like it’s their game and their ball,” he said. “But it’s our game.”

He said it was unfortunate that American was making it difficult for its cheapest distribution channel to book its flights.

McNab noted that there are many options for flying between the U.K. and the U.S., but the real fear is that British Airways will adopt the tactics of its alliance partner.