Corporates and travel management companies (TMCs) face tough negotiations after British Airways announced it is to introduce a new booking fee.
From March 1 the airline is to levy £4.50 on all non-premium bookings made with credit cards through intermediaries.
BA said it would bring “consistency” to its different fare distribution channels, as the fee already exists on BA.com bookings.
A spokeswoman told ABTN the decision to introduce the fee was made because the global distribution systems (GDSs – systems used by many travel agents to book airline tickets) now offered the functionality for the charge to be made transparently.
Tickets in BA’s premium cabins (First, Club World, Club Europe and World Traveller Plus) are exempt from the charge, as are bookings made with a Visa or MasterCard debit card. Though ABTN understands BA had planned to levy the charge on all tickets before reaching a compromise with travel trade bodies.
The TMCs and their corporate travel buyer clients now have the difficult task of deciding who will absorb the extra cost.
Nigel Turner, director of programme management for Carlson Wagonlit Travel in the UK and Ireland, said: "We are concerned about this latest industry development, which is obviously adding further costs to many of our customers’ budgets – particularly following on from the recent increases in APD.
"It will be interesting to see how the rest of the market reacts, and whether customers decide to vote with their feet on this issue if other carriers decide not to follow suit."
Norman Gage, director of business travel at agency consortium Advantage Travel Centres, said: “We knew this was coming. The airline is strapped for cash and needs cash flow. So why should it pay the when it can earn the money?
“But corporates may be reluctant to pay it and might demand their TMCs take it out of the transaction or management fee.
“Whereas the TMCs have already had their margins squeezed so tightly there may be no room to absorb any extra cost.”
Paul Tilstone, chief executive of the Institute of Travel and Meetings (ITM), said his organisation’s industry affairs group was meeting this afternoon to discuss the news.
He said: “This will clearly add another cost to buyers’ programmes. We recognise that there is now parity on distribution channels, but there are all sorts on wider implications.”
Tilstone said ITM would make a full statement in reaction to the new fee at the end of the or on Monday morning.
Anne Godfrey, chief executive of the Guild of Travel Management Companies (GTMC), said BA had alerted her members to the change in its payment structure some time ago and had asked for feedback.
“It is unfortunate that this additional cost will be passed on to business travellers but we are happy that BA listened to our feedback and not applied the fee to premium fares,” she said.
Mike Hare, chief executive of Portman Travel and chairman of the GTMC, said: "BA was very open about its intention to introduce the credit card payment. It was discussed with key individuals within the GTMC.
"We debated whether or not it should apply to all cabin types and in the end they agreed it would not impact premium bookings.
“The most refreshing thing to come out of this is that BA does talk and listen to the trade. We don’t really have an immense interest in what it does within its business, but do like to be consulted on matter that influence our mutual customers.
“BA decision not to implement the charge for another three months was part of that.”
Hare said some corporates make look to take advantage of credit accounts offered by some TMCs, thereby avoiding the levy.
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