BA/Iberia hail deals to waive GDS fee

BA/Iberia hail deals to waive GDS fee

British Airways and Iberia announced direct connect deals with a leading travel management company (TMC) and two leisure travel agencies this week in advance of imposing a €9.50 charge on GDS bookings from November 1.

IAG-owned BA and Iberia confirmed they had reached a deal with major TMC Hogg Robinson Group (HRG) to utilise New Distribution Capability (NDC) technology.

However, the deal excludes the UK, BA’s home market, Italy and Switzerland.

The agreement means HRG bookings of BA and Iberia across the rest of Europe will not attract the €9.50 GDS fee.

HRG chief operating officer Bill Brindle said: “We predicted big changes in airline distribution and have been engaging with BA and Iberia for some time.

“We are now working on similar arrangements for the UK and other markets.”

However, it is unclear whether the deal will see HRG immediately ready to utilise NDC connections to BA and Iberia content, or whether there are cost savings.

It appears HRG’s willingness “to make the technical connections required for NDC” has been enough for the airlines to waive the GDS fee.

BA and Iberia also announced a deal with the UK-based Lotus Group, which operates brands including DialAFlight and Supertravel.

In a statement, the airlines said the Lotus Group would be “avoiding the Distribution Technology Charge of £8 [€9.50] per fare component for all bookings of BA and Iberia marketed flights from November 1”.

A similar deal was announced between BA, Iberia and the leisure agency group Travel Up, also based in the UK.

Travel Up chief executive Ali Shah also suggested the technology is a work in progress, saying: “We believe investing in NDC will bring benefits to our customers in the near future and the long term.”

BA and Iberia announced the imposition of the GDS fee in May.

The Lufthansa Group has imposed a €16 fee on GDS bookings, a Distribution Cost Charge, since September 2015.

The German group hailed the move as means to cut its distribution costs. However, its 2016 results reveal its GDS distribution costs rose year on year despite revenue from the fee.

Corporate travel leaders suggest competition among carriers means they must remain competitive on fares regardless of levying any GDS fees.

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