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American, Delta and United airlines have created “confusion” in the corporate travel sector with “unannounced and unplanned” changes to domestic fares, travel organisation ACTE has said.
Speaking to BBT ACTE chief executive Greeley Koch said the changes in US fare structures, which alters the way passengers purchase multi-city trips, have been “abruptly” announced with no discussion with the industry.
Last month all three US carriers simultaneously stopped multi-city tickets using the lowest available fare on each segment. Instead, the new changes combine the highest fares available on each segment and return a round-trip single price that is higher than if a consumer purchased separate one-way fares.
To get the best prices, passengers stopping at two or more cities now need to book several individual tickets.
Speaking to BBT, Amex GBT VP of global supplier relations, Jennifer Charlton, said purchasing individual tickets as opposed to multi-city tickets can cause problems. “The challenge with this approach is that travellers who cancel or change one of the legs, as business travellers often do, may incur multiple change fees. There may also be more confusion in rebooking the independent one-ways in the case of a change,” she said.
The airlines have made the changes to compete more with low cost carriers such as Spirit Airlines on certain routes.
Koch said: “Our concern with these types of industry wide changes, that are unannounced and unplanned for, create confusion in the corporate travel marketplace that isn’t really necessary.
“Change works better when all sides have a chance to understand what the other is trying to accomplish, can be integrated into company processes and booking solutions and can be properly communicated to all involved.”
He added that putting your customers on the defensive and forcing a reaction after the announcement creates a “strained relationship”.
Charlton said the airlines' rule change has resulted in “some higher fares for complex, multi-segment trips including open-jaw, circle and multi-leg as one tickets”.
She added that the sudden announcement could “temporarily” damage relationships between the industry and airlines but added that “as long as we all stay focused on our joint mission of providing the best solutions for business travellers in terms of service, safety and cost, we'll be fine”.
Last week the Business Travel Coalition wrote to the US Department of Justice (DoJ) to include the fare change issue in its ongoing investigation into price collusion.
“We have a concern that American Airlines, Delta Air Lines and United Airlines may have recently coordinated on a complicated and comprehensive scheme to change airfare rules that have the effect of driving up the price of an airline ticket on unsuspecting consumers by as much as a factor of seven,” the organisation said in an open letter to the DoJ.
“As your investigators know well, at an International Air Transport Association meeting of airline CEOs in Miami in 2015, U.S. airlines spoke openly about the need for capacity discipline.
“More recently, just last week, all three major U.S. carriers, virtually simultaneously, and without disclosure to consumers, implemented a complex policy... As an example of this new policy, a three-city trip researched this week returned a coach fare of $2,745 for travel from New York to Los Angeles to Albuquerque to Montreal returning to New York.
“If priced as four one-way tickets the fare is $898. While a knowledgeable travel agent will be cognizant of the policy change, the threshold problem is that most consumers, especially the majority who are infrequent travellers, will not be aware and will pay dearly when booking online at an airline website.”
It adds that when a traveller is” forced” to purchase the one-way segments, instead of a round-trip ticket, a modification in travel plans will “trigger change fees of up to $200 per segment”.
“Importantly, business travellers have to pay their travel management companies transaction fees on each segment as the airlines have foisted a new level of complexity and inefficiency upon the industry that must be paid for by the customer.”
The GBTA have also spoken out on this issue calling for more transparency between airlines and the industry. In a statement the organisation said active communication is “necessary and vital”.
“GBTA believes there should be full transparency with regard to any changes before and during the travel experience, including new supplier policies or travel process time and delays.”
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