We have some interesting analysis to add to last week’s story about British Airways supposedly intending to slap a distribution tax onto all bookings made through the GDSs.
Senior industry sources tell us that BA is playing a clever – and they would consider, dirty – game.
Unlike the recent airline/GDS negotiations in the US, BA is apparently NOT threatening to pull out of the GDSs if agreement is not reached on distribution fees. That leaves the GDSs without the option of saying “go ahead, if you dare…”.
Instead, our mole suggests, BA is demanding “unfeasibly large cuts” in their GDS booking fees and, if they don’t get these, threatening simply to add the full GDS booking fee to any bookings made through this channel – which would make GDSs the most expensive way to book BA.
And – in fairly short order, you can bet – any other airline.
So what does this mean? Apparently corporations and travel management companies are up in arms. They claim that their bookings (made through the GDSs) deliver BA’s highest yields.
BA is now slapping them with the distribution cost for these yields, our free talking source tells us.
“This is a tax – a huge transfer of wealth from the travelling Joe Public and corporate Britain directly into the BA coffers,” another source complains, adding:
“It’s like being told by Colgate-Palmolive that I must pay more for their toothpaste in a supermarket than anywhere else, because of the cost of getting it there. This is not the way the real world works.Finally our source reckons BA is putting all GDSs in a position where a significant ‘opt-in’ charge for access to BA’s full range of fares is inevitable.
“BA has to stop trampling over the people who make its business work – be they cabin crew members, corporate customers or travel agencies.”
The GDSs have two options: stick to their guns and risk a situation where travel agencies become the most expensive place to buy BA tickets – and even then there is no guarantee that BA will give them its full range of fares; or stiffen the existing UK opt-in model and ask travel agencies to shoulder an even greater proportion of BA’s distribution costs.
“Either way it sucks – for everyone except BA,” laments our snout. “TMCs and the airline’s corporate customers need to tell BA that enough is enough.”
Kevin May, editor, Travolution