British Airways plans to restrict the fares it makes available through GDSs to those that “require an intermediary”, Willie Walsh told corporate travel leaders this week.
Walsh, chief executive of BA, Aer Lingus and Iberia owner International Airlines Group, said: “We can’t afford to make all our fares available through the GDS. It’s too expensive. It’s not justifiable. It doesn’t make sense.”
He told the Guild of Travel Management Companies’ (GTMC) conference in Ireland: “We want the cheapest cost of distribution. We’ll provide relevant fares through the GDS. [But] we’re not going to make all fares available. A lot of transactions are simple, point to point and chosen on price. Customers don’t need an intermediary to do it.”
Walsh insisted: “There is a role for the GDS. There are bookings where price is not a concern. There are things the GDS can do that we can’t. We want a relationship, but it can’t be based on a model that was right for the 1990s. It has to be based on a changed industry.”
He added: “Aer Lingus uses the GDS only where it adds value, then they’re happy to pay the [GDS] rack rate. About 80% of Aer Lingus sales go through the direct channel.”
BA and Iberia imposed fees on GDS bookings last November as they seek to drive bookings through ‘new distribution capability’ (NDC) channels.
SPAA president Ken McLeod said: “We have to find a way to integrate these fares outside the GDS. Distribution is going to become more difficult and more complex.”
Amadeus UK general manager Liz Emmott warned: “There will continue to be pain until the [NDC] technology is developed to support the new structure. It will take time.”
At a glance: GDS fees
• Which airlines charge a global distribution system fee? BA, Iberia, €9.50 (£8); Lufthansa, Swiss and Austrian (€16); Air France-KLM (€11)
• Why? Carriers want to cut distribution costs by encouraging agents to book direct or through direct-connect channels in line with Iata’s New Distribution Capability (NDC) strategy.
• Lufthansa Group: Lufthansa, Swiss and Austrian Airlines introduced NDC Best fares as the carriers’ cheapest fares from London, Manchester and Dublin to their respective hub airports in May. These are £28.30 cheaper than fares on the same routes in the GDS. Travel agents can only access the fares by implementing an NDC API with the Lufthansa system, registering with the group’s SPRK platform or booking online.
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