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The Guild of Travel Management Companies (GTMC) was today the latest industry body to call for an end to the dispute between American Airlines (AA) and Travelport, the travel technology firm that owns both the Worldspan and Galileo airline ticket booking systems (known as global distribution systems – GDSs).
Anne Godfrey, the GTMC’s chief executive, said her members were “extremely disappointed” by the companies’ inability to reach an agreement about the cost of distributing the airline’s fares through the GDS.
The row, which has angered both TMCs and corporate buyers, moved to the UK last week when AA announced it would introduce a surcharge on all bookings made by non-US and non-Caribbean Travelport users.
The carrier said it was responding to a Travelport decision to increase the amount it charged AA to distribute its air fares to travel agents from December 20. The GDS has not confirmed whether or not this is true.
But ABTN understands that Travelport was responding to a previous AA decision made in the US earlier this month when it told Orbitz, an online travel agency in North America of which Travelport owns 48%, that it had to access its content via its AA Direct Connect technology rather than via the GDS channel. AA claimed the move was necessary to reduce its cost base and would make is easier to charge ancillary services.
Our sources told us the GDS believed AA was in breach of its full-content agreement. Travelport won an injuction against AA on Friday last week, pending a full hearing.
But the GTMC's Godfrey said the potential financial impact on TMCs and business travellers was the last thing the UK needed after the recent introduction of the air passenger duty (APD) stealth tax.
“In recent years the GTMC has worked hard with a number of airlines and distribution systems to ensure that all TMCs have equal access to all content through all channels.
“Our GDS partners, including Travelport, have always responded positively in their efforts to avoid differentiation in the market place.
“The proposed imposition of a surcharge for bookings made on one particular channel in certain markets unavoidably disadvantages some TMCs at a time when business levels are showing signs of recovery.”
Godfrey said the dispute might be seen as an attack on the current distribution model and that it was “unfortunate” that TMCs were being penalised.
She lambasted AA’s intention to collect the surcharge by issuing automated debit memos (ADMs) through the monthly IATA (International Air Transport Association) billing settlement plan (BSP – a system which allows TMCs to pay all IATA-registered airlines at the same time), claiming it was an “inappropriate” use of the document that would create a bureaucratic nightmare.
The Institute of Travel and Meetings – a UK and Ireland-based travel buyer-lead organisation that includes airlines and GDS among its members – said it was concerned that the breakdown between AA and Travelport could alienate the airline’s best customers.
In a statement signed by ITM chairman Jamie Hindhaugh and its chair of industry affairs, Mark Cuschieri, the group said: “We are concerned that the result of the AA/Travelport negotiations will be increased costs to business travel programmes and an undermining of streamlined managed programmes.
“We are also concerned that others in the UK and throughout Europe might follow a direct connect approach, resulting in an unproductive policy of channel discrimination and content fragmentation.
“We believe such a policy would risk alienating the very best customers of airlines', and it is these whom we represent.”
“For our companies, it is imperative that we have all the content, all the time, in our chosen GDS. The industry should be working towards the streamlining of content access, not creating scenarios that result in increased fragmentation and added complexity for the travel buyer across booking tools, data and payment.”
“Fragmentation creates inefficiency, undermines adherence to our members' corporate policies and destroys the credibility of their travel programmes.”
Both Travelport and American Airlines have stately publicly that they want to reach an agreement that suits all parties.
Click here to read a comment on the threat to fare distribution by CWT's Andrew Winterton