Will airline’s desire to widen distribution come at a price, asks Ken McLeod, director of industry affairs at Advantage Travel Partnership and incoming SPAA president
British Airways’ introduction of a surcharge on bookings made through GDSs this month – a move preceded by Lufthansa some time ago and to be followed by Air France-KLM next April – is undoubtedly a watershed for airline distribution.
While the European airlines have a much smaller penetration in the UK, the BA move will have a considerable effect on the wider UK travel trade, especially in the regions.
With the advance in technology, the need to bring down the cost of distribution and ambitions to increase ancillary sales, BA is pushing the boundaries to widen its distribution, but has this move come too soon? The effect of the charge on mid and long-haul fares may be minimal in relation to the fares, but when it comes to domestic and European routes, a £16 return booking fee is disproportionate.
Agreements are currently being concluded by BA with large travel management companies to avoid the charge, with the commercial reality being that many mid-sized and smaller agencies are being left behind. This may correct itself in time, but the current disproportionate charge on price-sensitive domestic and European fares is devastating for agencies in Scotland and the North of England, and to some extent, Northern Ireland.
While BA may have found itself with a challenge on its hands and created a very messy transition for itself and others, the GDSs have not covered themselves in glory either. They are unable to adequately satisfy their customers and travel agencies are stuck in the middle of the dispute with claims and counter claims from various parties.
Some conclusions can be drawn from BA chief executive Alex Cruz who gave a speech at World Travel Market in which he outlined the plans for the airline.
Concentrating on the great food being served and new cotton sheets in business class allowed him to avoid the more pressing issues. Not once during his 20-minute speech did he mention the travel trade until he was asked by a member of the audience. He then had little choice but to suggest it was fully supportive of this part of the distribution chain. Supportive they may be, but some travel agencies seem more equal than others. Nobody was ready either technically or commercially for the change to take place, and the scramble is on for everyone to try and understand where they sit in this new world.
BA’s introduction last week of its boarding policy will be another example of trying to change the standards by implementing a policy when not entirely ready. It will take some time to bed down. The process of boarding flights is a challenge for any airline, and this idea is used by a number of airlines.
The challenge is to appease BA Silver and Bronze Executive card-holders who will get less than they did, and those at the back who tend to have considerable cabin baggage. At least those already on board can relax in a seat to watch the chaos around them, as bags are shuffled off to the hold. Maybe that is entertainment worth paying for!
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