Air France-KLM chief blames rivals for GDS fee

Air France-KLM chief blames rivals for GDS fee

Air France-KLM bosses defended the group’s imposition of a GDS booking fee this week while conceding that two-thirds of the airline’s seats are sold through travel agents.

Jean-Marc Janaillac, Air France-KLM chief executive, said the airline was forced to impose a fee to maintain its position against leading rivals.

A failure to impose a fee “would have placed us in an extremely difficult situation compared to the competition”, said Janaillac.

Air France-KLM announced earlier this month that it would impose a GDS-booking charge of €11 per sector from next April, or €22 on the most-simple return fares.

Its move followed the introduction by IAG-owned carriers British Airways and Iberia on November 1 of a €9.50 charge “per fare component” on GDS bookings, or €19 on a return flight.

Lufthansa has imposed a €16 fee on GDS-booked fares with group airlines Swiss, Austrian Airlines and Lufthansa since September 2015.

Speaking at a travel industry event in Lille, Janaillac also said: “We had to terminate contracts with the GDS in order to be able to use the NDC standard.”

This refers to the New Distribution Capability (NDC) technology standard developed by airline association Iata to enable online direct connections to carrier’s booking systems.

The carriers argue this is necessary to facilitate the kind of retailing possible through their own websites.

However, both BA and Lufthansa have conceded existing NDC-standard technology is limited and the GDSs insist their technology can already beat anything the airlines are developing with other technology suppliers.

Janaillac blamed the GDSs for the cost of the booking fee, claiming: “The retaliatory measure of the GDS [to the airline breaking the contract] is to increase very strongly the cost they ask [of] us, which we compensate for by the charge.”

He suggested the leading GDSs – Amadeus, Travelport and Sabre – had enjoyed higher profits than the airlines for years while not investing sufficiently in new distribution technology and said: “The GDS must evolve.

“For five years, the GDSs knew what Iata was preparing. It would have been possible for them to prepare in advance. They preferred to hang on to a profitable situation.”

But, according to French travel trade publication L’Echo Touristique, Janaillac told travel agents: “We understand the difficulties that this may pose.

“The Air France-KLM sales teams will take the necessary steps to ensure the implementation is as smooth as possible and does not penalise [travel] agencies.”

L’Echo Touristique reported Air France president Jean-Pierre Mas had confirmed agencies using GDSs still “distribute two thirds of Air France tickets”.

MoreAir France-KLM confirms GDS fee

BA-Iberia to add GDS fee next week

Travelport chief dismisses BA’s NDC

 

 

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