September 2022, Virtual
September 29 2022, Virtual
Now in its 27th year, the Business Travel Awards
The US-based Business Travel Coalition is warning of proposals by American Airlines to move to a system which means more of its selling costs are passed on to the user.
The Coalition said American Airlines was floating the idea of bringing "a wholesale shift of distribution costs to the corporate customer".
BTC added that its members have been approached by the carrier to explore the idea of a relationship known as Direct Connect, which would unravel the current model where airlines fund merchandising and selling activities and replace it with a "user pays" model.
BTC chairman Kevin Mitchell said this meant a more complex and costly system whereby the airline only offered high-value transactions for free. Other transactions would be subject to merchandising charges and sale fees.
"In other words, virtually all merchandising and distribution costs would be shifted to TMCs, and ultimately onto the backs of the airline's best customers," said Mitchell.
The BTC has a petition of more than 100 signatures calling for any scheme to be abandoned.
"In recent years numerous airlines have attempted to shift costs and other distribution burdens to the customer, but a unified supply chain has repeatedly and successfully pushed back by reminding airlines that it is agencies' corporate customers who keep the lights on at airlines," Mitchell said.
Norman Gage, Advantage Travel Centres' business travel director, said the US proposals would not necessarily be repeated in the UK.
"This comes up every now and then when people are looking at cutting GDS costs," he said. "It is easier to implement things over there because the industry is so fragmented. Every state has a different travel agency grouping whereas here, we have national entities. In the UK we also have one major carrier, but in the US it is a bit more of an even platform."
However Gage said that any extra costs would have to be passed on.
"The cost of the ticket includes the cost of distribution. The TMC can't absorb that cost so the corporate will have to."
ABTN has invited American Airlines to comment, but has not received a formal response.